Visas on a production line: A 1990 law created a program that has
made millions for companies that lure high-tech immigrants
pursuing the American dream. For some immigrants, the reality is
indentured servitude.

How many H-1B visas? INS admits it might have issued 15,000 more
visas than allowed by law last year because of computer
programming errors.

Give me your tired, your poor, Your huddled masses yearning to
breathe free.

Over more than half a century, 12 million immigrants streamed
into America welcomed by the words of Emma Lazarus engraved at
the base of the Statue of Liberty.

But welcoming the tired and poor was hardly on the minds of a
small group of former government officials who helped design an
immigration program to attract wealthy foreigners who could
obtain prized green cards by investing $500,000 to $1 million in
U.S. businesses.

The investor visa program was a little-noticed part of the
Immigration Reform Act, a sweeping law that reshaped the
country's immigration policies.

President George Bush called the law "the most comprehensive
reform of our immigration laws in 66 years." It was, he said as
he signed the bill into law on Nov. 29, 1990, "good for families,
good for business, good for fighting crime and good for America."

While his predictions may yet come true, a review of the
decade-old law shows that it has benefited one group not
mentioned by the president -- former INS officials and their
associates who have pocketed millions in fees from wealthy
foreigners willing to invest their savings to join in the
American dream.

In the rush to cash in on the law, the visa vendors have left a
trail of victims -- from families seeking a new beginning in
America to struggling companies needing a promised infusion of
cash to keep their workers employed.

Now, many of those families are facing the threat of deportation,
while many troubled companies that were promised a boost from
immigrant investors have closed their doors, leaving hundreds of
workers unemployed.

An investigation by The Sun has found:

   Some of the former INS officials who have profited most
   from the visa vending business were instrumental either in
   formulating the program or lobbying for favorable
   interpretations of the program rules that aided their
   businesses, at times working with the same INS staff
   they once directed.

One of the most active participants in the visa vending has been
Gene McNary, INS commissioner from October 1989 to January 1993.
By his estimate, after leaving the federal government, McNary
acted as the attorney on 200 to 250 applications for the program.

The immigration act's main sponsor in the House of
Representatives, Rep. Bruce A. Morrison of Connecticut, went into
business with a California immigration consultant to market the
investor visa program within days after his congressional term
ended. Morrison's agreement was dated Jan. 22, 1991, the month he
left Congress.

Former officials such as McNary, former INS general counsel
Maurice Inman and Diego Asencio, the former U.S. ambassador to
Colombia and Brazil, had extraordinary access to and incessantly
lobbied former colleagues in the government for preferential
treatment and obtained a series of highly favorable but
questionable rulings on the requirements for the program that
only years later were reversed.

"Diego Asencio, Mike Inman, Gene McNary are allowed to roam the
Visa Office and INS whenever they please," lamented one
frustrated State Department official in a memo that questioned
the propriety of the former officials' activity. "They often just
drop in without any warning and they walk about the building like
they still worked for the USG [U.S. government]. I feel like a
very small but chubby mouse between two very hungry and big
tomcats."

The law required that immigrants invest $1 million in new or
troubled U.S. businesses, or $500,000 in a business located in an
area of high unemployment. In many cases, only a small fraction
of the total -- often just $10,000 per investor -- went to the
struggling companies.

The intent of the law was that each immigrant's investment would
create or preserve at least 10 American jobs. However, some of
the faltering companies have closed and laid off workers, with at
least one filing for bankruptcy. Elnor Bailey's clothing factory
in Alabama was the sort of business the program was designed to
help. But she received only $50,000, not enough to keep the
factory from closing last fall. She was never told she was
entitled to substantially more money. "It makes me angry," she
said. "It really does."

When the INS finally did crack down on program abuses in December
1997, it did so with a vengeance, leaving hundreds of people in
limbo -- including many immigrants who had tried to follow rules
in effect at the time. As a result of that reversal, hundreds of
immigrants who thought they had found a legitimate way to live in
the United States are facing not only the loss of their
investments, but possible deportation.

"I saw the United States as my final shore," said one immigrant
investor, Mario Carbini of Italy. Now, he said, "I don't know if
I'm living a nightmare."

Government officials who balked at approving questionable
arrangements were ignored, or worse. Instead of having their
concerns taken seriously, they were told "just issue the frigging
visa," said Melissa Arkley, a State Department official who
helped to administer the investor visa program.

Even the former INS official who for years was at the center of
the program's implementation acknowledges that it is deeply
flawed. "My overall sense is that it's a mess," said Paul W.
Virtue, who was general counsel for INS.

America for sale The investor visa program was controversial from
the start.

Ten years ago, after the legislation was introduced, Rep. Doug
Bereuter, a Nebraska Republican, warned: "If the [Senate] has its
way, 4,800 foreign fat cats would be permitted to buy their way
into American citizenship, contingent upon their employment of 10
American workers for at least two years.

"The issue goes to the heart of what we, as Americans, and our
nation are all about," he told House colleagues. "This member
would deeply regret to learn that our principles, our values and,
indeed, American citizenship itself, is for sale to the highest
bidder."

Former Democratic Sen. Dale Bumpers of Arkansas, a longtime
critic, said recently: "Under the best of circumstances this was
a terrible idea. It was just an outrageous concept to me."

Under the program, known technically as EB5, up to 10,000 visas a
year can be issued to investors and members of their family who
invest $1 million in a U.S. company for the purpose of creating
10 jobs. A smaller investment of $500,000 qualifies if the
investment is made in rural or high unemployment areas.

Investors who qualify get a conditional green card for two years
and then a permanent green card if INS is satisfied that the
investment is still in place and was not fraudulent.

Although some 80,000 investor visa petitions could have been
approved since the law was passed, only 3,547 petitions were
approved through 1999, according to INS data.

While the law creating the investor visa program was passed in
1990, the effort to win approval began years before.

"This one provision," declared Illinois Democrat Paul Simon
during a 1986 Senate debate, "will generate over $8 billion
annually in new investments in small and independent U.S.
businesses, and provide up to 100,000 new jobs for Americans."

The impetus for the visa program came from a similar strategy in
Canada that was attracting millions of dollars from wealthy Hong
Kong residents. Why not have some of that money come to the
United States, supporters argued, especially since the country
was suffering through an economic downturn.

Though the legislation failed in 1986, it was renewed in 1989 and
in 1990, when the investor visa program was included in a massive
immigration bill. A House version was filed by Rep. Bruce
Morrison, a Democrat who chaired the subcommittee on immigration.
The Senate version was filed by Sen. Edward M. Kennedy, a
Massachusetts Democrat.

Changes in the immigration law had been recommended by a
commission chaired by the Rev. Theodore M. Hesburgh, former
president of Notre Dame University.

"It smacked of being able to buy citizenship," said Hesburgh
recently.

"I think I was the only one who voted against it. I just didn't
feel right about it."

During the brief House debate on the measure, Rep. John W.
Bryant, a Texas Democrat, expressed strong objections.

"This provision is an unbelievable departure from our tradition
of cherishing our most precious birthright as Americans," said
Bryant.

"Have we no self-respect as a nation? Are we so broke we have to
sell our birthright?"

Even the bill's sponsor expressed reservations. The idea "leaves
a bad taste in my mouth," Morrison said. But "there is a lot of
foreign investment going on right now. Who do you want, someone
who puts down roots or just puts down his money?"

Court records show that Morrison, who was leaving Congress after
an unsuccessful bid to become governor of Connecticut, went into
business with a California immigration consultant named Maria
Hsia. His job was to market the investor visa program to foreign
investors.

His contract, dated Jan. 22, 1991, called for payments of $10,000
per month for six months. Morrison contends that Hsia owes him
$20,580.50 in salary and expenses.

Morrison, who now heads the Federal Housing Finance Board, said
he saw nothing improper about going into the business after his
term as long as he did not try to gain preferential treatment
based on his former position.

"No, it is not wrong," said Morrison. "What was I supposed to do
for a living?"

On March 15, 1991, Morrison's press secretary, Paul Donnelly, set
up a company in Hyattsville called Investment Immigration
Consulting Co. Its purpose, according to Maryland records, was to
provide consulting and other services related to the investor
visa program.

Harold Ezell, Western regional INS commissioner from 1983 to
1989, ran an investor visa consulting business in Orange County,
Calif., before his death in 1998.

"We've done a great job on boat people. I see no problem with a
few yacht people," Ezell said in 1991, soon after the law went
into effect.

But the efforts of Morrison, Donnelly, Ezell and other insiders
would soon resemble a skiff alongside an ocean liner. The
investor visa program was about to get a boost from a major new
player called American Immigration Services, a Greenbelt firm
formed by a local real estate developer.

State records show AIS was incorporated in Maryland on Feb. 8,
1991.

Soon, its board of directors boasted a who's who of the
politically connected, including Diego Asencio, a former
ambassador and assistant U.S. secretary of state for consular
affairs. Bryant, the vehement critic, was recruited as a board
member at $20,000 a year.

Bryant said he was recruited by Asencio precisely because of his
opposition.

"Diego thought that since the enterprise was going to ask the
investors to put up their money and they would have to trust the
company, my having been a critic might help their credibility,"
said Bryant, who is no longer on the AIS board.

Also on the AIS board were William Clark Jr., a former ambassador
and State Department official; Prescott S. Bush, the brother of
the president who signed the 1990 law; and Jack F. Matlock Jr., a
former ambassador. McNary, the former INS commissioner, was
signed up as legal counsel. The first INS regulations governing
the investor visa program were issued under McNary's signature on
Nov. 29, 1991.

The owner of AIS was Donald Laskin, a Maryland developer, who
soon after AIS was formed became the subject of a federal
investigation. In October 1996, Laskin pleaded guilty to bank
fraud in a Prince George's County land deal. He declined to
comment for this article.

By all accounts, the investor visa program got off to a slow
start. For the first two years there weren't many applications --
nowhere near the 10,000 per year allowed under the law.

But internal memos and other records show it was not long before
efforts were under way that would open the floodgates to
applications. Leading those efforts was a small group of former
INS officials, along with Asencio -- all, at least initially,
affiliated with AIS.

According to court records, Maurice Inman, a former general
counsel at INS, quickly emerged as an important player. He
appeared initially as an adviser to AIS and would reappear as a
key figure in a rival company.

Two other AIS representatives, Asencio and former INS
Commissioner McNary, became familiar figures in government
offices dealing with the program.

Wearing his adviser's hat, Inman turned to Paul Virtue, who had
been hired by Inman before he left the INS in 1986. Virtue was to
emerge as INS' expert and the key administrative decision-maker
on the investor visa program.

"Paul Virtue, who I knew extremely well, became the
decision-maker, the boss," Inman said.

Every time we put a deal together, Inman said, we'd take it to
INS and go over it in detail before formally submitting it. He
said someone from INS -- he didn't know who -- had given his name
to prospective investors.

The Virtue rulings Occasionally during discussions with INS,
agency officials would recommend a change and "we would comply,"
Inman said. "You've got to have predictability. People are
putting their lives and their savings on the line."

"Predictability" came in the form of two key legal opinions
issued by Virtue on Sept. 10, 1993, and June 27, 1995. The memos
were to completely change the shape and scope of the investor
visa program -- and became a boon to AIS.

The rulings stated that investor visa applicants could pool their
money and form limited partnerships. Immigrants could meet
investment requirements without putting all the money up in cash.
A promissory note could be used.

Making the program more appealing, the rulings allowed investment
agreements to include provisions ensuring that investors would
not lose money. Initially, applicants need put up only $125,000
in cash, not the $500,000 or $1 million spelled out in the law.

Under Virtue's rulings, investors could get permanent green cards
before being required to follow through with the full amount of
the investment.

The result was that investors could put up $125,000 and promise
to pay the rest, knowing that they would never have to do so.

The effect of the rulings was reflected in INS statistics. In
1995, 417 investor visa petitions were filed. In 1996, the number
rose to 801, and in 1997, to 1,496.

The flood of approved investor visa programs included that of a
firm called Wall Street Financial Corp., based in Hawaii.
According to filings with the Securities and Exchange Commission,
the company attracted more than $1 million in investments through
the investor visa program. Wall Street Financial, records show,
invested that money in a multimillion-dollar resort in Belize,
not in businesses in the United States.

Gerhard Walch, the firm's president, said the program was
approved by the INS. He failed to respond to requests for further
information, including the number of Wall Street Financial
investors who obtained green cards. INS officials declined to
comment.

The sudden surge of investor visa applications and approvals
triggered concern in the Department of State, where consular
officers were required to review the applicants.

A perception was growing among State Department officials that
the rules were being bent to accommodate a small group of former
INS officials, according to interviews and State Department
cables, e-mail and other documents obtained by The Sun. Those
memos questioned the legality of the AIS investments, comparing
the operation to a Ponzi scheme.

"Bill, you should know that Diego Asencio, Mike Inman, Gene
McNary are allowed to roam the Visa Office and INS whenever they
please," Sylvia L.

Hammond, a State Department official, wrote to William Martin,
then a consular officer in Tokyo, on Feb. 14, 1997. "They often
just drop in without any warning and they walk about the building
like they still worked for the USG [U.S. government]. I feel like
a very small but chubby mouse between two very hungry and big
tomcats."

Another State Department official, H. Edward Odom, wrote to
consular official Wayne G. Griffith: "Everyone in the department
and in INS who has come into contact with these cases has
immediately detected the odor of them."

"Again, nobody likes the situation, especially having to deal
with cases which are pushing the envelope on legality and which
also involve the former head of CA [consular affairs]," referring
to Asencio. "We are all uncomfortable."

In a Valentine's Day 1997 e-mail to Donna Hamilton,
then-principal deputy assistant secretary of state for consular
affairs, Griffith complained that INS and the State Department
were "caving in" to "heavy political pressure."

As one example of how the former INS officials were able to get
their way, State Department visa official Melissa Arkley
described a September 1997 meeting attended by AIS attorneys
William Cook and Gene McNary, the visa office and the INS.

At the meeting, Arkley wrote: "AIS representatives made a number
of assertions which INS, led by Paul Virtue, appeared to accept
without question. ... Among other statements, Mr. Cook
characterized the EB-5/T-5 program as 'selling green cards' with
the only problem being the price at which the government was
selling them."

Arkley wrote that AIS officials boasted about their conversations
with Virtue.

"They have frequently asserted that they had 'just spoken to
Paul' or that Paul Virtue had 'promised' them that their investor
agreements were in full compliance with the current regulations,"
she wrote.

Arkley, a consular officer in the State Department's central
office for two years ending in mid-1999, said her colleagues
failed to respond to concerns about the investor visa program
coming from embassies around the world.

"We rolled over and played dead," Arkley said. "Not only did we
not advocate [on behalf of consular officers], we put our foot on
their throats and told them to shut up. 'Cease and desist! Just
issue the frigging visa,' is what we told them."

Finally, though, the drumbeat of opposition within the INS and
State Department led then-INS general counsel David Martin to
issue a memo on Dec. 19, 1997.

The opinion struck down many of the rules issued by Virtue,
including provisions that ensured that final payments would never
have to be made, the use of a portion of the immigrant's
contribution to pay expenses such as attorney and finder's fees,
and the guaranteed return on the cash portion of the investment.
The ruling tightly restricted the use of promissory notes.

Even after the Martin ruling, concerns about preferential
treatment were raised within INS. "There continues to be a lack
of serious will by this office to address squarely and in a
forthright manner the ongoing ethical problem created by
providing inordinate access to former INS officials," INS
attorney S.

Alexander Gisser wrote in a May 15, 1998, memo to his boss, David
Dixon. "This type of special accommodation should stop, once and
for all."

The memo concluded: "I hope you haven't forgotten that it was the
Office of General Counsel which, in large part, created this mess
by accommodating these officials inappropriately in the past."

Inman had been warned that rule changes might be in the works, but
said the Martin memo caught him by surprise.

"When I heard about the memo, this got my attention in a big way,"
Inman said. "They [INS] kept telling us to cool it. Don't worry."

He first called Paul Virtue, whom he said had assured him repeatedly
that any changes would not be retroactive. Inman said Virtue
"reiterated the promises that had been made by him that the rules
would not be changed."

But the changes did come. And they were retroactive.

In a series of "precedent rulings" in 1998, INS made the reversal
official, striking down applications involving types of
promissory notes, guaranteed investment returns and other key
elements of the AIS programs.

Inman said he learned around that time that Virtue, who had
become the subject of an internal investigation by the INS
inspector general's office, had been taken off the investor visa
program.

Virtue said he has heard nothing since being interviewed by the
inspector general's office several months ago about its probe
into allegations that he might have been unduly influenced by
former INS officials. Virtue said his recusal was voluntary and
not related to the investigation.

By the time of Virtue's recusal, Inman had stopped working with
AIS and joined another investment visa firm, American Export
Partners. Inman said he disagreed with AIS officials' decision to
limit the initial investment from visa applicants to $125,000.

"We parted over the decision to embark on the $125,000 program --
$125,000 was not enough. Our clients [firms seeking investment
money] needed more," Inman said.

American Export was also hit by the INS rulings, and its lawyers
filed suit last spring in U.S. District Court in South Carolina
alleging that the new policy contradicted at least four written
opinions from the INS administrative appeals office and "promises
and representations" made by INS.

Among other documents, the lawsuit cited Paul Virtue's 1993 and
1995 memos.

Asked in an interview how often he received assurances from INS
officials that his programs were in compliance, Inman said:
"Maybe 30 or 40 times."

But Inman insists that his access was proper and of little
consequence compared to that of McNary.

"I knew who to call, but that's the only benefit," Inman said.
"McNary had a hell of a lot more contacts than I ever dreamed of
... and more current contacts than I ever dreamed of."

"My connections were current because I left INS after he [Inman]
did," McNary said.

The former INS commissioner said he waited more than a year after
he left INS in early 1993 before becoming involved in the immigration
business. A one-year wait is required under federal law.

"I probably talked to Paul [Virtue] three or four times -- a
couple of times about the investor visa program," McNary said.
"They were changing the rules and I was just trying to find out
what they were doing."

'McNary's baby' But McNary's efforts on behalf of AIS were not
limited to calls and meetings with Virtue. An internal memo
written by Dennis Janda, an official at the INS service center in
Dallas, recounts a series of key events for AIS and underscores
the role McNary had played in shaping the investor visa program
while he headed INS.

In the memo, written in April 1996, Janda recounted discussions
at INS headquarters in 1991 in which top INS officials referred
to the investor visa program as "McNary's baby" and said McNary
"was basically scripting the direction of this program."

Janda said in the memo that he was not surprised to learn of
McNary's involvement when a key AIS investor visa application
landed on his desk in the summer of 1995. The case was important
because once it was decided, it would determine the fate of
hundreds of AIS applications to follow.

Janda, according to the memo, did not believe the application met
"the letter or spirit" of the law. At the urging of superiors, he
phoned McNary at his St. Louis law offices to discuss it.

Describing McNary as "the moving force" behind the program, Janda
wrote that McNary assured him that he had run the proposals by
the head of the INS unit that would ultimately hear any appeal in
the case.

Even after McNary submitted additional materials, Janda did not
believe the AIS application met requirements.

According to Janda's memo, he spoke with the head of the appeals
unit, who affirmed McNary's statements.

"I prepared notes to the file at that time regarding that
important discussion, and by default, approved the case as there
would be no point in subjecting our office to needless
criticism," the memo states.

McNary acknowledged speaking with Janda and sending him copies of
earlier approvals. He said he was simply doing his job. "I was an
immigration lawyer at that point," McNary said.

Asked if he got preferential treatment, McNary, who is running
for Congress from Missouri, said: "Absolutely not. To the
contrary, not only was it arm's length, it was an extra step I
had to go through to ask for a meeting."

As a private attorney, McNary markets the expertise he gained as
INS commissioner. A Web site for McNary's law firm states: "Mr.
McNary returned to the private practice of immigration law armed
with a unique knowledge and understanding of immigration law and
the operations of the federal agency which regulates and
administers these laws."

Virtue, now in private law practice, strenuously denied giving
favored treatment to Inman, McNary, companies they represented or
any of the other firms in the investor visa program.

"There were allegations that I was unduly influenced by people
representing companies in the program. I certainly deny
unequivocally that there was special treatment," he said.

Virtue acknowledged signing the two memos but said he did not
prepare them, a task he said was performed by members of his
staff.

Virtue acknowledged the meetings with Inman, McNary, Asencio and
others, and the frequent phone calls from Inman. "Mike Inman
probably called me four or five times a day," Virtue said.

Asked if he assured Inman that any rule changes would not be
retroactive, Virtue replied: "To the extent I could assure him at
all, I felt we would be publishing new regulations. ... He gives
me credit for more authority than I had."

If he were to do it again, Virtue said, "I don't think I would
have entertained any direct contact or meetings with people
representing those companies. I would have made it clear [that]
the general counsel's office is in the business of providing
legal advice to our clients. ...

While I tried to make that clear, I would have put it in writing
on the side of a building somewhere."

Virtue said it was his belief at the time that the AIS programs
"technically" complied with the law and regulations.

"Yes, clearly, they were taking advantage of the regulatory
scheme as much as they possibly could," he said.

But there were those inside INS who said Virtue's rulings created
the problem.

"Virtue's interpretations invited the abuse," said Benedict J.
Ferro, former regional director in Baltimore. "They never made
sense. They were inconsistent with the law."

Splitting the fees The companies and their principals were
generating lucrative fees for themselves and their associates. In
a lawsuit in U.S. District Court in Baltimore, a former AIS
employee alleged that the firm's programs provided only $10,000
per investor to businesses, a small fraction of the $500,000 and
$1 million required by law.

In a lawsuit alleging that AIS defrauded the government, Joaquin
A. Tremols, who worked for the firm from Sept. 25 to Dec. 11,
1995, said investors were required to put up only $125,000 in
cash -- and that only $10,000 went to troubled companies.

According to the lawsuit, of the $125,000, $10,000 went to
McNary's law firm for legal fees; $15,000 was a finder's fee to
the person who recruited the immigrant investor; $25,000 went to
AIS for administrative and other fees; $65,000 went into a trust
account; and $10,000 went to the troubled business.

"The trust account," Tremols' lawsuit states, "guaranteesx each
investor a 10 percent return on their investment per year."

Based on the 120 enrolled investors, the lawsuit estimates that
$58 million that should have been invested in American businesses
never was.

The lawsuit alleges that McNary acted in a dual role -- as legal
adviser to AIS while simultaneously providing legal services to
investors who paid him a $10,000 fee. McNary refused to discuss
fees, but acknowledged handling 200 to 250 investor visa
applications.

Based on those figures and the fees alleged in the Tremols
lawsuit, McNary and his law firm could have collected legal fees
of $4 million to $5 million.

A copy of McNary's standard contract with investor clients was
attached to the Tremols lawsuit. It includes a provision under
which clients agreed to allow McNary's firm to represent both
parties.

Tremols, who dropped his lawsuit late last year, declined to
comment.

State Department cables that detail the AIS transactions
corroborate the figures in the lawsuit. Had he won the case,
Tremols could have received a portion of any damage award
assessed against AIS.

William Cook, a former INS general counsel who represents AIS,
defended the firm's actions and said that because of uncertainly
created by the INS policy shift, further payments from investors
to the companies were never made. Asked repeatedly to provide an
accounting of how much money was provided to the companies, Cook
never responded.

Cook, like other AIS officials, attributes the INS action, in
part, to jealousy.

"There were a number of former INS people who made a reasonably
large amount of money in this program," said Cook. "McNary made
millions. Inman made millions."

Rhetoric and reality In October 1995, McNary and other AIS
representatives held a news conference in Selma, Ala., to
announce that up to $25 million would be invested in local
textile companies under the investor visa program.

They said the money would give a much-needed financial boost to
two Selma companies, Denim Specialists and Dallas Manufacturing,
and help preserve 500 jobs.

McNary was quoted in a local newspaper as saying that although
the initial investments wouldn't be large, "there is a potential
for $25 million over the long haul." Although the program had
been slow in getting going, he said, "we're over the hump and
will be able to preserve those jobs."

That was the rhetoric. This was the reality.

In 1996, Denim Specialists filed for bankruptcy after being
evicted from its factory.

James Utsey of Selma, the owner of Dallas Manufacturing and two
other textile firms, was present at the news conference that day.
He said he was repeatedly rebuffed in efforts to get more than
the $100,000 initially provided by AIS, which he said was in the
form of a loan. The payments apparently represented the
contributions of 10 investors.

"We had a fairly heated argument," said Utsey, outside his now
dark and abandoned factory, recalling a conversation with AIS
officials.

Eventually, AIS wouldn't return his phone calls.

Asked if he was aware of what became of the companies in Alabama,
McNary said he did not know.

When Congress established the investor visa program, it was with
struggling businesses like Bailey Creations in mind.

Elnor Bailey, now 74, started her company 13 years ago, partly to
provide jobs for neighbors in the depressed rural town of York,
Ala., near the Mississippi border. By the mid-1990s, she was
running out of cash and afraid she might have to close her
factory and lay off workers.

Then she heard about the investor visa program. A talk with an
AIS representative offered encouragement that she'd be able to
keep her business going.

Bailey said she received $50,000, which helped for a while. But
bills mounted, and Bailey closed her company last September and
laid off its 75 workers.

Her factory sits idle. Patterns for the women's and children's
clothing that once poured off the assembly line hang on the
walls. Dozens of sewing machines are stacked at one end, covered
in cobwebs.

Months after her plant closed, Bailey learned that more than
$500,000 that could have kept her business alive was sitting in
escrow in a bank account she couldn't access and hadn't known
existed.

"I didn't know there was any rest of the money," she said. "I can
promise you if I had gotten $500,000, I would be in business."

State Department cables show government officials knew in 1997
that only a small fraction of the money was going to Bailey's
company, while AIS legal and administrative fees ate up five
times that amount.

"My mind keeps going back to 'It's the government,' " said
Bailey. "They should have been doing their job. You just can't
put a program out there and not monitor it."

© Baltimore Sun published on Feb 20 2000