Homeland Security official showed favoritism to Governor McAuliffe, others

Posted at 10:18 AM, Mar 25, 2015

WASHINGTON (CNN) — The Homeland Security Department’s current No. 2 official intervened to obtain visas for wealthy foreign investors with ties to politically connected people, including Virginia Gov. Terry McAuliffe and Hillary Clinton’s brother, according to an internal audit.

In a report released Tuesday, investigators from the Homeland Security Inspector General’s Office said Alejandro Mayorkas, during his time leading the U.S. Citizenship and Immigration Services agency, gave the appearance of favoritism and provided special access to people with connections. Mayorkas is now DHS deputy secretary.

At the immigration agency, Mayorkas oversaw the EB-5 visa program, under which foreign investors are awarded U.S. visas in exchange for investing $500,000 or $1 million in specific U.S. economic projects.

Among those who got special treatment to obtain visas, according to the report: investors in a project to build a casino in Las Vegas, after then-Senate Majority Leader Harry Reid asked for Mayorkas’s help; an investor proposal to fund electric car manufacturing, with ties to McAuliffe, now Virginia governor; and Anthony Rodham, brother of then-Secretary of State Clinton. A third project to fund movies produced by Time Warner Inc., also got Mayorkas’s special attention, the report says. CNN parent company Turner Broadcasting System is a unit of Time Warner.

In all three cases, the report says, Mayorkas “communicated with stakeholders on substantive issues outside of the normal adjudicatory process, and intervened with the career [immigration agency] staff in ways that benefited the stakeholders. Mr. Mayorkas’ conduct led many [immigration agency] employees to reasonably believe that specific individuals or groups were being given special access or consideration in the EB-5 program.”

The DHS inspector general doesn’t allege Mayorkas committed any wrongdoing in his actions. He had wide discretion in overseeing the EB-5 program.

The program has existed for decades, but has exploded in popularity in recent years, particularly among Chinese immigrants seeking U.S. visas. The FBI and other government agencies have raised security concerns. Some critics say the Chinese government and other foreign agents could use the program for espionage and other purposes.

Mayorkas, in a statement, said he disagreed with the inspector general report.

“I will certainly learn from it and from this process,” he said.

He said he found the EB-5 process broken when he arrived at the immigration agency and sought to improve it.

“I could not and did not turn my back on my responsibility to address those grave problems,” Mayorkas said. “I made improving the program a priority and I did so in a hands-on manner, through cases, policies, and sweeping personnel and organizational changes.”

Homeland Security Secretary Jeh Johnson said he has “full confidence” in Mayorkas and chalked up any mistakes to Mayorkas’s trying to be hands-on because he was “impatient with our sluggish government bureaucracy.”

In one case examined by the investigators, that of the LA Films Regional Center, the report alleges Mayorkas reversed the denial of a proposal requested to fund Sony movie projects after being in touch with prominent political stakeholders involved in the projects. After this, the report says, Mayorkas installed a new hand-picked “deference review board” to examine Time Warner movie projects, a process that was never used again and for which there exists no records of the board’s proceedings.

Mayorkas gave similar treatment, the report says, to a proposal to fund a Las Vegas hotel and casino. The report says that investor petitions were expedited at the request of Reid and fell outside EB-5 program guidelines. Mayorkas took the unusual role of requiring his staff to brief the senator’s office on the status of the EB-5 request weekly, according to the report.

A spokeswoman for Reid said the senator is proud of the jobs the casino project created in his home state.

“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,” Kristen Orthman, Reid spokeswoman said. “Senator Reid was not involved in the security screening process in any way.”

The report also outlined “extraordinary treatment as a result of Mr. Mayorkas’ intervention” for Gulf Coast Funds Management Regional Center due to its ties with politically connected backers, including former Virginia Governor Terry McAuliffe and the brother of Hillary Clinton, Anthony Rodham, who was listed as CEO of Gulf Coast during the dealings with Mayorkas.

A spokesman for McAuliffe said the report shows nothing wrong with what the governor asked of DHS.

“This report demonstrates that Gov. McAuliffe, along with many other bipartisan individuals and businesses, asked DHS to fulfill its obligation to adjudicate the applications that were before them in a timely fashion,” said Brian Coy of McAuliffe’s office, in an email.

The issue became a political problem for McAuliffe in his successful run for governor and for Mayorkas as he awaited a Senate vote on his current post.

Republican Sen. Charles Grassley of Iowa, who pushed for the inspector general probe, said the findings validated the concerns he raised in opposing Mayorkas’ elevation to the No. 2 job at DHS.

“The IG’s findings are very serious, especially given the role Mr. Mayorkas now plays in the department,” Grassley said. “The President and Secretary Johnson need to take action to hold him accountable.”