ACTION Advocates for Government Accountability A 501(c)(3) Nonprofit Corporation December 16. 2013 VIA CERTIFIED MAIL Hon. Barbara Boxer, Chair Hon. Johnny Isakson, Vice Chair U.S. Senate Select Committee on Ethics Senate Hart Office Building, Room 220 Washington, D.C. 20530 Re: Request for Investigation of Conflicts of Interests Dear Senators Boxer and Isakson: Cause of Action is a non-profit, nonpartisan government accountability organization that fights to protect economic opportunity whenever federal regulations, spending, and cronyism threaten it. We seek, among other things, to ensure that elected officials are forthright about any attempts they make to use political influence to achieve ends that are personally profitable, but not in the public interest. In January 2013, Senator Harry Reid (D--NV) contacted two officials at the U.S. Citizenship and Immigration Services (U SCIS)--Office of Legislative Affairs Agent Miguel Rodriguez and USCIS Director Alejandro Mayorkas--in what The Washington Times characterized as an attempt to influence the approval of a number of EB-5 immigrant investor applications--some of which had not been approved due to "suspicious financial to set them aside for expedited review? Despite the fact that these applications were ineligible for appeal} Senator Reid's efforts to lobby USCIS resulted in the reconsideration and approval of these applications, as well as the subsequent securing of millions of dollars in foreign and domestic funds for the SLS Hotel Casino and American Dream Fund EB-5 Regional Center--~both of which are major contributors to the Democratic Party and its candidatesfl Even more 1 All potential immigrant investors must demonstrate in the Form I-526 conditional application that the "capital" being used to invest in the EB--5 project has been "obtained through lawful means," as demonstrated by "foreign business registration records," "[foreign] tax returns," and other forms of evidence. 8 C.F.R. It is likely that the "suspicious financial activity" associated with the applications in the present case implicate this regulation. 2 John Solomon David Sherfinski, VEGAS RULES: Harry Reid Pushed Feds to Change Ruling for Casino Big-money Foreigners, WASH. TIMES (Dec. 10, 2013), available at 3 See generalbz 8 C.F.R. 204.6. 4 Solomon Sherfinski, supra note 2. 1919 Ave, NW Suite 650 CauseOfAction Washington, DC 20006 202.499.4232 troublesome is the fact that Senator Reid's son, Rory Reid, and his law firm, Lionel, Sawyer Collins P.C., are legal counsel to the SLS Hotel Casino. Rule 43 of the U.S. Senate Code of Official Conduct permits members "to assist petitioners before executive and independent govemment officials and agencies."5 Such advocacy, however, ought not to be undertaken for the sake of personal benefit and should avoid any semblance of "special treatment."6 Indeed, the Select Committee on Ethics has suggested that members avoid interfering in "quasi-judicial, adjudicative, or enforcement" matters, since an Executive agency decision should be "based only upon a record developed during a trial-like hearing?" Ex parte communications of the kind made by Senator Reid arguably violate the Code of Official Conduct. Urging the expedited approval of a Specific Set of visa applications that are flagged for "suspicious financial activity" goes beyond "urg[ing] prompt consideration"8 or typical constituent advocacy. This is especially the case give the relationship between Senator Reid and legal counsel for the SLS Hotel Casino. As you are no doubt aware, the rules and administration of the EB-5 program have been subject to increasing public concern. Career employees at the U.S. Department of Homeland Security, for example, have claimed that "top managers have given . . . politically connected applicants special treatment."9 Further misconduct has been reported at the state and local levels, where officials have manipulated U.S. Census data to accommodate favored corporations") or abused the program under the guise of "economic development" while embezzling fimds." Even individuals who make their living representing Regional Centers or companies participating in the Pilot Program have been found guilty of fraud" and subj ected to actions bought by the U.S. Securities and Exchange Commission. 5 U.S. SEN. SELECT COMM. ON ETHICS, SENATE ETHICS MANUAL (S. PUB. 108-1) 177 (2003), available at 6 Id. at 173. 7 Id. 8 Id. at 177. 9 Tom Hamburger Peter Wallsten, GreenTecl7 Fits Pattern of Investment That Has Made Big Profits for Terry Mcriultffe, WASH. POST (Sept. 21, 2013), available at [0 CAUSE OF ACTION, POLITICAL PROFITEERTNGI HOW FOREST CITY ENTERPRISES MAKES PRIVATE PROFITS AT THE EXPENSE OF TAXPAYERS (Dec. 9, 2013), available at 12/13 .pdf. See, Scott Waltman, More Answers Wanted: Area Lawmakers Call for More Investigations of State Economic Development Eflorts, ABERDEEN NEWS (Dec. 15, 2013), available at '2 See, Aisling Swift, ormer Naples Attorney Sentenced on Fraud Charge in Immigration Cases, NAPLES NEWS (Dec. 9, 2013), available at '3 See, Complaint at 18 11 57, Sec. Exch. Comm. v. A Chicago Convention Center, LLC (N .D. 111. Feb., 2013), available at see also 15 U.S.C. 77q(a)(2)- These concems--in addition to others we have raised to the attention of your colleagues in the House of Representatives'4--demonstrate the extent to which EB-5 is abused. Indeed, a recent U.S. Immigration and Customs Enforcement memo released by Senator Grassley (R-IA) details how the program "inherently creates an opportunity for fraud" and may pose a serious threat to national security." Further, the program can be abused as a tool to finance local, state, or federal elections as Federal Election Campaign Act rle?gulations permit contributions from foreign nationals who have obtained a green card. The American people deserve better. It is unfair for politicians to attempt to influence the enforcement of our laws, especially when they--or their close family members--stand to benefit. Even more importantly, such unethical efforts threaten the integrity of our immigration system and our national security. Consequently, we request that the Select Committee on Ethics investigate this matter and ask Senator Reid to disclose all conflicts of interests he, or his son, might have had in the approval of EB-5 visa petitions for the SL8 Hotel Casino. Senator Reid's full and honest disclosure will help to maintain public faith in the integrity of our political and legal institutions, avoid suspicion of the politicization of the Executive branch, and dispel any appearance of impropriety amongst members of the Senate. Executive Director cc: Hon. Harry Reid, U.S. Senate Hon. Alejandro Mayorkas, Director, U.S. Citizenship Immigration Services '4 Letter from Cause of Action to Hon. Darrell Issa, U.S. House of Representatives (Sept. 24, 2013), available at Enclosures.pdf; Letter from Cause of Action to Hon. Darrell Issa, U.S. House of Representatives (Dec. 9, 2013), available at '5 Letter from I-Ion. Charles E. Grassley, U.S. Senate, to John Sandweg, Acting Director, U.S. Immigration Customs Enforcement (Dec. 12, 2013) (ICE Memo included as Attachment 1), available at "5 See lssa Letters, supra note 14.