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S. HRG. 111–256 

PROMOTING JOB CREATION AND FOREIGN INVESTMENT IN THE UNITED STATES: AN ASSESSMENT OF THE EB–5 REGIONAL CENTER PROGRAM 

HEARING 

BEFORE THE

COMMITTEE ON THE JUDICIARY 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FRIST SESSION 

JULY 22, 2009 

Serial No. J–111–37 

Printed for the use of the Committee on the Judiciary 

( 

(II) 

COMMITTEE ON THE JUDICIARY 

PATRICK J. LEAHY, Vermont, Chairman 

HERB KOHL, Wisconsin 

DIANNE FEINSTEIN, California 

RUSSELL D. FEINGOLD, Wisconsin 

CHARLES E. SCHUMER, New York 

RICHARD J. DURBIN, Illinois 

BENJAMIN L. CARDIN, Maryland 

SHELDON WHITEHOUSE, Rhode Island 

AMY KLOBUCHAR, Minnesota 

EDWARD E. KAUFMAN, Delaware 

ARLEN SPECTER, Pennsylvania 

AL FRANKEN, Minnesota 

JEFF SESSIONS, Alabama 

ORRIN G. HATCH, Utah 

CHARLES E. GRASSLEY, Iowa 

JON KYL, Arizona 

LINDSEY O. GRAHAM, South Carolina 

JOHN CORNYN, Texas 

TOM COBURN, Oklahoma 

BRUCE A. COHEN, Chief Counsel and Staff Director 

MATT MINER, Republican Chief Counsel 

(III) 

C O N T E N T S 

STATEMENTS OF COMMITTEE MEMBERS 

Page 

Franken, Hon. Al, a U.S. Senator from the State of Minnesota .......................... 3 

Kohl, Herb, a U.S. Senator from the State of Wisconsin, prepared statement .. 116 

Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont .................... 1 

prepared statement .......................................................................................... 122 

Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama .......................... 3 

WITNESSES 

Dougherty, Michael, former Ombudsman, U.S. Citizenship and Immigration 

Services, Washington, DC ................................................................................... 11 

Drinkard, Ron, Director, Alabama Center for Foreign Investment, Montgomery, Alabama .................................................................................................. 13 

Kruszka, Robert, Deputy Chief, Service Center Operations, U.S. Citizenship 

and Immigration Services, Washington, DC ...................................................... 4 

Stenger, William, President, Jay Peak Resort, Jay, Vermont ............................. 8 

Yale-Loehr, Stephen, Executive Director, Invest in the USA, Ithaca, New 

York ....................................................................................................................... 6 

QUESTIONS AND ANSWERS 

Responses of Robert Kruszka to questions submitted by Senators Hatch, 

Leahy and Specter ............................................................................................... 23 

Responses of Stephen Yale-Loehr to questions submitted by Senator Leahy .... 32 

SUBMISSIONS FOR THE RECORD 

Anderson, K. David, President, Whacom Opportunities Regional Center 

(WORC), Bellingham, Washington, July 17, 2009, letter ................................. 37 

Artisan Business Group, Brian Su, CEO/President, Springfield, Illinois, letter 38 

Bellingham Hearld, John Stark, July 17, 2009, article ........................................ 39 

Bissell, William, P.E., Montpelier, Vermont, June 18, 2009, letter .................... 40 

Black River Design, John Hemmelgam, Partner and Rick Burroughs, Partner, 

Montpelier, Vermont, June 17, 2009, letter ....................................................... 41 

Caledonian-Record, St. Johnsbury, Vermont: 

Jay Peak Co-Owner Eyes Bio-Tech Jobs, July 18, 2009, article ................... 42 

Jay Peak Resort has Impact on Economy, July 20, 2009, article ................. 44 

Chang, Lawrence, President & CEO, Maryland Center for Foreign Investment, LLC, Federally Designated Regional Center, Columbia, Maryland, 

July 15, 2009, letter ............................................................................................. 46 

CanAM Enterprises, LLC, Tom Rosenfeld, President & CEO, New York, 

New York, July 20, 2009, letter .......................................................................... 48 

Candido, James, ACCD Regional Center Director, Montpelier, Vermont, statement ...................................................................................................................... 52 

Chae, Min, M&D Regional Center, LLC, Lynwood, California, July 17, 2009, 

letter ...................................................................................................................... 56

Conrad, Robert, President, Conrad Construction, Inc., Derby, Vermont, June 

1, 2009, letter ....................................................................................................... 58 

Cummings, Alan G., Chief Executive Officer, Seldon, Windsor, Vermont, July 

21, 2010 ................................................................................................................. 59 

Dougherty, Michael, former Ombudsman, U.S. Citizenship and Immigration 

Services, Washington, DC, statement ................................................................ 60 

Drinkard, Ron, Director, Alabama Center for Foreign Investment, Montgomery, Alabama, statement and attachments ................................................. 105 

Page

IV 

Hardy Structural Engineering, Tim Hardy PE, Owner, Colchester, Vermont, 

June 24, 2009, letter ............................................................................................ 112 

Harrison Concrete Construction, Inc., James A. Harrison, President, Georgia, 

Vermont, June 23, 2009, letter ........................................................................... 113 

Heafey, Brendan, Principal, Bay Area Reional Center, LLC, Oakland, California, July 16, 2009, letter ................................................................................. 114 

Kruszka, Robert, Deputy Chief, Service Center Operations, U.S. Citizenship 

and Immigration Services, Washington, DC, statement and attachments ..... 117 

Levinsohn, Paul, Esq., Managing Principal, New York City Regional Center, 

New York, New York, July 17, 2009, letter ....................................................... 124 

Lewison, Michael, California Global Alliance, Selma, California, July 17, 

2009, letter ............................................................................................................ 127 

Mirabella, James, President, Granite State Contract Furnishings, LTD, 

(GScf), Intervale, New Hampshire, June 26, 2009, letter ................................. 128 

O’Neil, Thomas P., III, Chief Exective Officer, O’Neill and Associates, and 

William J. Leong, Managing Director, Boston, Massachusetts, statement ..... 129 

Padgett, Jeffrey A., P.E., Principal Engineer, ESI, Burlington, Vermont, June 

17, 2009, letter ..................................................................................................... 135 

Pappalardo, Michael, President and CEO, Mike’s Electric Inc., Jay, Vermont, 

June 23, 2009, letter ............................................................................................ 136 

Ryea, Richard R., Ryea & Sons Masonry, Richford, Vermont, June 24, 2009, 

letter ...................................................................................................................... 137 

Schwartz, Chester P., Manager, Waveland Ventures, LLC., Subsidiary Colorado Regional Center, LLC, Grenwood Village, Colorado, July 16, 2009, 

letter ...................................................................................................................... 138 

Schwigen, Kraig A., Executive Director, on Behalf of Patrick F. Hogan, President, CMB Export LLC, Moline, Illinois, July 17, 2009, letter ........................ 140 

Shea, Timothy P., Vice President and Congressional Liaison, Lake Champlain 

Regional Chamber of Commerce, Burlington, Vermont, June 24, 2009, letter .......................................................................................................................... 144 

South Florida Investment Regional Center, LLC J. Eric Gould, Partner, 

Miami, Florida, July 17, 2009, letter .................................................................. 146 

Stenger, William, President, Jay Peak Resort, Jay, Vermont, statement .......... 148 

Sutton, Sam, Managing Member, Lake Buena Vista Resort, Coral Springs, 

Flordia, July 16, 2009, letter ............................................................................... 154 

Western Washington University, Hart Hodges, PHD, Director, Bellingham, 

Washington ........................................................................................................... 155 

Weststeyn, Stephen, Northern California Regional Center, Linden, California, 

July 15, 2009, letter ............................................................................................. 156 

Yale-Loehr, Stephen, Executive Director, Invest in the USA, Ithaca, New 

York, statement .................................................................................................... 167 

(1) 

PROMOTING JOB CREATION AND FOREIGN 

INVESTMENT IN THE UNITED STATES: AN 

ASSESSMENT OF THE EB–5 REGIONAL CENTER PROGRAM 

WEDNESDAY, JULY 22, 2009 

U.S. SENATE, COMMITTEE ON THE JUDICIARY, Washington, DC. 

The Committee met, pursuant to notice, at 10:07 a.m., Room 226, 

Dirksen Senate Office Building, Hon. Patrick J. Leahy, Chairman 

of the Committee, presiding. 

Present: Senators Sessions and Franken. 

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. 

SENATOR FROM THE STATE OF VERMONT 

Chairman LEAHY. Thank you. Thank you all for being here. I 

thank Senator Sessions and Senator Frank. Like everybody else, 

we all have about 12 things going on, but this hearing I think is 

very, very important. We are going to talk about the EB–5 Immigrant Investor Regional Center Program, which is quite a mouthful 

for something that really works. 

It is nice, in this economy, to have something that does work. It 

has been responsible for the investment of hundreds of millions of 

dollars. It has created tens of thousands of jobs in American communities since 1993. It has paved the way for ski resort expansion 

in Vermont and dairy operations in Iowa, energy development in 

Oklahoma and Texas, the manufacture of hurricane-resistant housing in Alabama, which is something we would like to think that we 

do not need, but, unfortunately and tragically, we do need in our 

country. 

Many of these things can be talked about as things that can 

bring about exporting. If somebody comes from another country to 

ski in Vermont, it is like an export. It is money to our state. If another country finds a need for the kind of housing you have in Alabama or the technology, then that is an export. But this is the nature of the projects financed by foreign investment through the Regional Center Program. 

One of the frustrating things for investors is that it has been reauthorized on a temporary basis, currently set to expire in September. That is why earlier this month I offered, along with Senator Sessions’ support, an amendment to the Department of Homeland Security appropriations bill to do just that, to make it permaVerDate Nov 24 2008 08:50 Feb 02, 2010 Jkt 054559 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54559.TXT SJUD1 PsN: CMORC
2 

nent, and the amendment was adopted on July 8 and I hope it will 

become part of that bill. 

I will be on that committee at conference and I hope to make 

sure it works. But I also want to make changes to improve the 

overall program. I have not yet introduced a broader EB–5 bill this 

Congress. So I invite the witnesses to suggest improvements that 

we might make to make it more workable for the agency, and for 

the communities and other stakeholders, for investors. 

I really see this meeting as something that we can do as kind 

of a dialog that will help all of us. I thank the U.S. Citizenship and 

Immigration Services for testifying today. The agency does have a 

crucial role to play. 

I welcome Bill Stenger from Vermont. He recognized the opportunities the Regional Center could bring to Vermont and used it to 

expand Jay Peak. Jay Peak is up in an area we call the Northeast 

Kingdom of Vermont, a very beautiful, very rural area. I am well 

familiar with it, especially because my wife was born there. 

He has turned Jay Peak into a year-round resort. What had been 

just a resort for a few months a year, he has turned it into a yearround one. He is attracting foreign investment dollars. But what it 

has done is it has also made it possible for the ripple effect in a 

community which really needed jobs, and now they have them. 

Sugarbush is another Vermont ski resort that took advantage of 

it to generate much needed capital. I know that resort well because 

every time I look out my living room window in Vermont, I am 

looking across the valley at it. 

Just last week, my staff visited with a company in Windsor, 

Vermont, called Seldon Technologies, inventors of carbon nanotube 

water purification systems, and they are thinking of the EB–5 program to fund domestic manufacturing jobs here in the United 

States. 

I also welcome—and I am sure the ranking member will be doing 

this later—Ron Drinkard of the Alabama Center for Foreign Investment and Stephen Yale-Loehr, who is actively involved in the 

EB–5 Regional Center Program, and Michael Dougherty, a former 

Ombudsman for USCIS. 

This type of immigration program is not unique to us. We have 

seen how Canada and England and the rest of the United Kingdom 

have used this very, very effectively. In fact, in the current difficult 

economy, Canada has been promoting their immigrant investment 

program all around the world and grabbing these investments. 

It is one of the reasons why we need to make sure, for investors, 

that it is permanent here in the United States, so we can do the 

same thing. We have a lot of foreigners who do want to invest here, 

and I will put my full statement in the record about the things 

they have to follow to do it. It is not just an easy given to get visas. 

They have to actually get actively involved. But we should look at 

what other countries do to get that investment. 

I will put my full statement in the record. 

[The prepared statement of Chairman Leahy appears as a submission for the record.] 

Chairman LEAHY. Senator Sessions. 

3 

STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM 

THE STATE OF ALABAMA 

Senator SESSIONS. Thank you, Mr. Chairman. I believe that this 

EB–5 program should be part of our immigration mix. It seems to 

me to meet the needs of people who like to come here and, quite 

significantly, it seems to me to be the kind of program that serves 

a legitimate interest of the United States. 

Whereas some people who come to our country, I think it is no 

doubt, do take jobs that would go to Americans, this program 

would appear to be the kind of program that creates jobs. In a time 

of rising unemployment, in particular, I think that the program 

makes a lot of sense. 

I was happy to accept Chairman Leahy’s amendment, second degree amendment to my E-Verify amendment recently which made 

it permanent. I think perhaps this will lay the groundwork for 

more expansion of it. There are 60 approved regional centers in 24 

states and in June of 2007, our Alabama Center for Foreign Investment, located in Montgomery, was approved. It is one of the only 

two statewide centers in the nation, and I am happy to work with 

Ron Drinkard working on that. 

You have been a staunch advocate and you have taken a lot of 

time and effort to explain to us the details of the program and it 

gives me confidence that this is a sound program. It is the kind of 

thing I would like to see expanded. 

It is estimated that 75 to 80 percent of all EB–5 green card petitions are filed through these regional centers and it has attracted 

more than $1 billion in foreign investment and created an estimate 

aggregate of 20,000 jobs for U.S. workers. The program has doubled between 2006 and 2007, but it does appear to be underutilized 

and could be more effective. 

On March 18, our Ombudsman, Mr. Dougherty, published a report detailing the recommendations that could be implemented to 

make the program more efficient. According to the report, less than 

1,000 of the allocated 10,000 immigrant visas per year were being 

used due to program instability, the changing economic environment, and more attractive immigrant investor programs in other 

countries. 

So we look forward, Mr. Chairman, to hearing more about this. 

It seems to me Canada has proven the viability of these kinds of 

programs. If we think carefully and study this in the right way, I 

believe this program could be expanded and would benefit the 

American economy. Thank you. 

Senator Franken, you had a couple of comments you wanted to 

make. 

STATEMENT OF HON. AL FRANKEN, A U.S. SENATOR FROM 

THE STATE OF MINNESOTA 

Senator FRANKEN. I do, Mr. Chairman. Thank you, Chairman 

Leahy. Our country is experiencing the highest national unemployment rates in three decades. While Minnesota State unemployment 

rate has traditionally been lower than the rest of the country, we 

have a number of counties that have unemployment rates well 

below the national average. 

4 

Clearwater County, for example, had an average unemployment 

rate of over 19 percent in the first 5 months of 2009, more than 

double the national average in the same period. Clearwater County 

is no outlier. In the first quarter of 2009, 12 of our 87 counties had 

unemployment rates that were greater than 150 percent of the national average. 

In times like these, any program that spurs investment in our 

economy should be strongly supported. I am particularly interested 

in the EB–5 Regional Centers Program, because it allows for foreign investment to concentrate in a particular geographic area and 

lowers requirements for rural regions or high unemployment areas, 

where an added stimulus is especially needed. 

This is a win-win program, the kind I like. Our local economies 

benefit, as do skilled entrepreneurial foreign investors who can join 

our national community and who surely will make further contributions to our economy. 

I am pleased that the program combats the old and false stereotype that immigrants take away our jobs. Immigrants add to and 

stimulate our economy. This program is an excellent showcase of 

just that trend. 

I fully support Chairman Leahy’s recent provision that will make 

the EB–5 Regional Center Program permanent. I will also support 

any measures to streamline and expand the program, particularly 

to states like Minnesota. 

Although three of our neighbors—Iowa, Wisconsin and South Dakota—have EB–5 Regional Centers, as of yet, we do not in Minnesota and I want to find out how we can change that. Thank you, 

Mr. Chairman. 

Chairman LEAHY. Thank you very much, Senator Franken. Our 

first witness is Robert Kruszka. He is the deputy chief of Service 

Center Operations for U.S. Citizenship and Immigration Services, 

an agency he has served for over 20 years. He previously worked 

in the Fraud Detection and National Security Division at USCIS 

headquarters. He also serves as a senior special agent for the Investigative Services Division. 

Incidentally, all of you, your full statement will be placed in the 

record, but please go ahead, Mr. Kruszka. 

STATEMENT OF ROBERT KRUSZKA, DEPUTY CHIEF OF SERVICE CENTER OPERATIONS, U.S. CITIZENSHIP AND IMMIGRATION SERVICES 

Mr. KRUSZKA. Thank you. Chairman Leahy, Ranking Member 

Sessions, Senator Franken and your staffs, I am grateful for the 

opportunity to appear before the Senate to discuss various aspects 

of the EB–5 immigrant investor program. My name is Robert 

Kruszka and I am the deputy chief of Service Center Operations 

for U.S. Citizenship and Immigration Services. 

I am extremely involved in the management and oversight of the 

EB–5 immigrant investor program. We want to thank the Chairman and the Committee for their support for this program, especially for the recent amendment to the Department of Homeland 

Security fiscal year 2010 appropriations bill to make the EB–5 Regional Center pilot program permanent. 

5 

USCIS has been working to improve the investor program by 

providing it with more dedicated resources, including more comprehensive training in the adjudication of this work to USCIS officers. All EB–5-related adjudications have been consolidated exclusively at our California service center. Previously, this workload 

was divided between two centers. 

The California service center now adjudicates all regional center 

proposals and any associated petitions and applications. USCIS believes that this workload consolidation will result in more consistent and expeditious EB–5 adjudications. 

Processing times have improved significantly as a result of these 

changes. One year ago, it took USCIS an average of 14 months to 

process a regional center proposal. It now takes 4 months. The average processing time for individual investor petitions has dropped 

from 7 months to 4 months and the processing time to remove the 

conditional status of permanent residents has dropped from over 18 

months to 6 months. 

There are currently a total of 60 approved and active regional 

centers present in 24 different U.S. states, inclusive of the District 

of Columbia. This is an increase from 23 regional centers a year 

ago. The list of active regional centers is posted on the USCIS 

Website and is updated anytime there is a change. 

USCIS has developed an e-mail account at 

uscisimmigrantinvestorprogram@dhs.gov for external EB–5 stakeholders to use when seeking general EB–5 program information, 

inquiring about the status of pending cases, or requesting the expedition of a pending EB5 case. 

USCIS has undertaken a series of initiatives to provide further 

transparency and streamline the adjudications process. Currently, 

there is no official application form for the regional centers’ proposals or subsequent amendments, and, thus, no fee is charged for 

these filings. 

Adjudications of regional center proposals are highly complex 

and time-consuming for USCIS personnel. USCIS has drafted a regional center application form which is in the process of being 

cleared for use. Further, a fee study is currently underway to determine the appropriate fee to collect for the adjudication of the regional center proposals. 

USCIS believes that the transparency in the administration of 

this program is critical to its success. To this extent, USCIS is 

holding quarterly meetings with external EB–5 stakeholders, to include the gentlemen to my left, to discuss any pending EB–5 issues 

or concerns that have surfaced in the program and to provide additional clarification and guidance as needed regarding the adjudication and/or processing of EB–5 petitions and related applications. 

USCIS notes that the uncertainty of whether the program is extended poses operational challenges for USCIS, as well as a troubling concern among the EB–5 stakeholder community. When the 

pilot program was scheduled to sunset without further legislative 

action by Congress, USCIS had to advise stakeholders of the steps 

it would take to hold pending regional center cases in abeyance for 

a finite period pending further congressional action. 

USCIS also advised EB–5 stakeholders that it would have to reject any future regional center proposals and associated regional 

6 

center I–526 individual investor petitions submitted after the sunset date. The uncertainty as to whether the immigrant investor 

pilot program will remain a viable vehicle for immigration to the 

U.S. through investment hampers marketing efforts by regional 

centers to attract prospective immigrant investors and also creates 

unease and apprehension among the existing regional centers as to 

whether their business plans will come to fruition. 

If the program is not permanently extended or, at a minimum, 

the President’s budget request to extend the pilot program for 

three more years is not enacted, then further uncertainty would be 

created among the EB–5 stakeholder community. 

Once again, thank you for the opportunity to be here today and 

for your support of this program. I am happy to answer any of your 

questions that you may have. 

[The prepared statement of Mr. Kruszka appears as a submission 

for the record.] 

Chairman LEAHY. Thank you. Thank you very much. Our next 

witness is Stephen Yale-Loehr. Stephen Yale-Loehr is the executive 

director of Invest in the USA, a trade association of EB–5 Immigrant Investor Regional Centers. Mr. Yale-Loehr has been practicing in the field of immigration law for over 25 years; author of 

a multi-volume treatise on immigration law; teaches at Cornell 

Law School. He is also counsel to Miller Mayer in Ithaca, New 

York. 

Mr. Yale-Loehr, please go ahead, sir. 

STATEMENT OF STEPHEN YALE-LOEHR, EXECUTIVE 

DIRECTOR, INVEST IN THE USA 

Mr. YALE-LOEHR. Chairman Leahy, Senator Sessions, Senator 

Franken, thank you very much for inviting me to testify. I plan to 

do four things in the next 5 minutes. 

First, I will summarize the EB–5 program. Second, I will summarize the economic benefit that the program is bringing to the 

United States already. Third, I will identify some problems that 

hamper the current EB–5 program. Fourth, I will offer some recommendations to improve the EB–5 program so it can achieve its 

true potential. 

First, a short summary of the EB–5 program. Congress created 

the fifth employment-based preference category, which is why it is 

called EB–5, in 1990. Investors have to invest in a U.S. company 

and create or save 10 jobs for U.S. workers to be able to get a green 

card. They have to invest at least $500,000 in a rural or high unemployment area. 

To encourage immigration through the EB–5 program, Congress 

set up a pilot program in 1992 that sets aside 3,000 of the 10,000 

EB–5 green cards each year for people who invest in so-called regional centers. That part of the EB–5 program is very successful. 

The USCIS estimates that 91 percent of all people who get EB–5 

green cards do so through regional centers, not in their own companies. 

As the USCIS has just testified, there are 60 regional centers 

that are approved and 40 more that are pending. So within a year 

from now, there will be 100 regional centers around the country 

stimulating our economy. 

7 

Second, the economic impact of the EB–5 program. As Senator 

Sessions has already pointed out, in 2003, the GAO reported that 

the EB–5 program has been underutilized. Nevertheless, even 

though it has not been used very much, it still had managed to 

stimulate $1 billion of investments in the United States. That number has significantly increased in the last 5 years since that report. 

My written testimony includes several examples of current 

projects that regional centers are doing around the country. Just 

those examples alone will create tens of thousands of jobs for U.S. 

workers in the next few years. 

These examples illustrate that although the EB–5 program is 

small in terms of the numbers of people coming to the United 

States, it packs a powerful economic punch. If all 10,000 EB–5 

green cards were used each year, that would be $5 billion that 

would be invested in the U.S. economy each year. 

Yet, there is a lot more beneficial impact to the EB–5 program 

besides just the investment by the investors. EB–5 investors also 

buy houses here. They send their children to private universities 

here. They pay taxes here. They invest in the stock market. They 

make other investments. For example, I know one person who is 

bringing $15 million of his family wealth to the United States as 

an EB–5 investor. 

EB–5 investments also fuel large projects that otherwise would 

not get off the ground. For example, one regional center in the District of Columbia is poised to prime $1 billion worth of real estate 

investments just here in the local economy. All these projects will 

produce thousands of jobs at no expense to the U.S. taxpayer. 

Congress and the immigration agency should view the EB–5 program really as an economic stimulus tool, not primarily as an immigration program. 

Next, I want to talk about some problems with the current EB– 

5 program. First, as the other witnesses have pointed out, we need 

to make the EB–5 program permanent. The lack of permanency deters investors from investing in the United States. They are not 

sure whether they are going to be able to keep their green card if 

the program goes away. 

I thank Senator Sessions and Senator Leahy for their leadership 

in trying to make sure that we have a permanent extension and 

I hope that a permanent extension is included in the final DHS appropriations bill. 

Second, USCIS should process EB–5 cases more quickly. As Mr. 

Kruszka has already pointed out, EB–5 processing times have improved recently, and I thank him for that. But they are still erratic. 

One investor in a regional center may have his project approved 

in 2 months, while another investor in the exact same project may 

have to wait 6 months. This delays money getting to the project 

when it is needed. 

The USCIS should allow immigrant investors to pay an additional fee to get their cases processed more quickly. When they are 

investing $500,000 to get a green card, they are happy to pay another $1,000 or $2,000 to get their green card more quickly. 

Next, the USCIS should provide greater clarity on key issues. 

EB–5 regional centers are concerned that there is not a lot of clarity in the EB–5 process. Although the USCIS is working hard to 

8 

provide more clarity, there are still a number of issues that remain 

unresolved. 

For example, even after the USCIS approves a regional center’s 

job creation methodology as part of the regional center petition 

process, the agency nevertheless often issues requests for evidence 

to individual investors who are investing in that regional center 

questioning that same methodology. 

USCIS should give regional centers the option to have their new 

projects in an already approved regional center an opportunity to 

sit down with the USCIS to go over the project and resolve projectgeneral issues so that they can be resolved and out of the way before the first investor actually invests in that project. This would 

make EB–5 processing quicker and provide more certainty. 

Next, the USCIS or Congress should resolve certain ambiguities 

in what we mean by rural or high unemployment. The immigration 

statute defines a targeted employment area as either an area that 

has an unemployment rate that is 150 percent of the national unemployment rate or is rural. 

But a high unemployment rate may change over time and that 

can hurt large projects that take more than 1 year to try to get investors to go into that project. The USCIS or Congress should 

specify that if a project qualifies as high unemployment when it 

starts, it should be grandfathered as high unemployment throughout the project, until the last investor has invested in that project. 

Lastly, the U.S. Government should promote the EB–5 program. 

It does little good to have a program if foreign investors do not 

know about it. The USCIS should work with the Department of 

Commerce to promote the EB–5 program overseas. 

Thank you very much for your time and I look forward to your 

questions. 

[The prepared statement of Mr. Yale-Loehr appears as a submission for the record.] 

Chairman LEAHY. Thank you very much. Our next witness is Bill 

Stenger, William Stenger, whom I know well, along with his establishment. Many times, we have worked together on EB–5 matters, 

traveling abroad and educating investors about opportunities in the 

United States. He is currently the president and chief executive officer and co-owner of the Jay Peak Resort in Jay, Vermont. 

He has been chairman of the Vermont Ski Area Association for 

the past several years, was chairman of the Vermont Travel Council from 1998 to 2007. He was instrumental in creating the 

Vermont Regional Center. 

Looking in the Caledonian-Record, which is an area newspaper, 

yesterday, he was speaking about designing biotech jobs. He is 

quoted as saying Jay Peak is one of the most successful EB–5 developments in the country. 

I am not saying anything different than I haven not said before, 

but I agree with that. Please go ahead. 

STATEMENT OF WILLIAM J. STENGER, PRESIDENT, JAY PEAK 

RESORT, JAY, VERMONT 

Mr. STENGER. Mr. Chairman, Senator Sessions, Senator 

Franken, it is a pleasure to be with you today and I am pleased 

to share with you my perspective of our EB–5 Regional Center ProVerDate Nov 24 2008 08:50 Feb 02, 2010 Jkt 054559 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54559.TXT SJUD1 PsN: CMORC
9 

gram and how it has affected my employees, my community, and 

the State of Vermont. 

My company, Jay Peak, was founded in 1955 as a winter-only ski 

resort. We are located three miles from the Canadian border. Mr. 

Chairman, as you said in your opening remarks, it is the Northeast 

Kingdom, a term that former U.S. Senator George Aiken coined 

many, many years ago as one of the beautiful parts of Vermont. 

Jay Peak is one of the most significant employers in Orleans 

County, a place of great rural agricultural character, beautiful 

mountains and streams, but it is also the home of the most significant poverty and economic challenge of any region in the State. 

Every socioeconomic indicator that we measure is worst in our 

county. Unemployment, drug abuse, spousal abuse, child issues are 

most serious there, and it is all because of economic challenge. 

However, despite these issues and the most profound economic 

issues that we have seen in generations in Vermont and the nation, 

I am very optimistic about the future of our community and its citizens. 

We are seeing at our facilities the significant creation of the biggest positive life-changer a person needs—a job, a job that will sustain them and their families with benefits and a future that inspires and rewards their economic and human spirit. 

We are seeing this employment creation at Jay Peak and our 

surrounding communities in this terribly troubled economy solely 

because of the EB–5 foreign investor program. In today’s economy, 

what is strangling the small business community in Vermont and 

nationally is the lack of access to capital. Affordable capital is almost nonexistent in this marketplace. 

However, through the EB–5 regional center pilot program, at Jay 

Peak, we are well on our way to raising $100 million of equity capital. This capital will help us build year-round facilities that we 

desperately need in order to be competitive, but, also, it helps us 

create full-time opportunities for so many citizens throughout the 

northeastern part of Vermont, where we have the highest unemployment communities. 

Senator Franken, you mentioned that this is a win-win program. 

It certainly is. It is a win for Jay Peak because we can build the 

things we need. It is a win for the investor because they get to 

come to this country and find a new life. It is a win for the government because we are creating tons of jobs in our whole area. So it 

is truly a win-win-win situation. 

I have personally met almost every investor that is participating 

in the Jay Peak program. They are a group of wonderful people. 

I can tell you that their equity investment is changing our region 

in a profound and positive way and once in the United States, they 

will continue to do so, being contributors to their communities and 

continuing to invest in their daily lives. 

Without the EB–5 source of affordable capital, none of this significant economic growth would be taking place in Jay Peak or in 

our region of the United States. I have had the opportunity to travel around the world, visiting various countries in promotion of Jay 

Peak’s program and I have had the opportunity to meet other business opportunities. 

10 

There are many, many small business opportunities in Vermont 

that can benefit from the EB–5 program. I met Alex Choi in Korea 

a couple of years ago and we are now working together on bringing 

a biotech research, development and manufacturing facility to the 

northern tier of Vermont, something that you would have thought 

a few years ago would be an impossibility. But it is a real possibility now and it is a tangible thing that we are working on right 

away. 

Steve Yale-Loehr made some important points and I would like 

to emphasize one, and, of course, it is the permanency of the program. Mr. Chairman, I compliment you for the leadership and Senator Sessions, as well, for supporting the permanent aspect of this 

program. 

Without that, programs will not be able to plan and investors 

will not be able to consider their futures correctly and, frankly, CIS 

will not be able to really address the issues on a continuous basis. 

If this program is made permanent, the projects will be better. 

They will be better planned. The investors will know how to plan 

their lives and focus on a program that they know can work, and 

CIS will be able to better plan its future from a staffing level and 

an administrative level. 

So permanency is vitally important in this. A 3-year extension 

and a 5-year extension, that would help, but permanency is the answer to the success in the future. 

In conclusion, Mr. Chairman, distinguished members of the Committee, this country needs all the equity investment it can get right 

now. The EB–5 program is a wonderful example of an economic 

stimulus that is tax-free, not a burden to anyone, and has nothing 

but good benefits for all involved. 

I thank you very much for giving me the opportunity to be with 

you today. Thank you. 

[The prepared statement of Mr. Stenger appears as a submission 

for the record.] 

Chairman LEAHY. Well, thank you. Thank you for coming down. 

You have come down and helped before. You mentioned Senator 

Sessions’ support. I cannot emphasize enough that in passing the 

extension on the Senate, it was essential that Senator Sessions was 

involved and was supportive of that, because it was as an amendment to a bill of his. 

So I do want to applaud him on that. It was a bipartisan effort 

and we just want to now make sure we get it through both parties. 

Michael Dougherty, do you pronounce it Dougherty? 

Mr. DOUGHERTY. Either way is fine, Senator, Dougherty, Dougherty, it works. 

Chairman LEAHY. Which do you prefer? 

Mr. DOUGHERTY. I do Dougherty. 

Chairman LEAHY. I have found, when I go to Ireland, that Leahy 

is pronounced about four different ways, depending upon where it 

is. He is the director of Immigration Control for Raytheon Homeland Security. Until recently, Mr. Dougherty served as the Ombudsman of U.S. Citizenship and Immigration Services. 

Of course, all of us on the Committee know him because he used 

to be counsel to Senator Kyl and what was then called the Subcommittee on Terrorism, Technology and Homeland Security, if I 

11 

am correct. So we welcome you back. It is good to see you again. 

Thank you for joining us. 

STATEMENT OF MICHAEL DOUGHERTY, FORMER 

OMBUDSMAN, U.S. CITIZENSHIP AND IMMIGRATION SERVICES 

Mr. DOUGHERTY. Thank you. Chairman Leahy, Ranking Member 

Sessions, Senator Franken, it is a pleasure to be with you. I will 

clarify for you a little bit what the Ombudsman’s office does. Congress created that office within the Homeland Security Act in order 

to look into U.S. Citizenship and Immigration Services and to determine where the problem areas were and to suggest solutions 

and make formal recommendations to USCIS, which would then be 

transmitted to Congress in an annual report. 

The Ombudsman’s office has recently done that. On June 30, the 

office gave a report to Congress that illuminated much of the work 

that it had done in the prior year and suggested new activities that 

USCIS could look into to improve benefits. 

I am not appearing today as a Raytheon employee. I am currently working with Raytheon, but my testimony is limited to my 

role as a former Ombudsman and I should not be regarded as expressing the views or opinions of the Raytheon Company, affiliates 

or employees. 

I respectfully request that the Ombudsman’s EB–5 report from 

March of 2009 and USCIS’ response be included in the record. 

Chairman LEAHY. Without objection. 

[The information appears as a submission for the record.] 

Mr. DOUGHERTY. Thank you. One of the things that I learned 

when I was the Ombudsman is that USCIS is at its very best when 

it directly communicates with people. This includes individuals who 

are trying to come to the United States and obtain lawful permanent residence. 

In this perspective, within the regional center program, it is 

going to be the ability to reach out to stakeholders and to explain 

to them clearly what the rules are. We need clear rulemaking to 

come out of USCIS to benefit the program, and USCIS should 

make every effort to engage the people who are putting significant 

amounts of money at risk in the EB–5 program to engage in that 

type of dialogue. 

Folks who are putting $500,000 down would probably benefit 

from engaging the agency ahead of actually filing their petition. I 

think it would be good for the California Service Center to 

proactively engage those people so that they can understand what 

their plans are, how the financing is going to occur, and to eliminate doubt going into the application itself. 

If USCIS is able to do that, I think it is going to reduce the overall work for USCIS. They will not have to send out requests for evidence to clarify what an application meant. They are not going to 

ask other questions that are going to slow the entire process down 

for both the Department and for the investor. 

I think that is key and one of the things that I pointed out in 

my written testimony was that if you are going to engage in that 

type of communication, you are going to eliminate a lot of wasted 

time and money, both for the government and for the investor. 

12 

The integrity of the program is always going to be protected 

when you have clear, definitive rules that everyone understands. 

USCIS should engage in that type of rulemaking now. 

I understand that USCIS is very taxed with other things that 

they have to do, they have other regulations to write, they have 

mandates coming out of the administration that they have to pursue, but I think now would be a very good time, if the amendment 

is successful, if we get it in the appropriations, that this becomes 

a permanent program, it is going to allow us to do that type of 

rulemaking. Now is the time to do that. 

If folks are going to stake significant amounts of money on coming into the United States, they need to know clearly what the 

rules are. 

Communications from the California Service Center have, in the 

past, been outstanding. I have talked to a lot of folks that are in 

the high end immigration business, trying to get foreign nationals 

of extraordinary ability into the United States, and they had great 

things to say about how California did business back in the day. 

A lot of it, though, had to do with a customer’s ability to pick up 

the telephone and to make a call and talk to some live person who 

has got subject matter expertise. I think that is the best way for 

an agency like USCIS to operate. I know that poses operational 

challenges for USCIS, but at the same time, I think it is a good 

way to do business. 

In making these comments, I am aware that USCIS does a significant amount of work with customer outreach. Their customer 

service, I think, is outstanding. If they can just do more of it, it will 

benefit everyone. 

One of the things that was observed by the Government 

Accountibility Office is that qualifying a person for EB–5 status is 

one of the most complicated subspecialties in immigration, because 

a sophisticated knowledge of corporate tax, investment and immigration law are required. 

It is a complex area. It is complex for people to file these applications. It is also very complex to adjudicate them. The better your 

training is for your USCIS adjudications officers, the faster they 

are going to be able to work, with greater accuracy, to protect the 

integrity of the entire process. 

If USCIS is going to rely on modeling to prove indirect job creation, USCIS employees should actually be trained in how models 

are put together. 

Business modeling is very important. It is a growing area. It 

helps you avoid mistakes. It helps you to predict effects. If USCIS 

is able to put a modeling curriculum together for those adjudicators, that will benefit everybody in the long run. 

Thanks again for the opportunity to testify today. 

[The prepared statement of Mr. Dougherty appears as a submission for the record.] 

Chairman LEAHY. Thank you very much. Senator Sessions and 

I were just commenting here. We both agree, if it is going to work, 

the need is there to make it permanent. If I am an investor in another country, I am not about to put my money in here if I think 

it may get yanked out. 

13 

I think it will be permanent, but if you are the one writing the 

checks, you may want more than that to go on. The United States 

is a great place to invest, but they may look at our neighbor to the 

north as a place to invest. I think we have to make it permanent 

if we want it to work, and most of us want it to work. That is a 

bipartisan feeling. 

Ron Drinkard is the director of the Alabama Center for Foreign 

Investment. That was created under the EB–5 employment creation visa program. He has over 34 years of experience in economic 

development and banking; served both as vice president for Industrial Development AmSouth Bank and for Southwest BankWachovia. 

Glad to have you here and I will yield to Senator Sessions, who 

has some comments. 

Senator SESSIONS. Thank you. Mr. Drinkard, we are glad that 

you are here. I know you have been very active an advocate for this 

program. You know it well. You know how it plays out in the real 

world. We are glad you are here, glad to have a Troy University 

graduate, even though you got a banking degree from LSU. We will 

forgive you for that. 

I look forward to your testimony. You have got some suggestions 

for us and I look forward to those. 

STATEMENT OF RON DRINKARD, DIRECTOR, ALABAMA 

CENTER FOR FOREIGN INVESTMENT 

Mr. DRINKARD. Thank you, Senator Sessions. Mr. Chairman 

stepped out, but we appreciate the opportunity to be here. Senator 

Franken, I am a fan of yours in your prior life and we do appreciate the interest that you are expressing in the program by virtue 

of your presence here today. 

As the Chairman mentioned, I am director of the Alabama Center for Foreign Investment, which is a regional center covering the 

entire State of Alabama. Senator Sessions, in the Chairman’s absence, if you do not mind, I may deviate a little bit from the testimony I submitted and take maybe a less rigid approach in my comments. 

Senator SESSIONS. That is fine. I am sure the Chairman will 

make your remarks a part of the record, and I think that would 

be appropriate. 

Mr. DRINKARD. Thank you. 

Senator SESSIONS. Tell us what you think. 

Mr. DRINKARD. My partner, Boyd Campbell, is an immigration 

lawyer with 20 years experience. I have 34 years of experience in 

banking, economic development, and governmental relations. Between the two of us, we really thought that we could solve any 

problem that we ran into regarding the EB–5 program. 

Not only were we wrong, but 2 years down the road, we are still 

learning something knew and important about this program virtually every week. It was pointed out by Mr. Dougherty, next to 

me, he mentioned difficulties and complex. That is so very, very 

true. 

Mr. Kruszka pointed out the need for additional resources and 

more training; also, very, very important. The two fit together almost perfectly. Let me say this about Mr. Kruszka, too. We have 

14 

had a tremendous working relationship with Mr. Kruszka and his 

colleagues, Kevin Cummings and Joe Whalen. We could not ask for 

more support from these individuals than we have received. 

In my opinion, we have got the best people we could have in 

those positions, but, unfortunately, there are some situations 

where, in my opinion, their hands may be tied where they may not 

be able to do some of those things that they would like to do to 

make this program more user-friendly, and I think the key to it is 

making it more user-friendly. 

There is a tremendous misconception out there. There is a perception that this program is immigration related. It is really not. 

This is an economic development program. It virtually has nothing 

to do with immigration. It may be this much immigration, but it 

is this much economic development. 

In addition to that, we have the greatest opportunity that we 

could ever have to play some role in the recovery of this nation’s 

economy and the best part of it all, it does not affect our tax dollars. Our taxpayers do not have to spend one penny on this. 

We are currently spending tax dollars doing many things that 

this program can do and can do very effectively at no cost. But 

there are some things that we could consider that would perhaps 

make it easier to do this. You have heard mentioned permanency 

of the program. Of course, it is difficult for anyone to consider getting into anything unless they know it is going to last. We do not 

get on a plane headed somewhere unless we think it has got 

enough fuel in it to get to the destination. Same thing with these 

investors. 

The preapproval process, if we use that analogy with the plane, 

yesterday, when I was going through Atlanta, it occurred to me 

that the experience there was very similar to this program. When 

I go to the first checkpoint, I have to show a driver’s license or a 

passport. Those are preapproved things that our government has 

provided, which gets me past that. 

If we can have preapproved projects, we get past that first point 

quickly and it is going to save a lot of time and a lot of money on 

the part of the government regarding these adjudicators at the 

California Service Center. If that project can be approved, that proposal, that PPM, does not have to be reviewed in every case. 

They can look it and they can see it has been approved and they 

can spend their time doing on something very, very important, 

checking out that individual. Just like going through that airport, 

none of us wants to get on a plane with someone that could be 

harmful to us or the other passengers. Same with this program. 

None of us want anyone involved in this program that is going 

to do any harm to U.S. citizens. Look at it like this. When your 

baggage goes through that x-ray machine like mine did yesterday, 

they took a pretty close look at it and if there is anything in there 

suspicious, they are going to pull me aside and take a look at it. 

The same thing will happen in this program. If there is anything 

in that documentation that throws up a yellow flag, they are going 

to stop them. They are going to take a look at it. None of us involved in this program have anything more on our mind than security and making sure this program works. 

15 

Now, I mentioned, in making it work, the permanency of the program. There are some other things, and let me also say this. There 

are a lot of opinions and things that are discussed here today from 

those of us representing very, very different roles in the EB–5 program, but every issue is uniform and it is across the board. We all 

are experiencing them. 

As most of you know, this program has had some problems—had 

problems back in the 1990s. It had a terrible reputation. There 

were some people that got involved and we had a lot of problems 

as a result of that. 

What we have got to do is make sure that we do not allow those 

problems to happen again. Not only do we know to overcome that, 

we have got to be extremely careful not to let it happen again. 

It would be my recommendation that we have something out 

there in place to make certain that these regional centers, myself 

included, obviously, have the ability and the knowledge to run that 

center properly and stay within the guidelines and the regulatory 

environment of USCIS, extremely important. 

I already mentioned project preapproval, something that we 

need. You have heard some of the individuals mention that we 

need a longer period of time for the creation of these employees, of 

this job creation. As you know, we have to create a minimum of 10 

jobs, direct, indirect and induced, for each of these investors. 

There are projects, large and small, where this is virtually impossible. There is a planning stage. There are so many things that 

have to be done. There are environmental studies in many cases 

that could take up to a year on some of these sites. 

Chairman LEAHY. In fact, on that, let me pick up on that, because I have discussed this with Mr. Stenger and what you are 

talking about is for an investor to convert a 2-year conditional 

green card to a traditional green card, he or she typically has to 

show that they created 10 new jobs. 

In Alabama, as you pointed out, there could be restrictions, hurdles you have to go through. In Vermont, along with the permitting 

factor, we can have severe weather. It can be 20 and 30 below zero 

during construction season. 

So these delays can happen, notwithstanding good faith. Would 

you talk to that, Bill? I am thinking the challenges of the weather 

and other requirements, what Mr. Drinkard was talking about, too. 

How do we get around some of those? You do not want an open 

ended process, but how do you get around it within that 2-year requirement? Are there other things we should be doing? 

Mr. STENGER. Well, I would support what Ron said about the 

planning that has to go on in a project. The better a project is 

planned, the better its life is going to be. So often in business, you 

see projects that are too quickly planned. People do not think about 

the details that go with the project and failure is at the other end. 

So proper planning and in our State and I think throughout the 

country, environmental permitting at the State and Federal level 

are substantial oftentimes. To conceive an idea, do the permitting, 

do the planning, build the project, hire the people, grow your business and meet some job level within a 24-month period, in today’s 

world, I would say it is impossible, even for the smallest of businesses, to do it correctly. 

16 

We are talking about businesses that are not insignificant. They 

are small businesses in most cases, but they have to do the same 

planning and work that others do. 

Now, the reality of the regional center pilot program regulations, 

as they exist today, is that there is no obligation to prove job creation after 24 months. In fact of law, there is no obligation to do 

that within a 24-month period. 

What you do need to do is you need to do what you said you were 

going to do at the beginning. When we submit our programs to 

CIS, they look at them, they give us advice, they approve. In a 

sense, they give us direction. We build what we say we are going 

to build. We create what we say we are going to create and if we 

do that, those jobs are going to occur, because we have done the 

economic modeling in advance. 

I think if there is an area that we can all work together, it is 

probably on making sure the economic modeling is something we 

are confident about and feel good about. But if we do that, the job 

creation will be there. 

In our case, we are a big employer, in a sense, but we are a small 

employer in Vermont. But the indirect jobs of these projects are 

where so much emphasis really lies, and it is not easy to look at 

somebody along the road that is driving past you and say, ‘‘That 

is a job I created.’’ 

The indirect job creation of these EB–5 programs is profound. So 

I would say that within a 24-month period, very difficult to take 

a project from an idea to the employment levels that may be expected. It may take longer. The weather may affect you, the permitting may affect you, and the economy may affect you. 

So those are my thoughts, Mr. Chairman. 

Chairman LEAHY. Let me ask Mr. Kruszka about that, because 

we have been talking about the fact that a large number of the 

visas authorized are never used, but we know that there is substantial growth in popularity for the regional center program. 

What is the biggest impediment to growing this program? I 

would like to see these visas used. What tools can we give you from 

the Congress to make it possible to move and create them? Do we 

have to look at the 2 years? What is your analysis? 

Mr. KRUSZKA. I think the biggest impediment right now is the 

fact that the program is not permanent and that has sunsetted several times. That has created an operational problem for us, an 

unease in the stakeholder community, and it is hard to attract the 

investors that way. 

I hear what Ron Drinkard and Bill Stenger are saying about the 

2-year job creation memo. We set that limit at 2 years and I think 

that if that is an issue for the projects, and I hear that it is, we 

have been hearing it for a while, we think that it would help if 

Congress would actually clarify the language for us, because it 

seemed to be moot on that point. 

Everything else in the immigration realm, you need to remove 

your conditional residence within 2 years and if you are filing within that 2-year period, we expect that you have to follow through 

with your investment, which the investment is one part and the 

other part of it is creating the 10 jobs. I think that causes some 

problems for everyone. 

17 

Chairman LEAHY. Mr. Yale-Loehr talked about business plans 

and the preapproval by the agency. The approval process for a 

given project would be, as I understand, separate than the immigrant investor petition process. 

Did I state your position correctly? 

Mr. YALE-LOEHR. Correct. 

Chairman LEAHY. What kind of benefits do you see coming from 

that? I am thinking working from the stakeholder side of the equation. Does it result in USCIS adjudicating quicker? 

Mr. YALE-LOEHR. I think, as the other witnesses have pointed 

out, it makes everything more efficient. If you have more talking, 

more dialog between the stakeholders and USCIS, then you can resolve problems up front. Right now, the regional center gets approved as a general regional center, but they do not necessarily 

have a project in mind when they are approved. 

So then they put together a project. They look at the regulations. 

They try to anticipate what they think is going to work, but they 

do not have a chance to dialog with USCIS in advance. Instead, the 

first investor in that project is sort of the guinea pig as to whether 

the project itself meets the EB–5 program requirements. 

That is an inefficient use of the regional center’s time of USCIS’ 

time. If you can have dialog up front and say, ‘‘OK, this is what 

we want to do. We want to do this building in the District of Columbia. We want to do this ski resort in Vermont, but we think we 

want to do it this way. Is this OK,’’ and USCIS says, ‘‘Well, you 

ought to change something along these lines,’’ the regional center 

is happy to change them up front. 

They want to make it work. They are partners with the USCIS. 

If you get that taken care of up front, then the USCIS can spend 

its time, as Mr. Drinkard pointed out, looking at the individual investor and that he or she earned his money correctly. 

So it makes everything more efficient if you have more dialog up 

front and the preapproval process is one way to do that. 

Chairman LEAHY. Thank you very much. I will submit a couple 

questions for the record. 

Senator Sessions. 

Senator SESSIONS. Thank you. Mr. Drinkard, would you share for 

us the kind of inquiries you get and the nature of the investors and 

what their motivations might be and how this program ideally 

should work? 

Mr. DRINKARD. Yes, sir. Thank you. Again, I will start out by 

saying it is an economic development program. In Alabama, we 

have numerous job clusters, which includes everything from agriculture, high technology, light manufacturing, heavy manufacturing, schools, resort amenities, hotels, golf courses, even cruise 

ship lines, virtually anything that can create jobs, employ people. 

So we have a very wide variety. As a result of that, we look at 

numerous projects that would like to be considered for EB–5 funding. But the big problem or one of the biggest problems we have 

is these people, as has been pointed out and forgive me for just reiterating it, but these people, in so many cases, are hesitant to get 

involved if this thing is not going to last. 

For the past year or so, we have been put on a CR, continuing 

resolution, for just a few months. Prior to that, we had been considVerDate Nov 24 2008 08:50 Feb 02, 2010 Jkt 054559 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54559.TXT SJUD1 PsN: CMORC
18 

ered 3 to 5 years. This is something that needs to be made permanent in order for us to get more attention from these people. 

Senator SESSIONS. Just to get a little more background, what is 

it that attracts, say, an investor to this program? Why would they 

like it? 

Mr. DRINKARD. What attracts the best, our experience has been, 

first and foremost, is the green card. The second is the return of 

their initial investment at the end of a 5-year period, unless it is 

an equity investment, of which it would be a different term. 

Third, any return on that investment during that time, those 

funds are invested in a regional center project. 

Senator SESSIONS. So these provide incentives to make people be 

interested in the program. Mr. Kruszka, does it have any impact 

on a major CEO of a company, international corporation, that 

builds a plan in Alabama or any state? Can they access the benefits of the immigration provisions? 

Mr. KRUSZKA. They can. Currently, though, it is difficult to do a 

large project the way the program is set up. 

Senator SESSIONS. I just know an example of a major international corporation and the individual wanted to be an American 

citizen and was hiring 4,000 Americans, Alabamians, to work in his 

plant and it took a while to get it. 

So this necessarily would be the vehicle that individual would 

use to become an American—green card, permanent resident, perhaps a citizen later. 

Mr. KRUSZKA. Yes. They could do that. 

Senator SESSIONS. They could use this program. 

Mr. KRUSZKA. Yes, they could. 

Senator SESSIONS. Mr. Yale-Loehr, did you have any comment on 

that, on whether that is a wise policy? 

Mr. YALE-LOEHR. It is a wise policy. If the CEO is bringing that 

many jobs to Alabama, then certainly they should be able to get a 

green card and the EB–5 program is one way to do that. 

But as you have seen from the various witness testimonies, it is 

not easy for anyone to get an EB–5 visa right now and the question 

is how can EB–5 regional center stakeholders work with the agency 

and with you to try to make the program achieve its true potential. 

Senator SESSIONS. You do not seem to count in your numbers— I know one plant in Alabama recently, a few years, was a $1 billion 

investment, 4,000 employees at the main automobile plant. 

You are not counting those as part of this program, obviously. 

Your numbers would be higher, I think, if you were counting that 

kind of foreign investment. 

Mr. KRUSZKA. Well, it would have to be approved and it would 

have to—I am not sure which automobile plant you are talking 

about, but the investors would have to come forward and the way 

the program is set up right now, they would probably have to stagger the investors to be able to create that many jobs in the timeframe that is currently set up in the program. 

Senator SESSIONS. Mr. Drinkard, do you have a comment? 

Mr. DRINKARD. Senator Sessions, I agree with those comments. 

It is a little more complicated in that in a project that large, you 

are going to have a minimum of a 2-year construction period. Now, 

it gets a little fuzzy on how you include construction workers. 

19 

It is my understanding, and Mr. Kruszka can address this much 

better than me, but there is a possibility to include indirect and induced jobs that are created by those temporary construction workers. 

There is also the possibility, if those construction workers have 

been there or if those positions have been there for 2 years or more, 

that those jobs can be included. For instance, if you have got a very 

large manufacturing facility that has 2,000 construction workers 2 

years or more, then it gets a little hazy whether you count just 

those workers or whether you count those workers and the induced 

and indirect with them. 

Those could help get the funds into the program quicker, but at 

the same time, take into consideration that these—— 

Senator SESSIONS. But apparently, when they make their decision, they do not access this program. 

Mr. DRINKARD. They cannot get the funds, Senator. That is just 

it. The funds will go into an escrow account and until that I–526 

petition is approved, the funds do not break escrow. 

So these petitions could be approved at different times, which 

could hold up those funds for that project. That company may be 

very hesitant and unable to depend on those funds, not knowing 

when they are going to get them. 

Senator SESSIONS. Mr. Kruszka, some critics have said that this 

program amounts to the selling of a national birth right or could 

allow people to abuse the system, have governmental moneys from 

foreign countries come in for spying or other intelligence interests 

that they might have. 

Do you have any thought about that? I do not believe that is a 

legitimate complaint, but what would you say to those complaints? 

Mr. KRUSZKA. We have heard those complaints before, Mr. Senator, but we have not been able to verify any of that being an issue 

in the program. We do verify where the money is coming from and 

that is an extensive process between the investor in the petitioning 

process, and we have not had a problem. I do not think that is an 

issue with this program. 

Senator SESSIONS. Do you have a fraud rate and is there anything that can be done to reduce any fraud that might occur? 

Mr. KRUSZKA. We do not have the same fraud that was mentioned in the early 1990s that somebody mentioned earlier today 

that we are aware of. We are looking for fraud. We do have fraud 

units in the center to review fraud, if fraud is apparent. But I am 

not aware of any large-scale fraud scheme in any of the EB–5 investment schemes. 

Senator SESSIONS. Mr. Drinkard, you note that we need to make 

the regional center move from pilot program to permanent program. I would just note that I am glad Senator Leahy is going to 

be on the conference committee and maybe he can—that is really 

critical. 

We have got to have some other folks come along on the House 

side to get this thing done. Mr. Chairman, I am glad you are there. 

Chairman LEAHY. Senator Franken. 

Senator FRANKEN. Thank you, Mr. Chairman. I would like to 

thank both you and the Ranking Member, Senator Sessions, for encouraging making this program permanent. I want to learn a little 

20 

bit about it. Basically, I understand there are 24 states that have 

regional centers and Minnesota is not one of them. Iowa, South Dakota and Wisconsin do. 

So basically, I want to kind of know how to get in on this, because I do believe it is a win-win. How does an EB–5 regional center start? Does it start with a project? For example, how did yours 

start, Mr. Stenger? 

Mr. STENGER. Actually, Senator, the Chairman and the then 

Governor of Vermont, Howard Dean, in 1997, we collaborated on a 

project for Jay Peak, but when we got to the point of determining 

what should the regional center be, ‘‘the Secretary of the Vermont 

Agency of Commerce and Community Development, a fellow by the 

name of William Shouldice, called me and he said,’’ ‘‘Do you see 

any reason why the whole state should not be a regional center? ’’ 

I said, ‘‘I do not see any reason why it should not be.’’ The entire 

State of Vermont is a regional center. Now, I am not here to give 

you advice, but that is one point I might suggest. 

Senator FRANKEN. So it started with you and the Senator and 

the Governor saying, ‘‘Let us do this.’’ 

Mr. STENGER. Let us do this and, in our case, we are a statewide 

regional center and one of the few. 

Senator FRANKEN. How did you attract your first investment? 

Mr. STENGER. We put together a project that would be a job creator, that would help us create and develop services that we did 

not have. We put together a marketing plan. We started to reach 

out to places in the world where we knew people were interested 

in coming to the United States. 

Our first market was the United Kingdom and I would say in our 

first project, about 60 percent of our investors are from the U.K. 

Many of them, frankly, just want to move to the United States 

where it is warmer, parts of the United States that are warmer. 

Senator FRANKEN. So I take it they can live not in the regional 

center itself. 

Mr. STENGER. They can live and work anywhere in the United 

States they wish. 

Senator FRANKEN. Hence, a warmer place. 

Mr. STENGER. The investment goes into our job-creating program 

and I recommend that you work with your state economic development department and you would do a lot worse by mirroring 

Vermont. 

Senator FRANKEN. Professor Yale-Loehr. 

Mr. YALE-LOEHR. I actually had a phone conversation with somebody from the Minnesota Economic Development Agency about 2 

months ago inquiring about setting up a regional center in Minnesota. So I can put you in touch with him and we can see how 

we can get going a regional center in Minnesota. 

Senator FRANKEN. Obviously, you are the kind of person, Mr. 

Stenger, who knows how to find these people. When you said we 

started looking where we knew there were people who wanted to 

come to America and had money to invest, how do you know that? 

How did you know that? 

Mr. STENGER. Well, Senator Leahy was referring to Canada. 

There are immigration seminars around the world where Canada, 

New Zealand and Australia collaborate together and I went to LonVerDate Nov 24 2008 08:50 Feb 02, 2010 Jkt 054559 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54559.TXT SJUD1 PsN: CMORC
21 

don to observe one of these seminars and I was amazed at the 

thousands of British citizens who attended this seminar to learn 

about immigrating to Canada, New Zealand and Australia. 

It is a process. We did not go from knowing everything about 

where the market is to being there. It will take time. But believe 

me, Canada, New Zealand and Australia are in the business of 

finding capital and they are out there. 

Senator FRANKEN. And what is a regional center physically? Is 

it an office within the state’s economic development office? What is 

it? 

Mr. STENGER. In our case, the Department of Commerce in Montpelier, our capital, they are responsible for overseeing the regional 

center and they are our go-to sponsor, so to speak. When we have 

a project, whether it is a biotech research idea or a hotel or some 

other small business, you would go to the Department of Commerce, run your ideas past them. 

If they feel it is consistent with what the spirit of the regional 

center is all about, they may communicate with CIS and let them 

know that this is a bona fide project in their eyes and then you can 

move forward. 

Senator FRANKEN. Thank you. 

Mr. STENGER. Thank you. 

Chairman LEAHY. I should note, when you mentioned the weather, Senator Franken and I are not concerned about the weather. 

Senator FRANKEN. We have beautiful summers, lovely falls, and 

wonderful springs and Minnesotans have learned to adapt to winter by wearing warm clothes. 

Chairman LEAHY. A lot of warm clothes. 

Senator FRANKEN. Well, not necessarily. There has been a lot of 

technology in Thinsulate and other things that make Minnesota an 

incredible place to live and do business. 

Chairman LEAHY. Let us ski Vermont. 

Senator FRANKEN. We do not have mountains. We have other 

things. We have lakes, beautiful lakes, fish. 

Chairman LEAHY. This could degenerate beyond one evening. 

Senator Sessions, unless you have further questions, I am going to 

put—I will close up. I do have submissions from both Mr. Stenger 

and Mr. Yale-Loehr. Mr. Stenger has asked that several letters 

from contractors and other businesses around Vermont be included, 

and they will be part of the record. 

[The letters appear as a submission for the record.] 

Chairman LEAHY. Mr. Yale-Loehr has asked that several letters 

from regional centers across the country be placed in the record, 

and they will be. 

[The letters appear as a submission for the record.] 

Senator SESSIONS. I would just note and observe that Canada, 

New Zealand and Australia have thought a lot about immigration 

policy and a more merit-based point system is what they use and 

they are, wisely, I think, looking for investors who will create jobs 

in their country, and we can do better about that. 

Mr. Yale-Loehr, do you think that our program is competitive 

with, say, the Canada program that has been ongoing for quite a 

few years? I think they are very happy with it. Just how would you 

compare the two programs? 

22 

Mr. YALE-LOEHR. Well, I know the EB–5 program in the United 

States has not raised nearly as much capital as in Canada, for example. I am not an expert on the other immigrant investor programs, but I know, in Canada, they raised $6 billion coming into 

Canada in the same time period that we raised $1 billion. 

I think based on the suggestions at this hearing today, there are 

a lot of ways that we can make this program in the United States 

run more effectively and I think that will do a lot to increase the 

number of investors who come to the United States and thereby 

help the EB–5 program achieve its true potential. 

Senator SESSIONS. Thank you. I appreciate the entire panel. I believe you have provided valuable information to us. Thank you very 

much. 

Senator FRANKEN. I just want to thank you all and I will follow 

up with Professor Yale-Loehr on the Minnesota contact. Thank you, 

Mr. Chairman. 

Chairman LEAHY. We are adjourned. 

[Whereupon, at 11:20 a.m., the Committee was adjourned.] 

[Questions and answers and submissions for the record follow.] 

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