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John Sampson’s unusual new gig marketing green cards to Chinese nationals
In an unusual arrangement, State Senate Minority Leader John Sampson has seemingly taken on a high-ranking position in a private company marketing green cards to Chinese investors under the U.S. government’s EB-5 visa program.
Under the “Our Team” heading on its website, the New York City Real Estate Regional Center (NYCRERC), a federally authorized private-investment entity, lists Sampson as “Chief Executive Vice President,” beneath only Chief Executive Officer Lee Siegel in the company’s apparent hierarchy. The website also prominently features Sampson in a Chinese-language newspaper ad (pictured above) in which the largest image is Sampson’s official State Senate website photo with a caption that identifies him both as “Chief Executive Vice President of the Regional Center” and “New York State Minority and Democratic Conference Leader.”
Despite what appears to be Sampson’s significant role in the company, a representative for the minority leader said he was strictly an unpaid “volunteer” with NYCRERC, and that Sampson’s involvement with the company had been approved by the Legislative Ethics Commission. A follow-up written statement issued to City & State read, “Senator Sampson is happy to volunteer his name and time to any effort which will create investment and jobs in a federally approved economic development effort located in New York City, particularly in those areas that have high unemployment.”
In addition to his assertion that he is not being compensated, there is also no evidence that the senator has received any ancillary benefits, such as campaign contributions, from those publicly identified as involved in NYCRERC.
Regardless of the legality of Sampson’s relationship with the company, however, ethics watchdog Susan Lerner, executive director of Common Cause New York, called the senator’s role in the company “worrisome.”
“Senator Sampson needs to be more sensitive to the appearance that he is officially endorsing a private, profit-making activity,” said Lerner.
“It’s blurring the lines between [his] official capacity and [his] personal activities,” Lerner added. “The fact that he’s a volunteer for this is just a bit strange, because this is not an eleemosynary activity. This is not like being a volunteer for the American Cancer Society.”
At a NYCRERC press conference on April 22 in Flushing, Queens, aimed at and taped before a Chinese-speaking audience, CEO Lee Siegel seemed to stoke the ambiguity between the senator’s public and private connections to the company: “Although Mr. Sampson is an elected official, and serves now as the New York State Senate minority leader, he found our regional center and the project that we plan to promote, for the reasons I indicated earlier, to be very beneficial to the people and the government, as I indicated, and therefore will serve in his civilian capacity as our distinguished board member.”
Sampson, who also spoke at the press conference, demonstrated some unfamiliarity with the entity, several times mistakenly calling it a “regional council”—an echo of Governor Cuomo’s economic-development strategy—rather than a “regional center.”
“The reason I lend not only myself but my name to this board is because I believe in its mission,” Sampson told the crowd, according to a video of the event posted on YouTube. “There are a lot of boards that are created that are looking to do things for people, but actually do nothing for the people it is intended to do something for.”
“I want to let you know this regional center, in conjunction with this board, what are we going to do for you,” continued Sampson. “We’re going to make sure that you realize the American dream.”
According to its website, NYCRERC was “approved by the U.S. Citizenship and Immigration Services as a designated Regional Center on April 3, 2012” to market EB-5 visas in five counties in New York State and seven in New Jersey, with its “main geographic focus” the five boroughs of New York City.
The EB-5 program has become increasingly popular in recent years among entrepreneurs, developers, and development agencies seeking bargain funding. Would-be immigrants who put down a minimum of $1,000,000 (or at least $500,000 in high-unemployment or rural areas) can get green cards for themselves and their families if their investment—usually parked with little or no interest for five years—can be calculated to create 10 jobs within two years.
The vehicles for such investments are called “regional centers,” federally authorized private-investment pools, which pay the foreign investors little interest and make a profit by keeping the difference between the amount paid out to these investors and the below-market interest rates they charge those seeking the money to fund local projects. More than 220 regional centers across the U.S. compete for the attention of wealthy would-be immigrants, driving an industry that brought in around $1 billion in investment to America in the last fiscal year.
Indeed EB-5 has been so popular that Demos think-tank senior fellow Ann Lee, in a New York Times op-ed, reported that “the President’s Council on Jobs and Competitiveness has called for the program be ‘radically’ expanded over the next few years.” In the same essay, however, Lee wrote that the program has been “rife with fraud and corruption,” with common abuses such as “centers and brokers playing down risky investments and misrepresenting how the program works, including a promise that EB-5 investments are guaranteed by the federal government—when the government in fact does nothing of the sort.”
According to a Google translation of a Chinese-language website with the URL www.jdhjusa.com, NYCRERC is seeking $45 million from 90 investors to direct what NYCRERC’s website calls a “Clean Air Car Service & Parking Project.” Though NYCRERC requires that users log in to their website to get details about the project, another site with the URL www.greencardthroughinvestment.com, which under the heading “Investment Projects” lists only the NYCRERC Air Car Service project, specifies that the venture entails buying 300 hybrid vehicles for a car service, constructing and operating an automated car wash, and constructing parking lots in high-congestion areas of the city with a total capacity of 2,000 spaces. An announcement on NYCRERC’s homepage states that the project’s application for a livery-base license was approved by the New York City Taxi & Limousine Commission on May 31, and that the car service intends to begin operation in September of 2012.
In interviews NYCRERC CEO Siegel told City & State that the hybrid-car service was being created to “supplement” the existing industry. “Projects that are good thrive, and elected officials want to be a part of that,” he said, estimating that the project would create 1,500 jobs, well more than the 900 jobs—10 per investor—required under the law.
As to Sampson’s involvement in NYCRERC, Siegel said, “He’s not getting paid. This is not a job.”
Asked why the company’s website did not indicate that Sampson was a volunteer, Siegel responded, “Why does it have to say that? A title is a title. Nevertheless, he’s on the board, and he’s just giving support for the company.”
Further questioned as to whether any of the other executives listed on NYCRERC’s “Our Team” page were volunteers, Siegel replied in the affirmative, though he declined to specify which ones, citing confidentiality agreements.
While Siegel maintains that Sampson’s role in NYCRERC is not out of the ordinary, the position, at least as portrayed on the website, is unusual. Michael Gibson, a Florida-based registered investment advisor who runs EB5info.com, a national clearinghouse for the EB-5 program, said that while many regional centers have government officials on an advisory board or have hired former federal-immigration officials, “to my knowledge there are no other centers that have a public official as managing the center.”
He noted, “Chinese investors take great comfort from seeing the involvement of public officials, as that is part of their culture—so U.S. developers and regional centers take advantage of that, but it would be misleading if investors relied on the public official to ensure that the jobs were created or principal returned.”
“If the center were to promote the elected official’s position in their marketing material as having a material impact on the success of the project, when they actually have very little to do with the successful implementation of capital and job creation, that would be misleading and possibly fraudulent,” added Gibson, who noted, after reviewing NYCRERC’s website and the Chinese-language ad featuring Sampson, that it was hard to evaluate in this case.
An elected official’s embrace of an EB-5 project can help translate into big bucks. The New York City Regional Center has already raised hundreds of millions of dollars for the Brooklyn Navy Yard and the Atlantic Yards project, using promotional videos that include Brooklyn Borough President Marty Markowitz.
Former government officials have also found themselves in demand. In May 2011 former New York Gov. David Paterson signed up to partner with the New York Immigration Fund, pursuing a hotel project in New York aimed at immigrant investors, though he is no longer listed on the fund’s website. Former San Francisco Mayor and California State Assembly Speaker Willie Brown is part of the management team of a firm operating the San Francisco Bay Area
The allure of a politician’s apparent association with an EB-5 project is such that even Bronx City Councilman Larry Seabrook, who faces a retrial this month on corruption charges, appeared at the Second Annual EB-5 Investment Summit: Dealmakers Conference in New York on April 27, sending a “warm welcoming and inspiring message to the audiences from 40 states and China,” according to the EB-5 News Blog run by industry consultant Brian Su.
Asked what Seabrook was doing at the conference, a spokesperson for the councilman said he “attended to talk about job creation in the region and in the rest of the country, and the only compensation he received was applause from the audience.”
While there is no proof of ethical misconduct or wrongdoing on the part of Senator Sampson in the case of NYCRERC, he has run into problems in the past surrounding an improper relationship with the development business. In 2010 the state inspector general issued a scathing report concluding that Sampson had leaked confidential information about the bidding process for the Aqueduct racino to a lobbyist—former State Senator Carl Andrews—after gaining campaign contributions from the company employing Andrews, AEG.
Tags: aeg, Andrew Cuomo, Ann Lee, Atlantic Yards, Brian Su, Brooklyn Navy Yard, Carl Andrews, Common Cause New York, David Paterson, EB-5 visa program, John Sampson, larry-seabrook, Lee Siegel, Legislative Ethics Commission, Marty Markowitz, Michael Gibson, New York City Real Estate Regional Center, New York Immigration Fund, NYCRERC, San Francisco Bay Area Regional Center, Susan Lerner, U.S. Citizenship and Immigration Services, Willie Brown
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