Much EB-5 Action: Mayorkas Advances, Casino Deal Exposed, Lawyer Zapped

By David North, December 11, 2013

There was much activity today related to the EB-5 immigrant investor visa: EB-5 booster Alejandro Mayorkas's nomination moved forward in the Senate, an EB-5 deal in Las Vegas with political ramifications was exposed, and (to quote the Florida press) "one of the nation's biggest EB-5 lawyers" being barred from practicing immigration law.

The Senate. USCIS Director Mayorkas' nomination as deputy secretary of the Department of Homeland Security (DHS) was recommended to the full Senate by the homeland security committee on a party-line vote, with nine votes in favor and all the Republicans voting present. See video of the meeting here.

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The vote came in the morning after a vigorous debate among the senators, with Sen. Tom Coburn (R-Okla.) leading the fight against the nomination and the committee chairman, Sen. Tom Carper (D-Del.), urging confirmation.

The main argument against the confirmation was that there is a pending investigation of Mayorkas's handling of the EB-5 immigrant investor program by the Department of Homeland Security's Acting Inspector General (who is himself under investigation), and that no confirmation should be forthcoming until that inquiry has concluded. Sen. Coburn made the point that there was ample Senate precedent, spread over several administrations, that nominees under investigation do not get confirmed.

The main counterargument was that the investigation had been going on too long and that DHS was in need of "Senate-confirmed leadership", with the secretaryship and many other positions being filled by acting appointees. The Democrats unanimously praised Mayorkas as an able public servant who has been twice approved in the past for executive appointments.

Sen. Coburn spent several minutes giving a highly detailed critique of the EB-5 program generally, noting problems with corruption, money laundering, tax evasion, national security breaches, and the lack of proof of job creation. Unfortunately he did not make those arguments last year when the regional center aspect of the EB-5 program (the part that allows $500,000 investments for a family's worth of green cards) was renewed with little opposition by Congress.

What I saw as new in the confirmation argument was barely touched upon: a reason why the IG's investigation was going so slowly. With a staff of 650, the IG has assigned one investigator and two research aides to the Mayorkas investigation, according to Sen. Carper in what amounted to a verbal footnote. No one commented on this revelation.

Though this did not come up at the meeting, my sense is that DHS Acting Inspector General Charles K. Edwards may have concluded that his hold on his own job will become weaker once the Mayorkas investigation comes to a close, so he is in no hurry to make that happen. For more on the Mayorkas-Edwards relationship see this earlier blog.

That the IG found "no criminal wrongdoing" on Mayorkas' part was stressed by the Democrats, with the Republicans saying that the jury was still out on the question of "wrongdoing" per se. There was a preliminary report on the IG investigation, apparently a verbal one, to the chair and the ranking member (Coburn) of the committee.

The Mayorkas nomination now goes to the floor of the Senate, where the rules have been changed recently regarding filibusters on presidential nominations; a change that favors his confirmation, perhaps by another party-line vote. Whether other delaying tactics may be used successfully by the GOP minority is not known.

The Casino. Meanwhile, today's Washington Times ran an article headed "VEGAS RULES: Harry Reid pushed feds to change ruling for casino's big-money foreigner".

This dealt with charges that both senators Harry Reid (D-Nev.) and, less vigorously, Dean Heller (R-Nev.) had pressured the administration to reverse itself on approving EB-visas for some investors in a large new casino hotel.

It was one of those all-too-common situations when EB-5 money was needed (my take, not that of the Washington Times) for the last and thus most junior piece of the financing package before the whole deal fell into place. According to the article:

The move to overturn what is normally a non-appealable visa decision came despite concerns about "suspicious financial activity" involving some of the visa applicants from Asia and it ultimately benefitted several companies whose executives have donated heavily in recent years to the Democrats.

It sounded as if it were part of Sen. Coburn's speech.

The Lawyer. To add geographical and gender balance to the days's collection of bad news for the EB-5 program, we have a story out of Naples, Fla., about Canadian lawyer Karen Caco, who is described as "one of the nation's biggest EB-5 attorneys" pleading guilty to immigration fraud and whose sentence included a prohibition from the practice of immigration law for three years and — this was not clear — probable deportation to Canada.

If you Google her name, you will find lots of earlier listings of her as an immigration and EB-5 lawyer as well as a link to a paywall-protected article in the Naples (Fla.) News.

One of the things that got Ms. Caco in trouble was her creation, for her own H-1B visa use, of a phony corporation in which the nominal employer and boss was her own paralegal. It was a sort of I-am-my-own-grandma scheme that did not work.