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A Department of Homeland Security watchdog report issued Tuesday blasted
the agency's No. 2 official for repeatedly intervening on behalf of
well-connected participants in an investor-visa program, including Gov.
Terry McAuliffe (D-Va.) and Tony Rodham, a brother of former Secretary of
State Hillary Clinton.

The inspector general report faults Deputy Secretary of Homeland Security
Alejandro Mayorkas for creating "an appearance of favoritism and special
access" as a result of highly unusual steps he took while serving as
director of U.S. Citizenship and Immigration Services, which oversaw the
investment-based program known as EB-5.

"Mayorkas communicated with stakeholders on substantive issues, outside of
the normal adjudicatory process and intervened with the career USCIS staff
in ways that benefited the stakeholders," Inspector General John Roth
wrote. "In ... three instances, but for Mr. Mayorkas's intervention, the
matter would have been decided differently."

In a 32-page written statement made public along with the 65-page report,
Mayorkas adamantly denied wrongdoing. "I respectfully submit that a
complete and total repudiation of the allegations against me is the only
correct and just conclusion," he told investigators in January.

However, a press statement Mayorkas released Tuesday was slightly more
conciliatory. "While I disagree with the Inspector General's report, I will
certainly learn from it and from this process," he said. "As the leader of
U.S. Citizenship and Immigrations Services, I had the responsibility to
ensure that cases, including the three that are the focus of the report,
were decided as the law required and that agency errors were corrected."

Homeland Security Secretary Jeh Johnson said Tuesday that he has "full
confidence" in Mayorkas, but that Mayorkas and others need to be cautious
about intervening in specific cases.

"Each of us in leadership must be mindful that, when we become involved in
individual matters that happen to reach our desk, we risk the appearance of
preferential treatment and the suspicion of our subordinates. As public
servants, we must maintain the trust and confidence of all those around us,
and be above reproach," Johnson said in a statement. "I have discussed this
with Deputy Secretary Mayorkas and I am confident he understands this."

Mayorkas's involvement in a McAuliffe-backed effort to win funds for a
fledgling electric car company called GreenTech Automotive became an issue
of contention when McAuliffe mounted a successful bid for the Virginia
governorship in 2013. The inspector general report cites that as one case
in which USCIS employees believed political influence was at work.

"Mayorkas intervened in an administrative appeal related to the denial of a
regional center's application to receive EB-5 funding to manufacture
electric cars through investments in a company in which Terry McAuliffe was
the board chairman," the IG report said. "The intervention was
unprecedented and, because of the political prominence of the individuals
involved, was well as USCIS's traditional deference to its administrative
appeals process, staff perceived it as politically motivated."

The report also draws attention to the role played by Rodham, who ran an
EB-5 visa investment known as Gulf Coast Funds Management, which directed
funds to GreenTech. Rodham's sister was secretary of state during much of
the time that Gulf Coast and GreenTech were pressing USCIS for approvals to
accept investments that could lead to green cards for foreigners willing to
front up more than $550,000 in principal and fees.

Rodham wrote directly to Mayorkas in January 2013 about approval delays,
the report said, and Mayorkas forwarded the email to other staffers "with a
'high importance' designation."

The report explores possible discrepancies in accounts of a February 2011
meeting involving Mayorkas and McAuliffe. Mayorkas told investigators he
was in a "listen-only mode" at the meeting, but four months after the
meeting McAuliffe emailed another DHS official complaining: "We were
promised by the Director that our application would receive an expedited
review."

The report said one employee at the meeting wrote in an email after a July
2011 meeting that Mayorkas "noted several times that these cases are
affiliated with 'people of influence' and 'people with money' and he has
several more of these on his radar."

Mayorkas told investigators in an interview that he didn't remember making
such statements, that they sounded "absurd," and that he was "impervious to
pressure." He argued more broadly that the EB-5 program, aimed at awarding
green cards to foreign investors who invest $500,000 in a rural or
impoverished area while creating at least 10 jobs, was badly managed and
that those involved at the immigration service were making inconsistent
decisions on applications.

A spokesman for McAuliffe did not respond to a request for comment Tuesday.
The report says investigators "were unsuccessful in [their] attempts to
interview McAuliffe." He dropped his investment and role in GreenTech in
2012 before launching his gubernatorial bid.

Email messages and phone messages to Rodham on Tuesday through the Virginia
office of Gulf Coast were not immediately returned.

The IG report also faulted Mayorkas's involvement in EB-5 investment
projects that drew the interest of two other prominent Democrats: Senate
Minority Leader Harry Reid of Nevada and former Pennsylvania Gov. Ed
Rendell.

The report says Reid and Mayorkas spoke about a Las Vegas casino-and-hotel
development effort in January 2013. Mayorkas said he promised nothing
beyond a "fresh look" at the issue. However, USCIS staffers say they were
told that the director had agreed to provide weekly updates to Reid's staff
on the status of the petitions.

Reid spokeswoman Kristen Orthman said Reid was proud of his advocacy for
the casino project, known as SLS.

"Senator Reid's work helped get SLS built and created thousands of Nevada
jobs. SLS Las Vegas has revitalized the North end of the Las Vegas Strip
and with the coming addition of the Genting Resort the area will continue
to grow. ... Senator Reid considers it part of his basic responsibility as
Nevada's senator to ensure that projects that benefit Nevada get fair and
timely consideration from the federal government," Orthman said. "Senator
Reid will always put Nevada first and fight for Nevada jobs."

The report claims Mayorkas spoke with Rendell in 2011 and 2012 as USCIS
worked on applications related to efforts to obtain investor visas through
financing of movies.

Mayorkas said he initially spoke to Rendell at the request of the office of
then-DHS Secretary Janet Napolitano and that Rendell complained that
USCIS's mishandling of applications was "costing Pennsylvania the
investment of funds and the creation of jobs."

Mayorkas said that after the first call he looked into the matter with his
staff. He could not recall the second call with Rendell, the report said.

Rendell did not immediately respond to email messages seeking comment on
the report.

House Homeland Security Committee Chairman Mike McCaul (R-Texas) issued a
statement Tuesday calling the report "extremely concerning" and announcing
that he will hold a hearing Thursday to explore the issue.

Sen. Chuck Grassley (R-Iowa) said the findings raise concerns about Obama's
decision to name Mayorkas last year as the deputy secretary at DHS.

"Digging into the report and reading about specific cases, you can see just
how questionable Mr. Mayorkas' ethics and judgment were. And, just as bad,
is the blind eye that the Obama administration turned when elevating this
individual to the number two slot at the Department of Homeland Security,"
Grassley said. "The sheer number of whistleblowers who came forward is a
darn good indication as to how bad things were at the agency."

Eric D. Schwerin
eschwerin@rosemontseneca.com

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