On February 4, 2014, the Brookings Institute, a Washington think-tank, released a report recommending supervisory oversight of the adjudication of regional center applications by the Commerce Department. This study supports the December findings of Homeland Security’s Inspector General that the EB-5 program exceeds the USCIS mission and should use the business expertise of other governmental agencies to strengthen its adjudication process.

The Brookings proposal would give the lead to the Commerce Department to vet business plans and evaluate the economic impact and job creation of proposed regional centers. While supporting the EB-5 program as a source of regional economic development, Brookings professes concern for investors who face a “complicated network of intermediaries with little regulatory oversight” and who have little or no control over the regional center’s compliance.

Brookings recommends:

• Designate an oversight role for the Commerce Department to supervise the adjudication of regional centers, standardize data and methodology, and better monitor program impact.
• Create incentives for partnerships between regional centers and local economic development agencies (EDAs).
• Generate high quality, multi-variable public date on regional centers.

The EB-5 community is divided over a possible role for Commerce. Some want to stick with the USCIS, preferring the “devil we know to the one we don’t.” They argue that scrutiny by another agency will delay processing times which are already too long. Experiences with multiagency jurisdiction, such as immigration though labor certification which adds the Department of Labor to the mix, prove that delay can be protracted, and rules, policies and practices inconsistent.

Others support a complete move, suggesting that Commerce has a more realistic understanding of and comfort with evaluating business practices and economic impacts. Commerce also might issue regulations giving guidance that doesn’t exist from USCIS, and is unlikely to in the future. This could be a welcome change from the USCIS’s failure to clarify requirements by regulation and its sudden shifts in policy without notice, which is seriously detrimental to setting up compliant regional centers.

Past legislative proposals have provided for either consultation with or direct involvement by Commerce.

USCIS

As I have previously reported, the USCIS is moving its EB-5 unit from the California Service Center to Washington, DC. The USCIS is also transferring EB-5 from its SCOPS unit to its field ops division. The deputy director of the field ops is Dan Reneau, an excellent and experienced immigration official.

Direct Investor Cases

There are increasing reports that USCIS is asking for the source of all project investors’ funds, including funds from American citizen non-EB-5 investors.