A DHS Investigation Bumps Into McAuliffe’s Old Business Partners

This investigation could fizzle… or it could have big repercussions:

President Barack Obama’s nominee to be the Homeland Security Department’s No. 2 official is under investigation over alleged intervention to obtain approval for a company run by a brother of Hillary Clinton to participate in a program that provides U.S. visas for foreign investors, according to an email the department’s inspector general sent to lawmakers Monday night and obtained by NBC News.

The investigation into Alejandro Mayorkas – who currently serves as director of U.S. Citizenship and Immigration Services (UCIS), an agency within Homeland Security – was opened in September 2012 based on a referral from an FBI counterintelligence analyst, according to the email. The inspector general probe was first reported by The Associated Press.

“At this point in our investigation, we do not have any findings of criminal misconduct,” the email from the Homeland Security inspector general states. “We are unaware of whether Mayorkas is aware that we have an investigation.”

The probe is based on allegations that Mayorkas personally intervened to win an approval for Gulf Coast Funds Management, a financing company headed by Clinton’s brother Anthony Rodham, after USCIS officials rejected its application, according to an aide to GOP Sen. Charles Grassley, who had received internal USCIS emails about the matter from a department whistleblower.

If Gulf Coast Funds Management sounds familiar, it’s because one of its clients is its client is… GreenTech Automotive, the electric car company that Virginia Democratic gubernatorial candidate Terry McAuliffe headed up until recently. (UPDATE:  According to Gulf Coast Funds Management’s Form I-924A filed with the U.S. Customs And Immigration Services, GreenTech is GCFM’s only client. This was the case back in 2009, too. )

Let’s walk through this slowly. Gulf Coast Funds Management is a Regional Center, meaning a government-approved private organization that aims to help economic growth in a particular geographic area and that is authorized to line up foreign investors with application slots for federal EB-5 visas.

Congress created the federal EB-5 program in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. To qualify, a foreigner must invest at least $1 million, or $500,000 in either a rural area or an area with high unemployment. The investment must “create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years.” The government makes 10,000 EB-5 visas available each year, with 3,000 administered through the Regional Centers. According to one advocate for the program quoted in the Memphis Commercial Appeal, three out of every four visa recipients come from China.

It would be wrong and false to say that a Regional Center sells U.S. visas, or that there is any court-admissible evidence that its actions or its clients’ actions constitutes a visa-for-sale-scheme. (Hello, GreenTech Autmotive lawyers contemplating a libel suit, like the one you filed against the Franklin Center! Notice the careful wording in that previous sentence!) Nonetheless, at least two Virginia state officials examined GreenTech Automotive’s proposals and reacted with great skepticism:

Sandi et al. Even if the company has investors “lined up”, I maintain serious concerns about the establishment of an EB-5 center in general, and most specifically based on this company.Not only based on (lack of) management expertise, (lack of) market preparation, etc. but also still can’t get my head around this being anything other than a visa-for-sale scheme with potential national security implications that we have no way to confirm or discount. . . . 

This “feels” like a national political play instead of a Virginia economic development opportunity. I am not willing to stake Virginia’s reputation on this at this juncture. 

While the Regional Centers are not allowed to sell the U.S. visas, they are allowed to point out that investment in their projects may qualify a foreign citizen for a residence visa, and they may appear to suggest that one directly leads to the other. For example, at the top of the website for Gulf Coast Funds Management LLC, the Statue of Liberty’s torch is next to the slogan, “Invest in your future with EB-5.”

Gulf Coast Financial Management needed approval from USCIS to expand its regional center to include Tennessee and Virginia parts of “Project Mastiff,” GreenTech Automotive’s plan to manufacture parts in Virginia, build a warehouse facility in Tennessee, and build an assembly plant in Mississippi. The effort to reverse that initial rejection appears to be connected to the inspector general’s investigation into “alleged conflicts of interest, misuse of position, mismanagement of the EB-5 program, and an appearance of impropriety by Mayorkas and other USCIS management officials.”

While  Alejandro Mayorkas is still being investigated, we know McAuliffe was also making efforts to get the Department of Homeland Security, urging them to get U.S. Citizenship and Immigration Services, urging them to reverse their decision on Gulf Coast Funds Management. Terry McAuliffe, in December 2010, writing directly to Janet Napolitano. Watchdog.org noted that McAuliffe was insisting to DHS that the EB-5 funding that their decision impeded was “crucial” to his company , while telling the public “we are in great shape financially.”

And according to NBC News’ report,  DHS officials acknowledged that the politically-connected McAuliffe and his allies were pushing hard for the decision to be reversed:

In a letter to Homeland Secretary Janet Napolitano released Tuesday night, Grassley asked for details about the department’s handling of the company’s application and quoted from an internal agency email about Gulf Coast describing it as a “politically…well connected company” and noting the involvement of Rodham and McAuliffe. However, the author of the email — who is not identified — added after noting the firm’s political connections, “not that I think it matters because it shouldn’t impact how we do our job.” 

Again, the Inspector General could conclude that nothing illegal occurred. We’ll just have to wait and see.

And wonder if the investigation will be resolved before November of this year.

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