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# KSAs and the math wiz RC dismissal

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### KSAs and the math wiz RC dismissal

1. 1. Page 1 of 3Last But Not Least Discussion On RecentAAO Regional Center DismissalsBy Joseph P. Whalen (September 14, 2012)In this third and final installment, I will offer some observations on the AAO non-precedent Regional Center Appeal Dismissal of November 10, 2010. This caseoffers an opportunity to first discuss economic analysis, misinterpretation of data,and extremely poor math skills by a non-economist who seems to have no sense.As an added bonus we can see some prohibited concepts and language in a LimitedPartnership Agreement. Let’s get started, we’re in for a bumpy ride.I’ve said it before and I’ll say again, it scares me to see such clueless people tryingto get into EB-5. There is actually someone out there that believed that it ishumanly possible for one person to work 167 hours per week. Do the math!24 hours per dayx 7 days per week168 hours per week- 167 hours per week1 hour per week of rest (time off) = 60 minutes ÷7 days = 8.571...That means this worker is allowed approximately 8 ½ minutes of rest per day!I am not kidding, someone really put forth the notion that one person could work167 hours per week and then based all their staffing requirements and jobprojections for a hypothetical motel on that bizarre premise! “Garbage in, garbageout” was never this easy to illustrate before this decision hit the USCIS website!“As an example, the analysis examines a proposed 65 room motel project. The size of theprojected hotel is 43,968 square feet. Using the same DOE table referenced above, theanalysis states:[T]he mean square feet per worker for lodging is 2,074. This means that the43,968 square foot motel would support 21.2 direct employees each of whomwork an average of 167 hours per week. Rather than one employee working anaverage of 167 hours per week, it is more realistic to have 4.8 (= 167/35)employees each of whom works 35 hours per week. Thus, the total number ofdirect employees that would be needed for the motel are 101.8 (= 21.2 x 4.8).”I have combined three items that belong together. I wrote two and one is an AAO Dismissal ofRegional Center appeal. If you take the time to read them then you will understand why I put themtogether! I discuss the case, include the case and a follow up article. Enjoy!
2. 2. Page 2 of 3The non-economist who came up with these numbers pulled them off a table foundon the internet. Remembering that this decision is dated November 10, 2010, andgenerously assuming that it was prepared over one year prior that would mean thatthe “data” used as “input” was “found” in early 2009. The kicker is that the tablethat the misinterpreted numbers were pulled from is dated as of 2003. So, it wasover five (perhaps closer to six) years out of date in 2009.Having now seen the level of “quality” that USCIS was deluged with, maybe theEB-5 Stakeholder Community should cut them some slack. Does anyone want todefend this attempt to obtain Regional Center Designation? Is anyone willing topublicly take ownership of the Proposal upon which this particular AAO Decisionis based? I didn’t think so!Wait, it gets better, or worse, depending on if you are getting a laugh out of this ornot. This math wizard and frightful philosopher misconstrued several differentpieces of “data” that were pulled from the table (s)he found on the internet. AAOtried to explain what the table really indicated. Here is merely one small excerptfrom AAO on this topic.The title of the table references hours of operation and the table itself references meanhours per week. Thus, the mean hours per week must refer to the hours of operationrather than the mean number of hours per employee. Given that there are only 168hours in a week, it cannot be concluded that the table demonstrates that the mean hoursper week per employee is 167. Nothing on the table suggests that the square footageper worker represents square footage per worker during a given shift only rather thanas a function of total employment.And now for something completely different, a man with three buttocks! {I am aMonty Python fan and any others out there will hopefully, “Get it”.}Seriously, let’s now turn to the added bonus of the “terms that raise concern” in theLimited Partnership Agreement. What could possibly be wrong with that?Beyond the decision of the director, the proposed limited partnership agreement hasterms that raise concerns. First, the capital contributions section, 3(b), provides thatlimited partners may contribute "services." The regulation at 8 C.F.R. § 204.6(e) definescapital as "cash, equipment, inventory, other tangible property, cash equivalents" andcertain indebtedness. The regulation at 8 C.F.R. § 204.6(j)(2) does not allow qualifyinginvestor pursuant to section 203(b )(5) of the Act to establish an investment through thecontribution of services.
3. 3. Page 3 of 3In addition, the full amount of the requisite investment must be made available to thebusiness most closely responsible for creating the employment upon which the petition isbased. Matter of Izummi,22 I&N Dec. 169, 179 (Commr. 1998). Section 3(c) of thelimited partnership agreement allows any amounts "not required for purposes of itsbusiness, including reasonable reserves for contingencies" to be distributed. Section 5(b)provides for the distribution of funds unrelated to profits, which are discussed in section5(c). These sections, which provide for distributions of funds above and beyondprofits, raise concerns that the investors may not be placing the full investmentamount at risk.For those who are still not clear on the basics, I will spell out a couple of keypoints. The Regional Center exists ONLY within the Pilot Program. The Pilot Program permits Regional Centers to exist for the purpose ofconcentrating pooled investments in larger projects. Those pooled investments are meant to include a mix of domestic or othernon-EB-5 funds (even institutional investors) funds, as well as EB-5 alieninvestors’ funds. IF, and that is only IF, any “reserves” or “cash on hand” were needed, theyshould come out of the non-EB-5 investors’ share BECAUSE the non-EB-5investors are NOT under a legal obligation to make a truly “at risk”investment of a statutorily prescribed minimum amount in exchange for anImmigrant Visa. ALL jobs created by the WHOLE Project are freely available for allocationto the EB-5 investors alone BECAUSE the non-EB-5 investors don’t needthem for purposes of lifting conditions from status; and probably couldn’tcare less about them even if they tried.That’s my two-cents, for now.e-mail me at: joseph.whalen774@gmail.com