An internal U.S. Justice Department report on a program that promised permanent residency to foreigners who invested a minimum of $500,000 in troubled American businesses concludes that only a tiny fraction of the money ever made it to the companies seeking assistance.
The report, written by the department's inspector general on a now-closed investigation, also includes new details on concerns raised by officials of the U.S. Immigration and Naturalization Service about improper influence in the agency's administration of the investor visa program.
While 2,761 investor visa petitions were approved by INS between 1994 and 1998, the report said that "usually, only a few thousand dollars of the petitioner's money ever made it past the partnership to any United States companies."
Based on the 1990 law, 2,761 visas should have produced investments of more than $1.3 billion in American businesses.
The investigation focused on actions of former INS general counsel Paul W. Virtue in the administration of the 10-year-old investor visa program. Under the program, foreign residents can become permanent U.S. residents by investing $500,000 to $1 million in an American business.
According to the report, the probe was triggered by allegations that Virtue "improperly granted former INS officials preferential treatment and undue access and influence."
The Sun reported in February that a small group of firms - including American Immigration Services or AIS, a Greenbelt firm - was created specifically to take advantage of the new law. Those firms signed up a number of former INS officials to represent them, including Gene McNary, the former INS commissioner, who served as legal counsel to AIS.
Five paragraphs of a two-page summary of the investigation were released in response to a Freedom of Information Act request by a New York lawyer. Nearly all of the second page of the report was blackened out.
E-mails and memos
The 47 additional pages that were made public include internal memos, e-mails and the notes of some interviews, including a March 16, 1999, session with Doris Meissner, then INS commissioner.
The commissioner, according to the investigator's report, said she knew little about the details of the program and only learned of problems during a briefing by a departing INS attorney who told her there was a "sensitive issue" regarding the administration of the program.
Many of the e-mails and memos released relate to efforts by AIS to allow its investors to amend already submitted visa applications to comply with the investment requirements of the 1990 law. The effort included meetings between AIS officials and Virtue.
A two-page 1998 e-mail authored by S. Alexander Gisser, then an INS attorney, charges that such after-the-fact amendments are not allowed under INS laws or regulations.
"We never intended to allow deficient original petitions to be cured at the back end. ... This violates basic immigration law," Gisser wrote.
Citing past instances of preferential treatment in the program, Gisser wrote, "even the advocates are starting to get a little amazed at our generosity."
In another memo, detailing an interview with an unnamed INS official, an investigator on the case reported that when the INS tried to clamp down on apparent abuses in the program, it "began receiving political pressure from congressional sources unhappy with the signaled change in policy."
Lawyer seeks disclosure
The report was released to Steven Perlman, a New York City immigration lawyer. Perlman said yesterday that despite the partial release he will continue his personal effort to force disclosure of the entire report in a suit pending in U.S. District Court in Manhattan.
In a letter to Perlman, officials of the inspector general's office said that they were withholding nearly 100 pages of additional materials relating to the investigation because their release would violate privacy and confidentiality rights of unnamed "third parties."
The Sun obtained a copy of the released materials on Wednesday.
INS spokesman Russell Bergeron said it would be "inappropriate" to comment on the released materials or the investigation itself. He noted that the investigation was triggered by concerns raised by the INS.
William Cook, a former INS official who is now a lawyer representing AIS, said Wednesday that the fact that the investigation was closed without any criminal action proves that the allegations of undue influence were "absolutely unsupported."
He said charges leveled against Virtue were the "creations" of INS officials who were philosophically opposed to the investor visa program. "I have known Paul Virtue for over 12 years and his integrity is beyond reproach," Cook added.
Bergeron, the INS spokesman, said that Virtue left the agency on May 6, 1999, nearly six months before the investigation was completed.
Virtue, who is now in private law practice, did not respond to a request for comment. In a previous interview he defended his actions.
While declining to comment specifically on the Virtue investigation, Bergeron said, "Generally speaking, if an individual leaves an agency and a subsequent investigation shows the individual did not violate any criminal statutes, then there is nothing we can do."
Paul Martin, a spokesman for the inspector general, also declined to comment on the released materials or to elaborate on the contents or conclusions of the report.
The final sentence of a two-page synopsis of the case states, "Based on the foregoing, this investigation is closed, as no further investigative action is warranted."