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The program is put in an extremely strange and non-helpful governmental place for the excitement of global financial investment in the United States. We are giving away too much for too small of an investment.


The regional facilities, with their half-million schemes, basically undercut the more reasonable million-dollar part of the EB-5 program. Third, such programs, if we have them whatsoever, as they carry out in Australia, ought to have to do with developing company entities, not easy investments. It must be regarding developing genuine work, not clarify calculations regarding the indirect creation of work, which is now component of the legislation.


Probably that is among the reasons that it has stopped working every year to get to the legal objective of 10,000 financial investment visas. Fifth, the Regional Facility Program is inherently awkward, and the program is too full of intermediaries, both public and personal. The program has even more than its share of scandals, which I will get involved in later if any person is interested.


This is an agency that likes to claim yes to applicants, yet as the table in my statement reveals, USCIS policemans have a lot more problem with EB-5 applications than others. I believe that is something that nobody has actually really spoken about a lot. EB5 Regional Center Program. There are high rates of internal denials in this program and permanently reason

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Seventh, in this program visas most likely to individuals that can not obtain them differently and to people whose organized financial investment is in fact much less, according to the Federal Get, than the average mean total assets of all American family members in 2007. Allow me broaden on among my observations.


My estimate based upon the investors' permit applications submitted 2 years after the initial financial investment-- these are the strong ones that continue to be and are accepted. This is 2009-- was that they had regarding $191 million validated-- that is my estimate. USCIS does not supply the sort of information that we can use on this.


So for every $100 of increased foreign investment that year, the EB program added one cent. Under a much extra shaky analytical base, the initial applications of prospective immigrant financiers, USCIS is informing journalists that the degree of financial investment in the just-concluded year was about $1.2 billion. Let us approve that.

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Thank you for listening to me. I anticipate your remarks and questions. [The prepared statement of David North looks like a submission for the document.] Chairman Leahy. Thank you. Our next witness is Robert Divine. He is a shareholder of Baker, Donelson, Bearman, Caldwell, and Berkowitz. He is the head of the firm's immigration practice group.




Divine acted as Chief Guidance of the USA Citizenship and Immigration Providers from July 2004 up until November 2006, the year in which he was Acting Supervisor, and after that Performing Replacement Director. He has actually worked thoroughly with the EB-5 program secretive method. He was elected, as I recognize, vice president of the Association to Purchase U.S.A., the nationwide market organization of local centers.


STATEMENT OF ROBERT C. DIVINE, LAWYER, BAKER, DONELSON, BEARMAN, CALDWELL, AND BERKOWITZ, P.C., CHATTANOOGA, TENNESSEE, AND VICE HEAD OF STATE, INVEST IN THE U.S.A. (IIUSA) Mr. Divine. Thank you, Mr. Chairman, Senator Grassley, and others.


At the majority of, if all 10,000 slots were used, it would certainly be 1 percent of the immigration each year to the USA. It is not near that yet, but it is growing and getting toward that. Specifically as USCIS, the agency that oversees the program, has actually been making the guidelines more clear and the procedures extra rational and clear for the people who are organizing investments and for the financiers that are spending, more people have wanted and able to put effort and money right into the procedure to find good jobs and create them, here and afterwards much more capitalists have been eager to spend their money and take the risk and utilize the cash to create the tasks that is the factor of the program.

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These tasks do not linger for life, and USCIS recognizes that and are attempting to speed up the program, speed the procedure - EB5 Regional Center Program. That does not indicate that they are relaxing their examination, and, as a matter of fact, they are prepared to reject applications that are not qualifying. And they do so, as was mentioned


The local center component of the program is not. It is part of an appropriations expense that was established in 1992, and considering that then that program has been prolonged 5 times for 19 years. It is time for it to be permanent, and it needs to be done currently and not nearer to the day of expiration in September.


The procedure takes a good while to develop a project and after that to obtain the investors authorized. And they do not desire their money streaming via until they have been accepted. And the specter of the expiry of this Regional Center Program in September is already inhibiting the advancement of tasks.

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I want to clarify that the Regional Center Program is not the exact same as the half-million-dollar point. The concept of half a million or a million is a function of the routine EB-5 legislation that belongs to the code. It just is a truth that most of the regional centers that are pooling financial investments have set those in locations of high unemployment or in rural areas where half- million-dollar investments are allowed, and that makes good sense.