Flashback: Biden’s DHS Nominee Tied to China, Visas-for-Sale Swamp Scandal

Greg Nelson, the White House official who hosted the meeting, sketched his job in a White House post:

In August 2010, USCIS rejected the deal. That rejection decision was reversed, in large part, due to Mayorkas.

USCIS eventually approved the deal in September 2011, clearing the way for more than 100 Chinese nationals to receive initial approval for green cards — the first step in a path to U.S. citizenship — in return for investments that ultimately totaled $141 million in the now-bankrupt GreenTech Automotive,

Chinese national Charles Wang founded the company. He made sure to include McAuliffe as company chairman from 2010 to the end of 2012. McAuliffe is no minor figure — he was the chairman of the Democratic National Committee.

A subsequent report by the DHS’s Inspector General released in 2015 concluded that Mayorkas acted inappropriately to secure that reversal by subordinate DHS officials in September 2011.

The career USCIS officials pressured by Mayorkas to reverse course had concluded the GreenTech Automotive EB-5 funding scheme failed to address two key elements required by law: (1) the risk of the investment (2) the level of managerial control exercised by the investors. They also derided the business plan as “pie in the sky.”

The concerns of career USCIS officials proved well-founded. The $141 million in loans from the more than 100 Chinese nationals who received approval for green cards evaporated in a flurry of litigation, the bankruptcy of GreenTech Automotive, a defaulted loan to the State of Mississippi, and the temporary creation of just a handful of jobs for Americans in Mississippi, all of which are now long gone.

Democrats appear to be rushing Mayorkas’ confirmation process before Republicans can get the issue into the media. Press reports indicate that the Senate Homeland Security Committee may vote on his nomination as early as Tuesday morning.

Breitbart News first reported on the details of the GreenTech Automotive saga in August 2013:

[Shortly] after Terry McAuliffe became chairman of GreenTech Automotive in March 2010, a decision by the California regional director of the Department of Homeland Security’s US Citizenship and Immigration Services (USCIS) found that the manner the firm was raising money from investors [through a Regional EB-5 Center GreenTech Automotive controlled called Gulf Coast Management] was “impermissible,” which crippled the company’s ability to solicit funds from foreign investors.

Fundraising had been going well until that time. Under the terms of a 2009 Private Placement Memorandum, GreenTech Automotive obtained $2.5 million from five Chinese national EB-5 investors before McAuliffe became chairman, and an additional $5 million from ten more Chinese national EB-5 investors in McAuliffe’s first four months. With $7.5 million in cash, and prospects of an additional $5 million in loan financing from the state of Mississippi, the financial future for GreenTech Automotive seemed secure.

But when the California regional director of the USCIS determined [in August 2010] that the terms of the 2009 PPM “constituted an impermissible redemption agreement” as defined in the 1990 law that established the EB-5 foreign national investor and immigration program, the USCIS stopped approving the I-526 petitions submitted by foreign nationals who invested in GreenTech’s 2009 PPM, and the pool of Chinese investment that had been flowing into GreenTech’s coffers dried up.

On December 15, 2010, McAuliffe sent a letter to DHS Secretary Janet Napolitano asking her to reverse the August 2010 decision by career USCIS officials to deny the Gulf Coast request to “change nature of investment” and to add Virginia and Tennessee to its area of operations, which originally encompassed Mississippi and Louisiana, according to the 2015 DHS IG’s report.

On February 3, 2011, McAuliffe and Mayorkas met in person, as Breitbart News reported:

According to the New York Times, Secretary of the Department of Homeland Security Janet Napolitano “popped in” to a 2011 meeting between Terry McAuliffe, at the time chairman of GreenTech Automotive, and Alejandro Mayorkas, director of the Department of Homeland Security’s US Citizenship and Immigration Services (USCIS) branch, as the two men were discussing issues related to the issuance of temporary residential visas for foreign national EB-5 investors in McAuliffe’s company.

Five months later, on July 11, 2011, the Administrative Appeals Offices (AAO)–the office in USCIS responsible for appeals “prepared to issue denial Gulf Coast Appeal for three reasons: (1) providing the directors with common stock was an “impermissible redemption,” (2) investors did not have a sufficient managerial role (3) proposal did not entail a single contiguous region,” according to the 2015 DHS IG’s report.

That same day, Mayorkas said he wanted to review the decision.

On July 21, 2011, “Mayorkas chairs internal meeting, indicating he disagrees with AAO draft decision and offers to write the opinion himself,” according to the DHS IG’s report.

Three weeks later, on August 16, 2011, “Mayorkas speaks with senior official, indicating he wants to speak with AAO adjudicator.”

The following week, on August 22, 2011, “Mayorkas speaks with AAO chief, wants final decision revised quickly.”

On September 2, 2011, “AAO issues final decision denying Gulf Coast amendment because it is not geographically contiguous, but rules favorably on management control and investment risk.”

The ruling on management control and investment risk opened the EB-5 from China funding floodgates for GreenTech Automotive to get Chinese investor money through Gulf Coast Management and related entities. Over the next 12 months, from September 1, 2011, to September 1, 2012 — as Breitbart News reported, “Over the next year, according to the New York Times, an additional $25 million from 50 Chinese nationals flowed into the coffers of investment funds whose sole use of proceeds was to provide cash to GreenTech Automotive. By the end of 2013, that funding had grown to $141 million.

Richmond.com reported on the details of GreenTech Automotive’s bankruptcy filing in 2018:

The company shut down its plant in Mississippi last year, and the company has faced a series of lawsuits filed by investors in the company, who have called GreenTech a “scam perpetrated by savvy and politically connected operatives and businessmen” to exploit Chinese investors hoping to come to America.

The bankruptcy filing cites a $7.5 million judgment won by 12 investors and says several similar suits are pending.

According to its bankruptcy filing, GreenTech raised $141.5 million from investors between 2009 and 2013 as part of the EB-5 visa program that offered immigrant investors permanent residency

Mayorkas was confirmed as Deputy Secretary of Homeland Security in a straight party-line vote in 2014 — even though he was under investigation at the time for three EB-5 decisions by the DHS Inspector General (IG).

In 2015, following Mayorkas’ confirmation as Deputy Secretary, the DHS IG released his report that concluded Mayorkas “acted improperly.”:

In a report released Tuesday, the Department of Homeland Security Office of Inspector General looked at three instances in which Alejandro Mayorkas, then-Director of USCIS but currently the Deputy Secretary of the Department of Homeland Security, was alleged to have exerted undue influence on the processing and adjudication of Employment-Based Fifth Preference (EB-5) program benefits.

“The juxtaposition of Mr. Mayorkas’ communication with external stakeholders on specific matters outside the normal procedures, coupled with favorable action that deviated from the regulatory scheme designed to ensure fairness and evenhandedness in adjudicating benefits, created an appearance of favoritism and special access,” the IG’s report reads.

The report looked at various instances of alleged favoritism. It named Senate Democratic Leader Harry Reid (D-NV) and the Las Vegas Regional Center as well as an electric car company on which now-governor of Virginia Terry McAuliffe was a board member and Anthony Rodham — the brother of former Secretary of State Hillary Clinton — was involved.

According to the report in each of the matters it considered, were it not for “Mr. Mayorkas’ intervention, the matter would have been decided differently.”

The IG explained that it began the investigation into Mayorkas’ interventions following a whistle-blower allegation in September 2012. The IG noted that in the course of its investigation an unusually high number of witnesses at different levels of authority, “more than 15.”

“Their allegations were unequivocal: Mr. Mayorkas gave special access and treatment to certain individuals and parties. They told us he created special processes and revised existing policies in the EB-5 program to accommodate specific parties. According to the employees, but for Mr. Mayorkas’ actions, the career staff would have decided these matters differently. Employees felt uncomfortable and pressured to comply with managers’ instructions that appeared to have come from Mr. Mayorkas or those working directly for him,” the report reads.

Overall, the employees charged that Mayorkas’ favoritism was offered to the politically connected.

“Many employees concluded, not unreasonably, that the pressure exerted on them was because the individuals involved were politically connected,” the report reads.

You can read the full report here.

The DHS Secretary at the time, Jeh Johnson, responded to the 2015 DHS IG’s report by stating “I continue to have full confidence in Ali Mayorkas. He is doing an outstanding job as Deputy Secretary. . . I believe there are lessons to be learned from the Inspector General’s report — by Ali, and all of us who are leaders in public service.”

Last week at Senate confirmation hearings, Mayorkas defended his actions while director of USCIS.

Mayorkas, while deputy secretary at DHS, was reported by multiple USCIS staffers for intervening in three specific EB-5 visa cases where foreign investors had been denied visas. In 2015, Obama’s DHS IG John Roth documented the inappropriate actions.

Sen. Rob Portman (R-OH) asked Mayorkas about the IG report, to which the former DHS deputy secretary said it was his responsibility to “fix problems” and that he had intervened in “hundreds of cases” while leading USCIS.

“These weren’t the only three cases I was involved in,” Mayorkas said. “There were dozens and dozens.”

According to Sen. Ron Johnson (R-WI), though, Mayorkas previously told Sen. Chuck Grassley (R-IA) that he had never intervened in visa cases while at USCIS.

“I became involved in a lot of cases …. and I did my job,” Mayorkas told Johnson. “I learned of problems and I fixed them.”

Mayorkas said he learned that he must “better guard against the perception” of favoritism in visa programs where he intervenes in cases on behalf of applicants.

The group White Collar Workers of America, which advocates on behalf of American workers against U.S. job outsourcing, slammed Mayorkas for claiming to have merely fixed problems when asked about the IG report.

Subsequent to his resignation as Deputy Secretary of Homeland Security in 2016, Mayorkas became a partner at the high powered Washington legal firm of Wilmer Hale:

Alejandro Mayorkas is a counselor and litigator for companies facing their most significant and sensitive matters. He has held executive leadership positions at the highest levels of the US government, and he has tried more than 35 cases to a jury. Recognized as one of the “50 Most Influential Minority Lawyers in America” by the National Law Journal, and one of the most influential Latino leaders in the nation by Latino Leaders, Mr. Mayorkas has been one of the country’s most prominent litigators and impactful government leaders in a private sector and public service career spanning more than 30 years.

Mr. Mayorkas has represented corporations in their times of crisis, often involving parallel civil, criminal, and congressional proceedings and subjects ranging from securities enforcement, consumer protection, and environmental regulation to public corruption, cybersecurity, the False Claims Act, and the Foreign Corrupt Practices Act. Building on his experience leading the US Department of Homeland Security’s response to Ebola and Zika, Mr. Mayorkas currently leads WilmerHale’s COVID-19 [Chinese coronavirus] Coronavirus Task Force. . .

Mr. Mayorkas joined WilmerHale in November 2016 and resumed his representation of clients in their most significant and high-stakes litigation, internal investigations, and parallel proceedings. With his diverse experience in both the public and private sectors, Mr. Mayorkas helps companies address crises that span from the courtroom to the halls of Congress and in the public eye.

According to financial disclosure documents filed with the U.S. Office of Government Ethics as part of the review process for his nomination to be head of DHS, Mayorkas was paid $3.3 million last year by WilmerHale. His clients included Uber, the Blackstone Group, Cisco, and Denver Great Hall LLC.