INS insiders profit on immigrant dreams

Cashing in: Former immigration officials siphon millions from a program to entice foreign investors with the promise of green cards.

February 20, 2000|By Walter F. Roche Jr and Gary Cohn | Walter F. Roche Jr and Gary Cohn,SUN STAFF

Give me your tired, your poor,

Your huddled masses yearning to breathe free.

Over more than half a century, 12 million immigrants streamed into America, welcomed by the words of Emma Lazarus engraved at the base of the Statue of Liberty.

But welcoming the tired and poor was hardly on the minds of a small group of former government officials who helped design an immigration program to attract wealthy foreigners who could obtain prized green cards by investing $500,000 to $1 million in U.S. businesses.

The investor visa program was a little-noticed part of the Immigration Reform Act, a sweeping law that reshaped the country's immigration policies.

President George Bush called the law "the most comprehensive reform of our immigration laws in 66 years." It was, he said as he signed the bill into law on Nov. 29, 1990, "good for families, good for business, good for fighting crime and good for America."

While his predictions may yet come true, a review of the decade-old law shows that it has benefited one group not mentioned by the president -- former INS officials and their associates who have pocketed millions in fees from wealthy foreigners willing to invest their savings to join in the American dream.

In the rush to cash in on the law, have left a trail of victims -- from families seeking a new beginning in America to struggling companies needing a promised infusion of cash to keep their workers employed.

Now, many of those families are facing the threat of deportation, while many troubled companies that were promised a boost from immigrant investors have closed their doors, leaving hundreds of workers unemployed.

An investigation by The Sun has found:

* Some of the former INS officials who have profited most from the visa vending business were instrumental either in formulating the program or lobbying for favorable interpretations of the program rules that aided their businesses, at times working with the same INS staff they once directed.

* One of the most active participants in the visa vending has been Gene McNary, INS commissioner from October 1989 to January 1993. By his estimate, after leaving the federal government, McNary acted as the attorney on 200 to 250 applications for the program.* * The immigration act's main sponsor in the House of Representatives, Rep. Bruce A. Morrison of Connecticut, went into business with a California immigration consultant to market the investor visa program within days after his congressional term ended. Morrison's agreement was dated Jan. 22, 1991, the month he left Congress.

* Former officials such as McNary, former INS general counsel Maurice Inman and Diego Asencio, the former U.S. ambassador to Colombia and Brazil, had extraordinary access to and incessantly lobbied former colleagues in the government for preferential treatment and obtained a series of highly favorable but questionable rulings on the requirements for the program that only years later were reversed.

"Diego Asencio, Mike Inman, Gene McNary are allowed to roam the Visa Office and INS whenever they please," lamented one frustrated State Department official in a memo that questioned the propriety of the former officials' activity. "They often just drop in without any warning and they walk about the building like they still worked for the USG [U.S. government]. I feel like a very small but chubby mouse between two very hungry and big tomcats."

* The law required that immigrants invest $1 million in new or troubled U.S. businesses, or $500,000 in a business located in an area of high unemployment. In many cases, only a small fraction of the total -- often just $10,000 per investor -- went to the struggling companies.

* The intent of the law was that each immigrant's investment would create or preserve at least 10 American jobs. However, some of the faltering companies have closed and laid off workers, with at least one filing for bankruptcy. Elnor Bailey's clothing factory in Alabama was the sort of business the program was designed to help. But she received only $50,000, not enough to keep the factory from closing last fall. She was never told she was entitled to substantially more money. "It makes me angry," she said. "It really does."

* When the INS finally did crack down on program abuses in December 1997, it did so with a vengeance, leaving hundreds of people in limbo -- including many immigrants who had tried to follow rules in effect at the time. As a result of that reversal, hundreds of immigrants who thought they had found a legitimate way to live in the United States are facing not only the loss of their investments, but possible deportation.

"I saw the United States as my final shore," said one immigrant investor, Mario Carbini of Italy. Now, he said, "I don't know if I'm living a nightmare."

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