The title of a new Christian Science Monitor article reads like a parody of words: "Who’s creating US jobs? Mexicans", by Taylor Barnes, March 2, 2010. Mexicans are using EB-5 visas to escape the violence of drug cartels—not to create jobs for Americans. To get out of Mexico they will use whatever visas they can get, including L-1.
It’s perfectly legal. Immigrants can bring in family on an EB-5 visa if they invest $500,000 to $1 million in a US business. Mexicans have a cheaper deal via E-1 and E-2 visas, thanks to a treaty with the US. Gama took a similar tack, buying Village Gourmet and transferring himself to the US as its new executive via an L-1 visa, designed for intercompany executive transfers.
Ricardo del Rio's frankness is refreshing. He explained that he wants to avoid living in areas of the U.S. that are diversified. Apparently Mexicans are still allowed to be honest—a characteristic we could use more of in the U.S.
“San Antonio just came out ... as probably one of the best cities to invest in,” says Alfredo Lozano, an immigration attorney who works in the same law firm as Mr. Martinez. It’s close to Mexico but considered less dangerous than cities like Brownsville and Laredo.
That’s what attracted Ricardo del Rio.
“Very Mexican, very friendly. Quiet. I call it ranch,” says the polite and precise insurance agent, who got E-2 visas for his family at the end of 2006.
He turned down a job in Miami—concerned his family wouldn’t feel at home with the diverse Latino communities there. Setting up shop in California would have cost him three times as much, he adds.
Now, let's talk about the jobs these Mexicans are creating with their investments.
But Mr. del Rio might not be here much longer. His visa business plan called for hiring seven people over five years in his insurance business, and that’s yet to happen. He has two more years to make good on that proposal—and thinks he may hire a handful—or he won’t be able to renew his visa and he and his family will be forced to leave the US—an unsavory prospect. “I wanted to be out [of Mexico] before something really bad happened,” he says.
If I was a gambler I would put my money on Mr. del Rio staying, even though he hasn't hired even one of the 10 people that is stipulated by the terms of EB-5. In that two year time frame he and his wife could have an anchor baby, and that's all they will need to stay in the USA. Very few EB-5 visa holders get kicked out of the country for violating the investment terms of the visa, so even without the anchor baby they most likely will find an excuse to stay.
Of course we can't judge EB-5 with just one example, and fortunately the CSM provides us with another one—this time a Mexican with a jewelry bead store. His employee count is about a dozen people in three different shops, so he employs over the required minimum of 10—assuming all of his employees are legal.
So, here is the real reason the Mexicans are using EB-5:
Luis Escobar, owner of EGA Direct, a private consultancy that similarly reaches out to potential immigrant investors. He moved to San Antonio after being kidnapped twice in Mexico. He estimates that 80 percent of his clients want to move for security concerns. “I have a client without a foot. I have a client without a finger. We have clients without one member of the family,” he says.
Escobar claims to have a very good success rate. If he continues to bring Mexican EB-5s into Texas, we should soon see the unemployment rate drop to zero.
Escobar says none of his clients have had their visa requests turned down, but he’s selective. He refuses to take inquires from investors in states like Sinaloa and Chihuahua. “The probability that we ... find out a wealthy person in those states [is related to the drug trade] is very high,” he says.