Fast-Tracked Checks of Foreign Investors May Put U.S. at Risk; Light Shined on McAuliffe Case
Byline: Jeffrey Anderson and Shaun Waterman, The Washington Times
A Department of Homeland Security whistleblower says one of its agencies is skimping on background checks of U.S. companies seeking to participate in a program that gives green cards to high-dollar foreign investors - potentially compromising national security.
The federal EB-5 visa program came under scrutiny this summer after reports that the head of Homeland Security's U.S. Citizenship and Immigration Services agency personally intervened to expedite applications from a company affiliated with Virginia Democratic gubernatorial nominee Terry McAuliffe.
But the whistleblower's complaints provide insight into how U.S. corporations - such as Mr. McAuliffe's underperforming electric car company that is heavily reliant on foreign investment - can win approval despite shaky business models and limited chances of success.
The whistleblower, an analyst with the citizenship services agency, said he tracked more than 30 applications from U.S. companies seeking to participate in the program and calculated an average approval time of 4.3 days per case for reviews that ideally should take weeks, if not months.
I'm trained to study financial corruption and corruption networks, he said. There were a huge number of files, and many factors to consider. Is there a semblance of an idea? Do they know their operating margins? Do they have a plan for revenue growth? What about a marketing plan? It never dawned on the Department of Homeland Security that they needed any of this.
The analyst, who also has conducted internal audits for several other Cabinet-level federal agencies and Fortune 500 companies, was hired in March 2012. The Washington Times is withholding his name because he fears that publicly coming out as a whistleblower might harm his employment prospects.
He laid out his concerns in a complaint to the Department of Homeland Security inspector general in May 2012, warning of the dangers of EB-5 approval for investors who have not been vetted.
The current mindset of pushing cases with little regard for anything other than production timelines has made it into a national security threat, he wrote. A 24-48 hour production time ensures a lack of due diligence and oversight.
The analyst resigned a month later.
A spokesman for U.S. Citizenship and Immigration Services declined to comment on specific cases but said the agency made a concerted effort to strengthen national security and our antifraud programs across all its visa programs by establishing a Fraud and National Security Directorate.
The agency takes seriously the responsibility to safeguard the integrity of America's immigration system, said the spokesman, Christopher S. Bentley
Officials say the EB-5 program, created by Congress in 1990, is designed to attract investors willing to risk capital in ventures that will create at least 10 jobs in the United States. Would-be entrepreneurs who invest at least $500,000 in a new U.S. business can apply.
The citizenship services agency says the goal of the program is to stimulate the U.S. economy through job creation and capital investment by foreign investors.
Almost all foreign investments in the EB-5 program are channeled through special companies called regional centers. Once their business plan is approved by immigration officials, the companies bundle investments into qualifying new businesses. Investors then can apply for an EB-5 visa, and, if approved, can claim a conditional green card immediately upon entry to the United States. After two years, the conditions are removed if the investment has created the jobs or looks likely to.
More than three-quarters of all the 7,641 EB-5 visas issued in fiscal 2012 went to Chinese investors and their immediate families, according to government figures. …