The American dream, for sale - Page 2

Thousands of hard-working immigrants are getting deported every month. But unregulated private companies are offering a deal: for $500,000, you can get a green card.

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Regional centers make the process easier for investors; they also pool investment to generate the capital necessary for big projects.

Each investor must create or preserve at least 10 full-time sustainable jobs within two years to stay in the country permanently.

Exact numbers aren't available, but government data shows that the vast majority of investors opt for the $500,000 plan — and few invest on their own. Luz Irazabal, spokesperson for United States Citizenship and Immigration Services, the agency overseeing EB-5, estimates that 80 percent to 90 percent of visas are granted through the regional centers.

So in practice, the program allows private, unregulated brokers to take the money of wealthy people and invest it in projects that are supposed to create jobs in low-income areas. It's not necessarily a bad idea, and there's nothing wrong with opening the most possible paths to legal residency.

But it doesn't always work out — for the immigrants or the community.

WIN-WIN-WIN-WIN?

The EB-5 program is booming. Only 11 regional centers existed in 2007. Today 133 businesses are designated as regional centers allowed to offer EB-5 visas to foreigners in exchange for their cash and 180 applications for the status are pending.

And while EB-5 started out slowly (only a few hundred green cards were issued in the first few years) and still isn't a huge factor in immigration (1,886 permits were issued last year), most observers agree it's on the rise.

"As domestic money has gotten tighter, project developers have discovered the EB-5 program as a possible way to obtain foreign capital," said Stephen Yale-Loehr, a professor at Cornell University Law School, veteran immigration lawyer, and self-described "guru" of EB-5."

Some are dubious. Henry Liebman, the Seattle-based CEO of one of the oldest and most successful regional centers, told us that "most of these [new] regional centers aren't going to raise a nickel." He added that EB-5 is "not going to be the panacea that's going to lift us out of the great depression."

And it's something of a Wild West. The federal agency that runs the program doesn't regulate the regional centers once they're approved for business. And even though the centers make loans and invest money, the Securities and Exchange Commission doesn't monitor them. Indeed, there's no real regulation at all.

Yale-Loehr says the program helps everyone. "Project developers can win because they can get access to capital for their projects. U.S. workers win because the EB-5 money will create jobs. U.S. taxpayers win because EB-5 money stimulates the economy and creates jobs at no expense to taxpayers. And foreign investors win because they get a green card through their investments."

Not exactly. A Dec. 22, 2010 Reuters news service report notes that "thousands of immigrants have been burned by misrepresentations that EB-5 promoters make about the program, inside and outside the United States. Many have lost not only their money, but their chance at winning U.S. citizenship."

In fact, the news service found that in 2009 "four Koreans who invested in a South Dakota dairy farm through EB-5 lost their entire investment when the price of milk collapsed and the operators of the farm stopped paying the mortgage. When the four, who had invested a total of $2 million in the dairy, tried to step in and save the venture, they discovered their partner had left their names off the title. When they tried to sue in state court, the case went nowhere."

If a project falls apart and no jobs are created, the immigrants face deportation.

And there's little guarantee that the projects these investors fund actually create any jobs for the communities where they're located.

Regional centers have plenty of ways to win.

Comments

This ("rich peoples green card") has been around for a long time. It used to be that you had to invest $1M to qualify; but that has been reduced to $500K for "distressed areas". Why shouldn't the rich get a Groupon deal on immigration? Don't you know that the rich run the world, and we just play, I mean, slave, in it?

Posted by Guest on Mar. 02, 2011 @ 7:57 am

Every nation has a program like this. In some countries, just five or ten thousand dollars will get you citizenship, and even with any name you want!

I can't believe that any so-called professional journalist isn't aware these types of inducements aren't ubiquitous.

Posted by Wally on Mar. 02, 2011 @ 8:20 am

It's been around a while, but now it's really starting to boom, esp in the Bay Area -- and it's ironic, is it not, that this happens at a time when the US is deportng record numbers of people who also contribute -- and quite possibly contribute more -- to the economy?

Posted by tim on Mar. 02, 2011 @ 1:52 pm

You mean maybe we want immigrants who contribute more to the economy?

It's always been that way. H visa's and Green Cards have always been issued to those with favored and specialized skills that are needed here. Of course. Again, every nation does that.

Only the SFBG would prefer minimum wage illegals to successful professionals.

Posted by Wally on Mar. 02, 2011 @ 5:41 pm

H1-B visas are intended to drive down tech wages and have done so very well while making it more difficult for American techs to compete for work against those whose alternative is returning to subcontinental poverty.

http://www.cs.ucdavis.edu/~matloff/h1b.html

Lowering wages are not how we get to a progressive society.

-marc

Posted by marcos on Mar. 02, 2011 @ 5:57 pm

they are already too high by standards of international competitiveness.

If American workers are paid too much, and it seems they are, then that differential will be arbitraged away either by:

1) Inbound immigration
2) Outsourcing
3) Devaluation of the US dollar

Most likely, all three at the same time, until we reach parity.

The invisible hand trumps social engineering every time.

Posted by Wally on Mar. 02, 2011 @ 6:28 pm

Government protectionism is the traditional way that a popular government puts its citizens first. Everything else is just speculative theory that has run the economy off the cliff in a way that makes the 1970s look like the 1950's.

Please, you all need to put this before the voters under the banner "Sweatshop jobs for all!"

-marc

Posted by marcos on Mar. 03, 2011 @ 3:22 pm
So?

As noted this is:

A. Not new
B. Hardly unique to the US

Immigration shouldn't be "first come first served." It should be based on a lot of different factors including possessing a desirable skill set and education. And yes, the ability to sustain oneself and invest in needed areas of the US economy should also be a factor in certain cases.

And FYI: having $500,000 to invest may be the product of a lifetime of work for someone. It doesn't make them "rich."

Posted by Lucretia Snapples on Mar. 02, 2011 @ 2:04 pm

I spent a couple of years debating the immigration issue on various blogs. One thing that has always troubled me greatly is that this issue tends to bring out the very worst in people, particularly those who think nothing of dehumanizing entire groups of people based on a faulty perception of the perceived race or class of the "alien other".

We don't like to admit it, but this perception of race and class generally goes hand in hand in, since the darker and poorer you are, the less likely you are to fall into the "good immigrant" category.

Maegan "La Mala" Ortiz does a brilliant job of illustrating this meme in her blog Vivir Latina. The narrative goes like this~

“Good” immigrants, according to the politicos and the mainstream media that parrots them, are the ones who follow the laws, and when they don’t face the consequences, in the form of raids, separation from families, deportation, incarceration and fear. “Good” immigrants work hard and don’t make too much noise. They don’t have more children then they can afford and they don’t live on welfare. They speak English and study hard and get good grades and try to go to college. Within this context there are bills. Bills so that “good” immigrants and their children can go to college and pay in-state rates (like the DREAM Act)."

"But in order to have good you must have bad and it’s too easy for any person once deemed good to fall into the other category. The “bad” immigrants, like the ones portrayed in the ad above, test the compassion of people. They look like gang bangers and obviously cannot assimilate or fit in. The obviously “bad” ones commit horrible crimes only against “white” like rape and murder (because whites apparently don’t do things like that). More minor crimes aren’t placed in context like say poverty, racism or global policies."

Please read that last sentence again because it is key.

Posted by Lisa Pelletier on Mar. 02, 2011 @ 6:52 pm

The far right, and the far left, both of whom make everything about race, to the point of tedium.

I always love your quoting fellow sour leftists.

I enjoy looking them up and reading the conspiracies theories and bitter complaints.

Posted by meatlock on Mar. 02, 2011 @ 7:30 pm

Anybody who is basically literate and doesn't have a recent criminal record should be able to contribute to this country; let them in.

If they have $500K of real money to show, by all means roll out a (slightly tattered) red carpet. Our gain, their country's loss.

Posted by Letmypeoplefree on Mar. 03, 2011 @ 8:42 am

THEY'VE GOT MONEY. WHAT'S THE BIG DEAL? JUST MORE POLITICALLY CORRECT SLOP FROM SAN FRANCISCO AND ITS FOLLOWING APART ECONOMY....

Posted by Guest Michael on Mar. 03, 2011 @ 9:24 am

Chinese investors beware. Example: Tom Henderson was a fish salesman for 30 years with no experience in job creation. He's running around town with his 'quirky' persona (read: he seems to piss off everyone he meets) making lots of promises and looking to get rich off your money. But bottom line: he has no experience at this sort of thing. What companies has he started in Oakland? How many jobs has he created? What boards or councils has he served on that show this has been his focus and community interest?

Best to go with an attorney or agency that has a long history and credibility in creating jobs.

Posted by Guest Sarah on Mar. 05, 2011 @ 10:09 am

Hey Sarah,
This is Tom "Quirky Charisma" Henderson. In the future please use a pseudonym (ie., Fake Name). Your boyfriend Eric (My EB-5 Regional Center Competitor) needs to step up himself instead of hiding behind your comments. I understand Eric's jealousy not being interviewed for this article, but not my call.
FYI... I sold "my" $50M Seafood International Import Export company in 1993 where I had 300 employees working full time in Northern Calif for 20 years. You guys need to be more creative with the cheap shots.
The Bay Guardian did a nice job with an edge to the story. Some accurate and some questionable. But that is their job...
We will create 1000 high paying jobs in Oakland every year for a number of years as long as this EB-5 program continues to provide the job opportunites and investments into Oakland with an actual unemployment rate of over 20%. The City of Oakland Economic Development staff support our efforts.
Good luck to you and Eric.
Best Regards,
Tom Henderson

Posted by Guest Tom Henderson on Mar. 14, 2011 @ 10:04 pm

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