Campaign contributions: bar recipients of federal aid and government subsidies ... by gimleteye

Here is a question: should homebuilders or a local bank-- take US Century Bank and Century Homebuilders for instance, its employees, executives and board -- both receive federal taxpayer bailouts and the benefits of attracting investors through the incentive of the green card/immigration program, also be allowed to give gifts to elected officials and contributions for political campaigns? What is the difference between a homebuilder, like Century, or the military using green cards as an incentive for participation in its activities? To the extent banks or other industries employ federal tax dollars and policies like immigration and citizenship incentives, their employees are already agents of government policy and should be prohibited from political gift-giving.

The usual argument is that selectively prohibiting individuals from making political donations who are associated with a bank, homebuilder or automobile manufacturer is a violation of Constitutional rights. On the other hand, the political influence of industries that now require federal bailouts and other federal policy incentives is what created our national emergency in the first place. This proposition turns on its head the radical proposition that self-interest motivates industries to regulate their own behavior-- in service of sustainable profitable markets-- better than laws. If routine influence peddling by special interests had been prohibited, the worst economic crisis since the Depression would not have occurred.


Posted on Wed, Aug. 19, 2009
Builder seeks funding from abroad

BY MONICA HATCHER
mhatcher@MiamiHerald.com

In a bid to raise $50 million to complete a project in Doral, Century Homebuilders, one of South Florida's largest home builders, said Tuesday it was launching an investor visa program that offers green cards to foreign nationals who invest in U.S. businesses.
The EB-5 investor visa program opens a pathway to residency and citizenship to foreign nationals and their families who invest $500,000 to $1 million in an approved investment program that creates jobs for at least 10 U.S. workers.

In March, Citizenship and Immigration Services included Miami-Dade and Monroe counties in a pilot program that makes the process smoother by allowing investors to satisfy the employment requirement indirectly. Typically, visa applicants must show that 10 jobs are created as a direct result of their business activities.

Century Homebuilders is banking on the lure of a visa to raise $500,000 from at least 100 foreign nationals. The funds will be used to finish developing the 350-acre site at its Century Grand community in Doral, creating jobs for 1,300 workers in the process.

The planned traditional neighborhood development envisions a city within a city -- 4,500 homes built around a town center and in close proximity to schools, parks, shops and a church. So far, buyers have put down deposits for 542 homes.

``I am not just selling visas here,'' said Sergio Pino, president and chief executive of Century Homebuilders, ``We have the real deal here. In the worst case scenario, this project will make a lot of money.''

Pino, a Miami-Dade developer for more than 20 years, said the company began exploring the idea of launching an investor visa program about six months ago, but shelved the plans thinking the credit markets would improve.

Since then, financing conditions have worsened, Pino said, with banks virtually cutting off credit to home builders because of the real estate downturn.

Lenders, including several national banks, that had partnered with the company in the past on more than 53 South Florida communities had either closed or stopped lending, leaving Pino with few options.

``Either I put a fence around this community and do nothing or I move forward with the options that are available, like the EB-5 program,'' Pino said.

Pino's plans are building on efforts of other local developers and entrepreneurs to attract foreign capital to the region by setting up investor programs that offer a visa.

Immigration lawyers David Hart and Eric Gould are facilitating a visa program for Miami developer Arva Jain, who is seeking to raise $12 million to build out 45,000 square feet of commercial space attached to the Marina Blue condominium, 888 Biscayne Blvd.

Marketing of $500,000 investment packages -- through foreign immigration agents in Venezuela, Colombia, Mexico, Taiwan, China, Russia -- begins at the end of the month.

Visa investment programs are also under way in Palm Beach County and Orlando.

Some immigration lawyers warn that foreign investors should closely vet the financial soundness of EB-5 programs before committing, citing a history of fraud and shoddy underwriting.

In a preliminary economic impact study, Pino said the development of Century Grand would create more than 1,300 jobs within six months of securing funding from investors as planned.

He also hopes foreign investment will provide a platform to raise further capital to finish the project.

So far, only the initial groundwork for the investor visa program had been laid. The project must still be approved by Citizenship and Immigration Services. The process takes about six months.

If the application fails to meet the requirements for the minimum investment of $500,000 under the EB-5 pilot program, Pino said he will still move forward with investments of $1 million or more.


© 2009 Miami Herald Media Company. All Rights Reserved.
http://www.miamiherald.com

Posted on Sat, Aug. 08, 2009
Bank gets TARP funds

BY MARTHA BRANNIGAN
mbrannigan@MiamiHerald.com

U.S. Century Bank received $50.2 million in fresh capital from the U.S. Treasury's TARP program Friday, positioning the Doral-based commercial bank to expand its lending to local businesses. ``This additional capital will enable us to maintain our strong capital position, continue our course of profitable growth and meet the loan demand from quality business borrowers in our community,'' Octavio Hernández, vice chairman, president and CEO, said in a statement.
Century said its TARP application was approved in January, but the bank, which already had the financial muscle to be termed ``well capitalized,'' wanted to evaluate whether to accept the federal government's investment.

``We wanted to study it very diligently, because it does come with restrictions,'' said Sam Milne, U.S. Century's first executive vice president and chief financial officer.

The bank's leadership decided to embrace the infusion under TARP, the federal government's Troubled Asset Relief Program.

``It gives us an opportunity to grow the bank and continue to lend,'' Milne said. ``Last quarter, loans grew by more than $110 million.''

Milne said the bank had to obtain shareholder approval in late May to amend its articles of incorporation to permit it to issue preferred stock, the form of the federal government's investment. The board of directors gave the final go-ahead at its last board meeting in mid-July, Milne said.

``This gives them a war chest to do a lot of things,'' said Ken Thomas, an independent Miami-based bank analyst.

``They can continue to do a lot of lending. So many banks today aren't lending.''

U.S. Century was founded in 2002 by a group of Miami businessmen, including Sergio Pino, president of Century Homebuilders, who is on its board.

The bank, which has assets of $1.8 billion, has 24 branches and expects to open another in Doral before year end.

It posted earnings of $110,000 for the second quarter and $195,000 for the six months.

Nonperforming loans were 6.32 percent of total loans on June 30. ``We're doing better than most banks,'' Milne said.

``We still have more [troubled loans] than we want.''



© 2009 Miami Herald Media Company. All Rights Reserved.
http://www.miamiherald.com