Well that didn’t take long, once they started looking. A few short months ago the state quietly beefed up its oversight of the federal investment for visa EB-5 program. The Department of Financial Regulation (DFR) took on the watchdog role from the Agency of Commerce and Community Development (ACCD).
This change came after a large group of EB-5 investors had complained that the Agency of Commerce and Community Development hadn’t properly overseen the investment aspects of the program. The state hopes to put to rest persistent concerns over whether the ACCD could regulate the EB-5 programs while at the same time functioning as its full time booster and enthusiastically promoting it overseas.
Now, taking on the oversight task, the DFR has indeed been requested to check AnC Bio Vermont (AnC Bio S. Korea was formerly named The Sports Seoul 21 Co., Ltd) and other programs specifically for compliance with federal and state securities laws.
From VtDigger.com comes a detailed report of the entire drama:
At the governor’s behest, the state agency that oversees the EB-5 immigrant investor program has asked the Department of Financial Regulation to determine whether the $118 million biotech project in Newport complies with state and federal securities laws.
The suspension of AnC Bio’s memorandum of understanding comes as the state has reorganized its oversight of EB-5 projects. The protection of investor interests will now be the responsibility of the Department of Financial Regulation. The Agency of Commerce and Community Development, which had been solely responsible for EB-5 marketing and oversight, will now handle promotion only.
[…] The state cancelled the West Bowl expansion in August and both AnC Bio and Q Burke projects are now under Department of Financial Regulation scrutiny. The regional center also passed along concerns to the department about existing projects at Jay Peak that have come under fire from investors. All Vermont EB-5 projects will be reviewed by the project.
The planned AnC Bio biotech lab/factory is part of the growing EB-5 investment-fueled pyramid of development projects underway by Jay Peak partners Bill Stenger and Ariel Quiros. VtDigger.com is currently all over this story and they seem to be the only one casting a skeptical eye on it.
The Vermont EB-5 investment from its early beginnings has involved Vermont business, and international investments worth hundreds of millions of dollars. Major office holders in the state from each party – including several past governors, both current senators and our lone congressman – have supported Vermont EB-5 deals. Ultimately over the years all the boosters and promoters support the grand promises of many hundreds of jobs – coming … soon.
So with all that interest in the outcome, where is the other media coverage that should be looking behind the curtain of boosterism as you might expect?
Well for now I know where it isn’t. Yesterday morning I checked the Burlington Free Press online and no mention of the newest troubles in Vt’s EB-5 world. The FreeP did have an eye-catching story headlined: Cat Turd Hockey Team … a scoop for that paper to be sure.
I don’t know why anyone thought it was a good idea to have the same agency perform both promotion and regulation. Should have been DFR from the start. But I suppose the administration was reluctant to put up any barriers in the way of a project with such great potential.
But if this project collapses, or a significant scandal emerges, it’ll be another black eye for Gov. Shumlin’s reputation.
The whole Stenger/EB-5 house of cards struck me as profoundly dubious from the start.
That strict firewalls weren’t constructed between regulators and promotors just reinforces my suspicions.