The Homeland Security inspector general is investigating President Obama's nominee to be the No. 2 official at the department over his role in helping the brother of former Secretary of State Hillary Rodham Clinton get an immigrant visa for a Chinese investor.
Investigators have told Capitol Hill lawmakers that Alejandro Mayorkas, currently director of U.S. Citizenship and Immigration Services (CIS), is accused of ramming through a visa application for McLean-based Gulf Coast Funds Management after it was denied by CIS and that denial was confirmed by the appeals process.
Mrs. Clinton's brother Anthony Rodham is president and CEO of the company, which bundles investment monies from foreigners who want to come to America on the investors' program, known as the EB-5 visa. The visa program and its use by Chinese businesses to invest in U.S. infrastructure projects has raised security concerns in Congress and within the Obama administration.
An email that outlines the investigation was sent to members of the Senate Homeland Security and Governmental Affairs Committee and obtained by The Washington Times. It was first reported by The Associated Press.
Latest potential scandal
The revelation is likely to complicate, if not completely derail, confirmation prospects for Mr. Mayorkas, nominated to be the troubled department's deputy secretary and the only person Mr. Obama has nominated in his second term to one of its seven unfilled senior positions.
News of the investigation, which also likely will reopen questions about Mr. Mayorkas' involvement in the "pardongate" scandal at the end of the second Clinton term, could scarcely have come at a worse time. The administration has been battling a string of scandals all summer and is struggling to fill long-vacant leadership posts at the Department of Homeland Security in the midst of a roiling debate about immigration reform.
The inspector general email says investigators, who initially acted on a tip from an FBI counterintelligence analyst, uncovered "subsequent allegations involving alleged conflicts of interest, misuse of position, mismanagement of the EB-5 program, and an appearance of impropriety by [Mr.] Mayorkas and other U.S. CIS management officials."
It says there have been no findings of criminal misconduct.
Neither the White House nor Homeland Security responded to several requests for comment.
White House press secretary Jay Carney referred questions to the inspector general's office, which said the probe is in its preliminary stage and that the office doesn't comment on the specifics of investigations.
Mr. Mayorkas, a former U.S. attorney in California, once faced questions about his involvement in President Clinton's commutation of the prison sentence of a Democratic Party donor's son.
Another of Mrs. Clinton's brothers, Hugh Rodham, was hired by that donor to lobby for the son's commutation, and Mr. Mayorkas asked the prosecuting U.S. attorney in Minnesota not to oppose the commutation. He told lawmakers during his 2009 confirmation hearing that "it was a mistake" to talk with the White House about the request.
The EB-5 visa program allows foreigners to get visas if they invest $500,000 to $1 million in projects or businesses that create jobs in America. The amount of the investment required depends on the type of project. Investors who are approved for the program can become legal permanent residents, or green card holders, after two years and then later become eligible to apply for citizenship.
Gulf Coast Financial Management is one of hundreds of companies across the country that are federally approved regional centers for the program. Regional centers pool investor money for would-be immigrants and file their visa applications.
Gulf Coast is also the finance arm of GreenTech Automotive, a company founded by Terry McAuliffe, a former Clinton fundraiser and Democratic National Committee chairman. Mr. McAuliffe is the Democratic candidate for governor of Virginia.
In a statement, the company said it "was not aware of any investigation by Department of Homeland Security" and that its management "abides by all regulations." It also said contact with the agency "has been limited to procedural inquiries."
The office informed FBI agents conducting a pre-nomination background check on Mr. Mayorkas about the open investigation last month, the email states.
Homeland Security vacancies
If Mr. Mayorkas is confirmed as Homeland Security's deputy secretary, he probably will run the department until a permanent replacement is approved for departing Secretary Janet A. Napolitano.
The Times reported Tuesday that Homeland Security is suffering from a huge number of vacancies. Seven of its 18 positions require Senate confirmation, including four that have been vacant for all of 2013 and one, inspector general, that has been empty for 2 years. Eight other key positions not requiring Senate approval, such as chief information officer and chief privacy officer, also are vacant or filled by temporary officials.
News that the White House pushed ahead with Mr. Mayorkas' nomination despite knowing he was under investigation angered some Republicans.
Sen. Tom Coburn of Oklahoma, the ranking Republican on the Homeland Security and Governmental Affairs Committee, "has asked the committee to allow the inspector general to complete his investigation before moving ahead with the nomination," his spokesman John Hart told The Times.
A Senate aide told The Times that the administration asked the homeland security committee to expedite the nomination, because if Mr. Mayorkas is not confirmed as deputy secretary before the August recess, he will be unable to act as secretary after Ms. Napolitano steps down in September.
The aide spoke on the condition of anonymity to discuss sensitive matters of Senate procedure.
But a statement to The Times from the homeland security committee's top Democrat said the rush on Mr. Mayorkas, contrary to Republican claims, was not at the administration's behest.
Sen. Thomas R. Carper, Delaware Democrat and committee chairman, "has long been concerned by executive branch vacancies, including at DHS," said the statement. "To that end, he has always been working to hold the nomination hearing for Mr. Mayorkas as soon as possible."
The statement said Mr. Carper learned of the investigation Monday and was weighing whether to proceed with the hearing as planned Thursday.
Visa program abuse?
The FBI in Washington has been concerned about the investor visa program and the projects funded by foreign sources since at least March, according to emails obtained by The Associated Press.
The bureau wanted details of all of the limited liability companies that invested in the EB-5 visa program. Of particular concern, the FBI official wrote, was Chinese investment in projects, including the building of an FBI facility.
"Let's just say that we have a significant issue that my higher-ups are really concerned about and this may be addressed way above my pay grade," an official wrote in one email. The FBI official's name was redacted in that email.
Sen. Chuck Grassley of Iowa, the ranking Republican on the Senate Judiciary Committee, sent the FBI a lengthy letter Tuesday asking for details of its review of the foreign investor visa program and Chinese investment in U.S. infrastructure projects.
The U.S. government has long been concerned about Chinese investment in infrastructure projects.
In September, the Obama administration blocked a Chinese company from owning four wind farm projects in northern Oregon that were near a Navy base used to fly unmanned aircraft and electronic warfare planes on training missions.
In October, the House Permanent Select Committee on Intelligence warned that two leading Chinese technology firms, Huawei Technologies Ltd. and ZTE Corp., posed major security threats to the U.S. Both firms have denied being influenced by the Chinese government.
The most routine users of the EB-5 program are Chinese investors. According to an undated, unclassified State Department report about the program obtained by the AP, the U.S. Consulate in Guangzhou, China, processed more investor visas in the 2011 fiscal year than any other consulate or embassy.
The document says "applicants are usually coached and prepped for their interviews, making it difficult to take at face value applicants' claims" about where their money comes from and whether they hold membership in the Chinese Communist Party. Party membership would make an applicant ineligible for the investor visa.
It is unclear from the inspector general's email why the investor visa application was denied. Visa requests can be denied for a number of reasons, including circumstances in which an applicant has a criminal background or is considered a threat to national security or public safety.
• The article is based in part on wire service reports.
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