Senate Judiciary Committee hearing on EB-5
June 19, 2018 13 Comments
The Senate website now has video of of today’s Judiciary Committee hearing on EB-5, as well as a statement from Senator Grassley and written testimony from USCIS Director L. Francis Cissna. I’ve uploaded my recording, and transcribed below the major news from the hearing: that EB-5 regulations are not actually close to being finalized, and the reason is not conspiracy but honest ineptitude. Hanlon’s Razor proves right again. I should’ve known better than to repeat rumors attributing delays to interference. It’s so plausible that, as Cissna says, CIS would be still reviewing public comments, slowed by a complex process and competing demands.
I listened to the hearing for hints that anyone plans to do anything about EB-5, and noted few such hints. The Democrats on the committee sent the message that they care about immigration law/policy that hurts children, and can’t be bothered about immigrant investment right now. Most did not even mention EB-5 in their statements or questions, instead changing the subject to undocumented migrants, and the administration’s zero tolerance policy and resulting family separations. Two senators (Feinstein and Durban) called for a kind of action — termination — but didn’t actually talk about EB-5. They discussed a mythical program that allows people to “buy their way to the front of the line” and purchase legal status as a commodity, apparently simply ignorant of basic facts: that EB-5 investors enter the back of a long waiting line with no premium processing option and must put capital at risk but can only acquire status based on job creation, not money. Senator Cornyn was the one person who spoke as if he might still have EB-5 legislation in mind. Senator Grassley granted the necessity of legislation, but complained about how he’d been stymied in the past and focused on calling for regulations (which “can probably do better than legislation”), attacking Director Cissna for not having finalized regs yet. Grassley definitely seemed to be trying to pass the buck on EB-5 program changes from Congress to USCIS. Cissna, meanwhile, tried to pass the buck back, telling the committee that he doubted his department could finalize regs before September 30, and urging Congress to either manage legislative reforms or let the program expire. Meanwhile, it wasn’t clear that anyone present really grasped what’s in the EB-5 modernization regulations, or how the regulations or the last legislative proposal would affect the real world of EB-5. I appreciate that at least Grassley and Cissna tried to do their homework, but clearly still operating with some basic misconceptions that won’t help yield good law or policy. Sigh. So much education remains to be done in EB-5. If our lawmakers and regulators do not know what’s mostly right or what’s actually wrong with EB-5, how can they direct it effectively?
On the positive side, Director Cissna’s testimony clarifies that EB-5 does not operate the way it did 25 years ago. The department has made major strides in its efforts to administer the program, particularly in the past couple years. Mr. Cissna reviews operational enhancements that have been implemented, even without reform legislation or regulations.
Transcript of a Q&A between Chairman Grassley and Director Cissna (starting at minute 47:30 of the Judiciary Committee hearing)
Grassley: In your written testimony, you say that the department is still, still, reviewing comments, but you plan to move forward as expeditiously as possible. Those last four words are yours. Do you have a sense of when the EB-5 Modernization regulations will be finalized, and how quick is “as expeditiously as possible.”
Cissna: It’s not soon enough. I want those regs out as quick as humanly possible. And from the moment I got sworn in back in October, I have been pushing and pushing and pushing for those regs to be completed. There is a process that all regs have to go through, often very lengthy, and I’ve been doing everything I can, from where I sit, since October to ensure those regs get out very fast.
Grassley: Are you getting the help of the Secretary?
Cissna: Yes. The Secretary is aware of the urgency of this and she is committed to getting the regs– ….
Grassley: Do you anticipate the Modernization regulations being finalized before the expiration of the Regional Center program September 30?
Cissna: I don’t know. That would be hard to pull off. I think it might be tight.
Grassley: More time, hmm?
Cissna: I think so.
Grassley: Have you or Secretary Nielsen received political pressure from anyone to delay or halt the Modernization regulations?
Cissna: No. That I can say with certainty. No one’s been pushing us or telling us to drag our feet or delay this reg in any way.
Grassley: If anyone ever does that, will you tell this Committee?
Cissna: Oh yeah.
Grassley: If the Modernization regulation is not finalized before the expiration of the Regional Center program, do you support letting the program expire?
Cissna: I believe that if the program is not fixed in a way that addresses all these problems that we’re going to talk about today then yes, I think that it should expire.
EB-5 Updates 
How is that Senate Judiciary Commitee hearing on EB5 after such a long time did not care about the inordinate delays in processing I-526 and I-829 petitions by USCIS? It’s time we all should address this before the comprehensive legislation is taken up next week by sending mails to respective Senators/Congressman.Please draft some templates ASAP else we lose the advantage of drawing attention on EB5.
I already donate a lot of labor to the EB-5 community in collecting and publishing information, and can’t spend my nights and weekends doing free advocacy work as well. But I do think investors would be wise to organize themselves for advocacy efforts, and encourage you to take action. But as my previous post shows, shorter processing times would help some but not all EB-5 applicants.
Thanks Suzanne for your well appreciated credible information on EB5 through this blog for all of us.Please share your contact details.I can come forward for contributing.All we need is a properly vetted template of representation to USCIS/Senators/Congressmen.Any take from other Investors in this forum ?
Here’s an example of the kind of action that’s being taken: https://iiusa.org/blog/wp-content/uploads/2018/06/IIUSA-ltr-to-USCIS-re-major-problems_June-2018.pdf
Change in processing times needs to come from USCIS (improving efficiency and reducing complications) and/or industry (improving petition quality and/or reducing demand). Congress couldn’t do much to reduce processing times except to give USCIS more resources — but I don’t think resources are the problem, since IPO has already increased form fees and is already approved for more staff than it has hired. We hope for change at USCIS, but USCIS can’t be lobbied the way Congress can. One letter from IIUSA can be good, but many letters from stakeholders would just be another thing to slow the agency. So it’s hard to know what to do.
So the immigration legislation appears to be thoroughly dead.
What is going to happen with EB5 in September? If the RC program is not reauthorized as is hinted here then we’ll be in a deep trouble.
Similar “no reform, no reauthorization” threats have been made before previous deadlines, and yet the RC program was reauthorized then. So I guess that in September we’ll see another short-term extension. I don’t see Congress managing the coordination and attention that would be required to do otherwise, at that time, and the RC program does benefit many constituencies. So far as I know, the players in Congress for and against the RC program are no different now then they were over the past couple years of extensions. But we’ll see. Another short-term extension in September would be the 13th short-term extension in a row, which looks like more than borrowed time.
I know threats have been made before, but it seems much more serious this time. Even the USCIS Director said it should be terminated in September if changes are not made (which are unlikely now)
Out of interest, does anybody know what happens to I829 cases filed over a year ago. Will they only be able to count ‘Direct employment’ if it terminated?
Here is USCIS policy if an investor’s regional center sponsor is terminated after CPR:
Policy Manual 6 USCIS-PM G Chapter 5(C): Further, with respect to the impact of regional center termination, an immigrant investor’s conditional permanent resident status, if already obtained, is not automatically terminated if he or she has invested in a new commercial enterprise associated with a regional center that USCIS terminates. The conditional permanent resident investor will continue to have the opportunity to demonstrate compliance with EB-5 program requirements, including through reliance on indirect job creation.
I assume the same policy would apply were the regional center program as a whole terminated.
Thank you. I hope that’s the case as that is fair!
If one invests the required amount and applies for I-526 now, and the RC program is terminated in September, would the I-526 petition still be processed? On a similar note, if the RC program is terminated after one receives I-526 approval but has not yet adjusted their status, would the approved I-526 still be honored?
Current policy says that loss of regional center sponsorship is a material change, and material change is not allowed until the conditional permanent residence period. So in your scenarios, the petition could not continue through the process — if we take the policy literally and at face value. An attorney might think of a successful argument otherwise, however.
Thank you for the reply Suzanne. How about extension of conditional green card status if the RC program is discontinued? Would those who have a conditional green card be able to extend it while they wait for adjudication if I-829? By when would we know if the RC program is being extended? Early September or not until the end of September?