Legislative Update: 2/26/2014
Feds Ignore Investor Visa Abuses
According to a recent report in the Washington Times, abuses in the EB-5 visa program (the so-called “investor visa” program) have been even more pervasive than initially thought. (The Washington Times, Feb. 18, 2014) The news outlet claims it obtained internal government documents showing widespread fraud and corruption in the program that dates back from its inception more than 20 years ago. (Id)
Specifically, the documents reveal officials repeatedly ignored requests from agency personnel who sought investigations into several perceived instances of abuse. For example, in a March 2002 Immigration and Naturalization Service memo (the Department of Homeland Security’s predecessor), Senior Special Agent Elizabeth M. Goyer said that most EB-5 visas only went to a handful of private companies, most of them run by or closely associated with former agency officials. (Id.) According to the memo, “At least two of these companies were owned and operated by convicted felons who engaged such former officials to promote their fraudulent EB-5 schemes.” (Id.)
To fix the problem, Goyer requested that a task force be formed to investigate the program. However, two years later, an investigation had yet to take place. A subsequent memo written in 2004 reads, “Two years ago, the INS proposed an investigative initiative targeting six of the largest EB-5 promoters…Efforts to implement the plan were hampered by a lack of resources, by competing priorities, by the complexity and scope of these schemes, and by the continuous efforts by the EB-5 promoters and others to force the former INS (and then [DHS]) to abandon attempts to restore integrity to the program.” (Id.) Though this subsequent memo called for another investigation, it is not clear whether one has ever taken place.
These memos underscore findings from a December 2013 DHS Inspector General report on the EB-5 program. According to that report, several conditions inhibit U.S. Citizenship and Immigration Services’ (the agency that acquired the EB-5 program after INS dissolved into DHS) ability to manage the program:
- The laws and regulations governing the program do not give USCIS the authority to deny or terminate a regional center’s participation based on fraud or national security concerns;
- The program extends beyond current USCIS mission to secure America’s promise as a nation of immigrations; and
- USCIS is unable to demonstrate the benefits of foreign investment into the U.S. economy.
(See Office of Inspector General Report, OIG-14-19, p.1) As a result, the Inspector General concluded that “USCIS cannot administer and manage the EB-5 regional center program effectively.” (Id. at p.13)
Several high-profile officials have recently come under scrutiny for impropriety related to the EB-5 program. The current Deputy Secretary of Homeland Security, former USCIS Director Alejandro Mayorkas, is under investigation by the Inspector General due to allegations that he improperly helped a Virginia-based tech company secure an EB-5 visa. (Associated Press, July 23, 2013) Run by former Secretary of State Hillary Rodham Clinton’s brother, the company allegedly reached out to Mayorkas for help approving the visa for a Chinese executive whose application had already been denied twice. (See FAIR Legislative Update, Jul. 30, 2013) In addition, news broke late last year that Senate Majority Leader Harry Reid (D-NV) pressured Mayorkas to grant expedited review of visa applications for about two dozen foreign investors to a casino hotel renovation project in Nevada. (Washington Times, Dec. 10, 2013) The foreign investors, who have given large donations to the Majority Leader’s political party in recent years, received EB-5 visas for investing in the SLS Hotel despite USCIS employees initially rejecting the expedited review due to “suspicious financial activity.” (Id.)
Congress Scrutinizes DHS Chief of Staff for Links to Convicted Lawmaker
Department of Homeland Security Secretary (DHS) Jeh Johnson’s chief of staff, Christian Marrone, is the latest DHS employee to come under scrutiny by Congress. Marrone’s father-in-law and former boss, then Pennsylvania State Senator Vince Fumo, was convicted of 137 counts of fraud, obstruction of justice, tax evasion and conspiracy in 2009. (Philadelphia Weekly, Jan. 7, 2010) Areas of concern relate to testimony at Fumo’s trial that suggest Marrone may have been involved with a nonprofit created and defrauded by Fumo, planned with Fumo to sabotage a gubernatorial campaign, and whether he had family who received jobs unfairly from Fumo.
Several Members of Congress are questioning whether Marrone is fit for such a high profile position within the department. (Philadelphia Inquirer, Feb. 14, 2014) On February 11, Senate Judiciary Committee ranking member Charles Grassley (R-IA), House Oversight and Government Reform Committee Chair Darrell Issa (R-CA), and House Subcommittee on National Security Chair Jason Chaffetz (R-UT) sent a letter to Jeh Johnson questioning whether he was adequately vetted for a job at DHS where he “will play an integral role in overseeing billions of taxpayer dollars and handling sensitive intelligence about terrorist threats.” (Letter to Jeh Johnson, Feb. 11, 2014; Philadelphia Inquirer, Feb. 14, 2014) The Members of Congress are concerned that DHS “refused to answer even the most basic questions about the testimony [from Senator Fumo’s corruption trial] and role of Mr. Marrone, a former aide in the Pennsylvania General Assembly, in connection with corruption charges against state Sen. Vince Fumo in 2008.” (Id.) The Congressmen continued, “it appears the Department was either unaware of or willfully disregarded 2008 testimony revealing ethical questions about Mr. Marrone’s prior conduct.” (Id.) The Congressmen are requesting all communications relating to any FBI background checks on Marrone and Secretary Johnson’s role in Marrone’s vetting. (Id.)
In particular, legislators are scrutinizing Marrone’s involvement with a Philadelphia nonprofit founded by Fumo called Citizens’ Alliance for Better Neighborhoods which Fumo defrauded by directing its tax-free donations toward his personal home’s renovations. (See Philadelphia Weekly, Jan. 7, 2010) According to Fumo’s indictment, Marrone worked at Citizens’ Alliance although he only drew a salary from his job as a Pennsylvania General Assembly aide. (Washington Times, Feb. 2, 2014) Marrone was never charged by prosecutors for conspiring with Fumo, but prosecutors estimated that Marrone spent 80 percent of his first year and a half in his state job as an aide doing the private work of Fumo. (Id.) Furthermore, according to the Washington Times, Marrone accepted $4,000 from the nonprofit to pay the cost of a course to prepare him to take the state bar examination, despite the nonprofit’s stated mission of using funds to help underserved urban neighborhoods. (Washington Times, Feb. 17, 2014)
Another area of concern for the Congressmen is whether Marrone planned to derail Pennsylvania Governor Ed Rendell’s (D-PA) gubernatorial campaign. In a 2001 e-mail, Marrone recommended that Fumo disguise the true source of a developer’s proposed political donation and spy on then-Mayor Ed Rendell. (Washington Times, Feb. 17, 2014) In the e-mail, Marrone suggested that Fumo hire a private investigator to spy on renovations at one of future Governor Rendell’s homes to determine whether he was using nonunion workers, and then asked Fumo to allow him to give the detective’s findings to Mr. Rendell’s political rival. (Id.)
Finally, lawmakers are concerned whether Marrone and his family personally benefited from his job working for State Senator Fumo. According to testimony by Marrone’s father, Senator Fumo helped him obtain an appointment as the Pennsylvania Turnpike Commission’s director of operations. (Washington Times, Feb. 2, 2014) At that time, Marrone was married to Senator Fumo’s daughter. (Id.) Later, Marrone testified against his father-in-law in the 2008 corruption trial. (Id.)
Marrone is not the first chief of staff to a DHS Secretary in the Obama Administration who has come under scrutiny. Suzanne Barr, former DHS Secretary Janet Napolitano’s chief of staff, resigned amidst allegations that she sexually harassed staff. (New York Daily News, Sept. 2, 2012) In addition, recently confirmed DHS Deputy Secretary Alejandro Mayorkas remains under investigation by the Inspector General’s office for whether he improperly administered the EB-5 investor visa program when he was director of U.S. Citizenship and Immigration Services. (Associated Press, July 23, 2013)
Survey: Business Leaders Want More Cheap Labor
According to a recent survey conducted by The Chicago Council on Global Affairs, Midwest business leaders support increasing low-skilled and high-skilled immigration as well as amnesty for the 12 million illegal aliens in the country. (The Chicago Council Midwest Business Leaders Immigration Survey, Feb. 2014) Specifically, the data show that 65 percent of the 500 Midwest business leaders surveyed support the Senate’s mass guest worker amnesty bill, S. 744, and 75 percent favor immigration “reform” that grants work authorization to the illegal alien population. (Id. at 7-9) Additionally, the survey found that 69 percent of Midwest businesses want more high-skilled immigrants and 61 percent want more low-skilled immigrants allowed into the country. (Id. at 12)
The survey further reveals that the executives view high levels of immigration as an important factor to their companies’ profitability. For instance, nearly 68 percent of business leaders think immigration is “good for their own companies.” (Id. at 4) Tellingly, more than three quarters (77 percent) of those surveyed said it is important for Congress to pass “significant new immigration legislation this year.” (Id. at 7) By comparison, a January Gallup poll revealed that only three percent of American adults surveyed believe immigration is a priority that should be addressed in 2014. (Gallup Poll, Jan. 15, 2014)
This survey is just the latest example of the business community favoring access to more foreign labor over American workers. Last September, high level executives of over 100 large corporations wrote to House Speaker John Boehner (R-OH) and Minority Leader Nancy Pelosi (D-CA) urging them to pass “comprehensive” immigration reform despite many of those same companies having laid off American workers. (Letter to Boehner, Pelosi, Sept. 10, 2013; see also FAIR Legislative Update, Sept. 18, 2013) Then in January, the U.S. Chamber of Commerce’s president Thomas Donohue declared that the pro-amnesty business lobby is “determined to make 2014 the year that immigration reform is finally enacted” and promised to play an active role during the election cycle to defeat amnesty opponents. (Remarks by Thomas Donohue, Jan. 8, 2014; see also FAIR Legislative Update, Jan. 15, 2014) And just last week, inside-the-beltway publication Politico reported that pro-amnesty billionaire Paul Singer is quietly funneling money to like-minded Republican candidates for the 2014 elections. (Politico, Feb. 18, 2014)
The push for mass immigration by Midwest business leaders detailed in The Chicago Council’s survey comes despite persistently high unemployment in the region. For example, the three most populated Midwest states — Illinois (8.6 percent), Michigan (8.4 percent), and Ohio (7.2 percent) — all have unemployment rates that have exceeded the national unemployment rate since at least December 2012. (Bureau of Labor Statistics, Jan. 28, 2014) The unemployment rate for the entire Midwest region currently matches the national unemployment rate (6.7 percent) largely buoyed by North Dakota’s booming economy (2.6 percent), which has not been dependent on immigrant labor. Given this weak job market, The Chicago Council unsurprisingly noted in the survey’s introduction that “people in the Midwest are generally the least supportive of immigration reform.” (The Chicago Council Midwest Business Leaders Immigration Survey at 1) In fact, only 45 percent of Midwest adults polled by the Washington Post last July support the Senate’s mass guest worker amnesty bill. (Washington Post, July 24, 2013) Remarkably, 58 percent of the Midwest business leaders surveyed believe that immigration negatively impacts American workers’ job security. (The Chicago Council Midwest Business Leaders Immigration Survey at 4)
Washington Legislature Passes DACA Financial Aid Bill
On Wednesday, February 19, the Washington House of Representatives passed Senate Bill (SB) 6523, which extends state need grants to illegal aliens who have received deferred action (essentially a stay of deportation) under President Obama’s Deferred Action for Childhood Arrivals (DACA) program. State need grants provide eligible students additional taxpayer-funded financial aid awards to further reduce the cost of tuition. (Washington Student Achievement Council, 2014) The bill, which passed the Washington Senate in January, passed the House by a vote of 75 to 22. (Reuters, Feb. 19, 2014)
These new subsidies to illegal alien students come on top of taxpayer-funded in-state tuition rates for illegal aliens at Washington’s public universities and colleges. (Washington Post, Feb. 2, 2014) To pay for this new expenditure, SB 6523 appropriates $5 million of taxpayer money to the state need grant program. (Senate Bill 6523) “This is about keeping our best and brightest here in Washington, and giving everybody a shot at the American Dream,” said Representative Zach Hudgins, chief House sponsor of the bill. (Bellevue Reporter, Feb. 20, 2014)
While Hudgins and other Washington legislators are willing to use taxpayer money to subsidize the education of illegal aliens, they seem less concerned about supporting the education of students who are citizens or legal aliens. Last year over 32,000 of the state’s citizen and legal resident students were denied state need grants due to insufficient state funding. (Reuters, Feb. 19, 2014) In addition, between fiscal years 2008 and 2013, Washington public colleges and universities were forced to increase tuition on average by more than 63.6%, eliminate hundreds of staff positions, freeze hiring and staff salaries, limit in-state resident enrollment, eliminate academic programs, increase class sizes, cut student support services, and make countless other subtractions. (Center on Budget and Policy Priorities, 2013; Washington Higher Education Coordinating Board, 2012; Associated Press, Apr. 16, 2011)
Representative Mark Hargrove voted against the bill because he believes SB 6523 will hurt the middle class. (Bellevue Reporter, Feb. 20, 2014) “Right now, the taxpayers in this state are on the hook for paying for the education of 6.6 million Washingtonians. If we pass this, they’re on the hook for the kids of 7 billion people in the world.” (Id.)
To avoid challenge from the public, House supporters short-circuited the process and suspended normal order, which requires bills to be heard in committee before consideration by the full House. (SB 6523 History) By bypassing the House committee process, the public was deprived of any opportunity to testify at a public hearing with concerns regarding the bill. In the same way, Senate supporters rushed SB 6523 through the Senate in January. (Id.) No one in the State of Washington had an opportunity to object or contact their state senator or representative with concerns regarding the bill.
SB 6523 will now be sent to Governor Jay Inslee’s desk for approval, who has previously promised to sign the bill. (Reuters, Feb. 19, 2014) Once signed by the Governor, the bill will become law and go into effect in June 2014.
California State Senator Proposes Health Care for Illegal Aliens
A California state senator has proposed a bill to provide illegal aliens the same eligibility for subsidized health care now available to the state’s lawful residents. On February 14, Senator Ricardo Lara, the Democrat representing Long Beach and Southeast Los Angeles, announced he was introducing the “Health For All Act.” (Senator Lara Press Release, Feb. 14, 2014) Lara’s bill would extend eligibility to those currently disqualified by unlawful immigration status to all Medi-Cal services. (Kaiser Health News, Feb. 18, 2014; CA SB 1005). Currently, illegal aliens are only eligible for emergency and pregnancy coverage under Medi-Cal. (See California Department of Health Care Services; see also Benefits.gov)
Lara’s bill would also create another health care exchange for illegal aliens. The new exchange would be a creation entirely of the state government, but would be modeled after the health care exchange California has set up under the auspices of the Affordable Care Act (ACA) and run by the same California officials. (CA SB 1005; see also Kaiser Health News, Feb. 18, 2014). Therefore, though the ACA excludes illegal aliens from eligibility from California’s current health care exchange, they would be eligible for the same level of subsidies under the exchange created by Lara’s bill. (Id.; see also Healthcare.gov )
The beneficiaries of the proposed program would be California’s estimated 2.3 to 2.6 million illegal aliens, the largest illegal population of any state, and the costs would be borne by the state of California. (Kaiser Health News, Feb. 18, 2014). Although California’s Medi-Cal program is currently funded through a combination of federal and state funds, and the ACA provides federal subsidies to those purchasing health insurance under California’s exchange, the proposed extension to Medi-Cal and health insurance subsidies under the new exchange would be funded by California alone. (Id.; Orange County Register, Oct. 25, 2013)
Senator Lara argued that his bill would improve state health outcomes and save money, though he did not propose how it should be paid for specifically. ”By ensuring everyone has access to health care, we can improve the health of our entire community, limit the overcrowding of emergency rooms, and reduce the costs of healthcare in California,” he stated. ”Excluding people from access to care hurts the overall health of our communities, and does not reflect California values.” (Senator Lara Press Release, Feb. 14, 2014)
If passed, the proposed legislation would be the latest in a series of California bills to provide benefits to illegal aliens. While federal law generally prohibits illegal aliens from receiving public benefits, if a state passes a law that “affirmatively provides” eligibility for specific benefits, it may avoid the general prohibition. (See 8 U.S.C. § 1621 (d)) Last year, the California legislature exploited this opening in the federal law to pass a number of such laws, granting illegal aliens eligibility for driver’s licenses, law licenses, and in-state tuition at public universities and community colleges. California Governor Jerry Brown signed these and other immigration related bills in October. (Governor Jerry Brown Press Release, Oct. 5, 2013; See FAIR’s Legislative Update, Oct. 9, 2013)