IG Report: Reid More Involved in Visa Controversy Than Previously Known

Senate’s top Dem pushed visa applications for Chinese investors in Vegas casino

Sen. Harry Reid / AP
March 25, 2015

The Senate’s top Democrat was more deeply involved than previously known in an effort to secure U.S. visas for Chinese investors in a Las Vegas casino despite the concerns of career federal officials, according to an inspector general report released on Tuesday.

Senate Minority Leader Harry Reid (D., Nev.) and his staff received weekly updates from top officials at U.S. Customs and Immigration Services (USCIS) regarding the status of visas for investors in the SLS Las Vegas Hotel and Casino, the report reveals.

Executives at the casino’s parent company, a client of Reid’s son Rory, donated thousands of dollars to Reid’s campaign after he helped speed consideration of its applications for visas for its Chinese investors.

That expedited consideration came despite warnings from career USCIS officials that applicants had forged paperwork, tried to conceal the sources of their investment, and, in one case, had ties to a child pornography business.

The visas came by way of USCIS’ EB-5 program, which provides U.S. visas to foreign investors in American businesses. Private financing for SLS required that it receive approval for a number of those visas by early 2013. With the deadline approaching, internal USCIS emails show, Reid began pressing for the agency to speed their approval.

Reid has acknowledged going to bat for SLS’ foreign investors. In a statement to ABC News last month, he said "his office advocated for the project to receive immediate attention, and nothing more."

However, new details in the inspector general’s report reveal that his involvement was deeper and more prolonged. Reid requested and received regular updates from then-USCIS director Alejandro Mayorkas on the status of SLS’ EB-5 applications, agency employees told the IG.

The IG report criticized Mayorkas for creating an "appearance of favoritism" in the EB-5 application process.

"In three matters pending before USCIS, however, Mr. 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," the report found. "In each of these three instances, but for Mr. Mayorkas’ intervention, the matter would have been decided differently."

The report noted that Reid had pushed Mayorkas to expedite SLS visa processing. It also revealed additional details about the senator’s involvement in bureaucratic wrangling over the applications.

"We were told that, during a January 8, 2013, phone call with Senator Reid, Mr. Mayorkas agreed to provide ‘regular’ weekly updates on the status of the SLS petitions," the IG reported. "Staff described providing updates to members of Congress as routine, but not down to that level and degree’ as with the SLS case."

Reid’s office says he was concerned only with the project’s positive economic impact.

"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," said Kristen Orthman, a spokeswoman for Reid, in an emailed statement.

However, the senator also had connections to Stockbridge/SBE Holdings, the company behind the SLS project. His son Rory, then an attorney at Lionel Sawyer & Collins, a Nevada law firm, represented SBE Entertainment, one of its parent companies.

Orthman told Jon Ralston, a political reporter based in Nevada, that Reid’s son’s work for SLS did not affect the company’s EB-5 applications.

"We have a long-standing office policy that strictly bars any member of the staff's family or the Senator's family from lobbying our office on behalf of their clients," she said. "That policy applies in this case."

Sam Nazarian, SBE’s chief executive, brought on Reid in 2012 to help "navigate through the maze of regulations required to access economic incentives offered on the state and local levels," according to promotional materials for the law firm.

After USCIS expedited SLS’ EB-5 applications, Nazarian donated $10,200 to Reid’s leadership PAC. Two other SBE employees each donated $1,000. The president of SLS chipped in another $1,000. All of those contributions came in a period of three days in October 2013.

Neither SLS nor SBE returned requests for comment.

Donations from company executives came after Reid’s reported doggedness in pushing Mayorkas to expedite the project’s EB-5 applications. According to the report, the two discussed SLS’ applications, considered on a rolling basis, after USCIS expedited.

"More than three months after the decision to expedite the SLS petitions, Mr. Mayorkas’ calendar listed a meeting with Senator Reid on May 6, 2013, in which he was advised that the ‘SLS expedite’ was one of the topics," the IG report said.

Asked about the IG’s findings, Orthman said her office "can’t confirm all the details in the report but we have no reason to believe they’re wrong."

"As we stated previously 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 in an emailed statement.

However, USCIS employees interviewed for the IG report described the process as unfair and overly political.

"The EB-5 staff expressed concern that granting the SLS request to expedite its investors’ petitions would make USCIS vulnerable to criticism of disparate treatment," the IG wrote. "After the decision to expedite the SLS petitions, a senior official observed that other EB-5 stakeholders were complaining about the preferential treatment of SLS."

One of those stakeholders called the process "blatantly unfair" and asked a USCIS official to "look into who is getting favorable treatment before it becomes an extreme political football."

SLS applications for EB-5 visas received preferential treatment even though many had errors or omissions that career USCIS officials said raised serious red flags.

The program will only approve visas for foreign applicants who demonstrate that the money they plan to invest through the program was not obtained illegally. They are also subject to vetting designed to ensure they are not tied to foreign governments or intelligence services.

According to a February ABC News report, "immigration officials conducting background checks on [one SLS EB-5 applicant] found that his wife was a possible match for a woman who had received payments from people accessing a child pornography web site."

Other applicants provided financial information to USCIS that was false or designed "to obscure" the source of their EB-5 investment funds, ABC reported.