Some strange numbers have just emerged from the government's immigrant investor (EB-5) program.
It looks like Obama administration efforts to lure more aliens into making half-million-dollar investments in exchange for green cards may be bringing in more initial money, but that, simultaneously, earlier investors may have decided they do not want the green cards or recognize that they do not qualify for them.
There are two steps in the EB-5 process: In the first the alien files a form I-526 to get conditional residence cards for the investor, the investor's spouse, and their children; he certifies that he either has invested half a million dollars in a government-approved depressed area or that he is "actively in the process of investing the amount required", to quote the form's instructions.
In the second step, if at least two years later the money is still invested and if the family still wants to live in America, the alien investor files another form (I-829) designed to convert his family's set of conditional cards to full-fledged green cards. The conditional cards expire after two years.
One would expect that the trend in the applications filed in the second step would echo that of the first step, lagged by two or more years. But EB-5 green card applications, as you can see at the bottom of the third column in the table below, have just about collapsed in the first half of this fiscal year. What's going on?
| Time Period | Aliens Investing, the First Step of the EB-5 Process; Form I-526 | Aliens Seeking Green Cards, the Second Step in the EB-5 Process; Form I-829 |
| First Half, FY 2009 | 396 | 174 |
| Second Half, FY 2009 | 632 | 263 |
| First Half FY, 2010 | 832 | 311 |
| Second Half, FY 2010 | 1,123 | 457 |
| First Half, FY 2011 | 1,600 | 1,150 |
| Second Half, FY 2011 | 2,205 | 1,195 |
| First Half, FY 2012 | 2,771 | 375 |
| Source: USCIS, http://www.docstoc.com/docs/119849060/2012‑EB‑5‑statistics. | ||
The table shows the flow of applications for the program, not any agency action on those applications (most of which are approved). In other words, more and more aliens seem to make the first moves toward the investment program, while the number of applications in the second phase declines sharply.
Looking a little more closely at the second set of applications over quarters of the fiscal years rather than halves, as shown in the table, we see a consistent pattern of decline since the second quarter of FY 2011.
Second Phase Applications (I-829) per Quarter
- FY 2011 Q1: 531
- FY 2011 Q2: 619
- FY 2011 Q3: 603
- FY 2011 Q4: 592
- FY 2012 Q1: 250
- FY 2012 Q2: 125
Aliens who either actually invested in the program earlier, or claimed that they had invested, virtually all of them motivated by the prospect of legal immigration status in the United States, have apparently suddenly lost interest or decided that they were not qualified for it. These are applications for green cards, as noted earlier, not decisions by USCIS on such applications.
the EB-5 Visa Program:
Meanwhile, the first phase applications have become more numerous, presumably in response to the vigorous and well-publicized efforts of USCIS Director Alejandro Mayorkas to "streamline" the program and encourage more affirmative decisions in the hopes of bringing more aliens and their small-scale investments to the country. The apparent success of these efforts can be seen in the steadily growing number of initial applications in the second column of the table.
As we pointed out in a recent CIS Backgrounder, the investments offered to the aliens are often not very attractive, so the government is relying on the green cards – not financial gain – as the draw.
But once the money is invested, why not seek the actual green cards?
The situation is odd and one that USCIS has not explained. Perhaps, as we noted in the cited Backgrounder, many of the initial "investments", even though approved by USCIS staff, were not really investments, but unapproved transactions like loans (which do not qualify) and the investors decided not to pursue the matter. Or maybe after they filed the first application they did not finish the "process of investing".
Or maybe, and this would be hard for some Americans to accept, the alien investors decided that they really did not want to live here after all given their EB-5 experiences.