EB-5 Risk Alert: US Congresswoman Affirms Dispute May Harm Company

American Logistics International Regional Center has recently come under the close scrutiny of federal and local elected officials.

In recent weeks, government officials representing the US congressional and city council districts where American Logistics is located and does business have sent letters to American Logistics’ owner, Mr. Alireza Mahdavi, expressing their concerns about the deteriorating situation between management and workers at the company.

The central issues raised by these government officials are matters of common concern to EB-5 investors, as they point out the detrimental effect that unresolved labor disputes can have on a company and its stakeholders. In a letter dated April 17, 2013, U.S. Representative Janice Hahn urged American Logistics to comply with U.S. law and respect its workers’ rights.

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In her letter, she stated, “I hope that your company will do everything possible to remain neutral and help avoid the types of labor disputes that traditionally result from management’s interference with workers’ rights.”

Further, Congresswoman Hahn underscored the negative impact that a protracted labor dispute can have on a company, saying, “Such disputes have proven to impair the health of the company, the workers, and the regional economy.” This confirms previous concerns that this sort of issue poses a particular risk to EB-5 investors, whose investments depend on stable job creation and maintenance.

U.S. Representative Hahn represents the 44th Congressional District, which covers the communities surrounding the Los Angeles and Long Beach ports, including Carson, CA, where American Logistics International is located. Through her role as co-chair of the Congressional Port Caucus and a member of the Transportation and Infrastructure Committee, she is responsible for oversight of key sectors in which American Logistics’ business is focused.

Representative Hahn’s cautionary letter to American Logistics is not the first. It comes on the heels of a March 28 letter from Carson City Councilman Mike A. Gipson. He also recommended that the company avoid a drawn-out conflict. He stated, “Drivers seek to improve their conditions at the workplace, and to make your company – their company – a better and more successful place for all stakeholders, workers and management alike.”

These recent admonitions from elected officials may reflect a weakening relationship between American Logistics and the elected officials that represent the city and district it operates in. As you well know, local and regional government support for a regional center is a key factor that EB-5 stakeholders consider when evaluating potential investments.

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