USCIS Verbal Magic: "Immigrant Investors" Become "Alien Entrepreneurs"

By David North on June 5, 2012

For years USCIS has been using the term "immigrant investor" to describe the EB-5 program, which gives green cards to otherwise inadmissible alien families for making short-term, half-million-dollar investments in the United States, a subject covered in a recent CIS Backgrounder.

In late April, however, the agency decided to use the term "alien entrepreneur" instead, and Immigration Daily printed the USCIS document in question.

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The agency's rationale is obvious: entrepreneurs are generally more highly regarded than passive investors because entrepreneurs start companies and create jobs; passive investors create profits for themselves and little else.

The problem, however, is that the overwhelming majority of these EB-5 investments are not entrepreneurial in nature; they are checks for $500,000 written to buy into condos, existing real estate developments, or in one notable instance, a reviving ski resort. There are virtually no new companies started by these investors. In many cases, the aliens have never even visited the projects in which they invested, and have no plans to do so.

I remember, for instance, a conversation I had two months ago with a well-to-do young man from China who got his green card by investing in a condo in New York City. Having once worked there, I asked him: "which borough?" His reply was vague; he thought it was not Manhattan.

Putting honesty in labeling to one side, I wonder about the skills of the USCIS wordsmiths. Why take a term that has two neutral (and accurate) words in it, "immigrant investor" and convert it to "alien entrepreneur", which starts with a more or less negative word, "alien", and then moves to a positive one? Why do that when "immigrant entrepreneur" was obviously available? That would be a combination of a neutral term and a positive one.

Further, in two of three table headings in the cited USCIS document the spelling is "entreneur" and in one it is "entrepreneur". Immigration Daily, with a nice touch of impartiality, published both spellings.

USCIS, however, loves the concept of "entrepreneur"; late last year, it announced the creation of an "Entrepreneurs in Residence" program to help tilt agency decision-making in favor of those seeking to use the EB-5 program. Various businesspeople, still on the payroll of their firms, were invited into the USCIS decision-making process, particularly in connection with the licenses of EB-5 regional centers, the middlemen between the users of the capital and the immigrant investors. (Presumably these corporate newcomers will not sit in judgment of their own firms' applications, just those of like-minded folk.)

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Interestingly, the same USCIS announcement that first used the terminology just described also showed what has happened recently with applications to open new EB-5 regional centers in a little table. In the first quarter of FY 2012, the agency made 36 decisions on forms I-924 to create new centers and 22 (61 percent) were denials. In the second quarter, the staff made 17 decisions, nine of which (53 percent) were denials.

Bear in mind that this is an agency that loves to say "yes", and does so 90 to 99 percent of the time, depending on which database you consult. A class of applications in which most cases are denied — such as those for EB-5 regional centers — would seem to be seriously flawed.

These centers are usually private, for-profit entities, seeking to secure commissions and fees from those involved in the EB-5 program. They make determinations, usually favorable, whether projects are in "depressed areas". Without such a decision the minimum investment required is one million dollars, but these are rarely seen in the EB-5 program.

The financial management of several of the existing regional centers has provoked controversy, and at least once was closed down by USCIS as I noted in an earlier blog.

Critics of USCIS say that the agency leadership is engaged in a battle with the career staff to get the staff to make more positive decisions about the various EB-5 applications presented to it, but the I-924 decision data just released suggest that the staff is sticking to its guns.