Chinese businessmen and their families sat in the aisles and stood along the wall of a crowded Shanghai hotel conference room to hear Gov. Butch Otter invite them to move themselves and their money to Idaho.
These wealthy families had thrived in the economic reform that encouraged private investment and in 30 years turned China into the second-largest economy in the world.
Thanks to the efforts of a flamboyant Asian businessman, these families were being lured by the chance to invest in an Idaho gold mine that was once worked by Chinese miners - and by the opportunity to offer their children a new life in the United States.
"I admit the project is attractive," Lu Yue, a woman who attended a Beijing seminar, told the China Daily newspaper. "Gold is always precious. Times change, but it keeps its value."
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By the end of Otter's whirlwind weeklong trade mission in June, 20 investors had signed on to invest a total of $10 million that estimates say could create 200 jobs in Idaho. It was the first of what the state hopes will be a program that creates 1,200 jobs and brings $60 million a year to Idaho.
If it succeeds, much of the credit will go to Otter and Taiwanese businessman Raymond Ku, who made millions helping wealthy Chinese leave Hong Kong in the 1980s and, through his company Westlink, helps people across Asia immigrate to various countries.
But even if the program funnels dollars - and jobs - into Idaho, not everyone is happy about it. Some worry about selling off Idaho's treasure to Chinese.
"I think we've got to have the American people, who are American citizens, have the first opportunity to develop a business and make the country stronger," said Idaho House Majority Caucus Chair Ken Roberts of Donnelly.
A SPOTTY FEDERAL PROGRAM
The Idaho program is part of the EB-5 immigration investment program - the EB stands for "employment-based" - established in 1990 by Congress to encourage foreign investment.
The idea is that people who want to immigrate to the United States invest in "regional centers," which in turn invest in American business opportunities. The foreign investors have a shot at both profits and a green card.
It has produced mixed results.
Since the start, 95 regional centers have opened. Today only 19 are active and just 10 are what Idaho officials consider successful.
The program operated by the U.S. Citizenship and Immigration Services Agency has never reached its allowable limit of 3,000 investors and 10,000 permanent visas or green cards for people (and their families) who create at least 10 jobs.
Changes in the law have lowered the investment minimum from $1 million to $500,000 in poor areas - and allowed the investments to create jobs indirectly as well as directly.
These changes, coupled with the drop in the U.S. economy, have made the EB-5 visa program more attractive.
In 2006, just 344 of 486 immigrants who applied were approved, said Tim Counts, a spokesman for the agency that resides with the Department of Homeland Security. In 2009, 966 were approved; so far in 2010, 955 have been approved.
But how long China will continue to allow its wealthy and educated citizens to take their money and move to the U.S. is unclear. Already the government is warning residents to watch out for unscrupulous operators.
IDAHO'S FIRST TRY DIDN'T WORK OUT SO WELL
When the bottom fell out of Idaho's economy in 2007, Otter, short on cash and desperate for an economic development program, welcomed Ku and his offer to bring investors to Idaho. Otter hosted Ku at a reception at the former Simplot residence that is now the vacant governor's mansion. Later, Ku put on a cowboy hat and went riding.
In 2009, Otter made the EB-5 program and immigration investment a cornerstone of Project 60, his program aimed at increasing Idaho's gross domestic product to $60 billion.
The state's efforts stumbled at first. It recruited a Sun Valley-based business group to set up a regional center focused on funding high-technology companies. But the InvestIdaho Regional Center never got far off the ground.
"They're stagnant, they really aren't going anywhere," said Brian Dickens, who runs the EB-5 program for the Idaho Department of Commerce.
Thanks to its high-end ZIP code, it could not qualify for the $500,000 low-income-area investments, Dickens said. Several people also said the center's leaders never understood the Chinese business culture and were rude to Ku, whose network of more than 50 immigration-investment consulting firms across China was crucial to the state's effort.
Ku said in an interview only that the $1 million minimum didn't work for Idaho. Calls to the InvestIdaho Regional Center were not returned.
PRIVATE SECTOR STEPS IN
At the same time Idaho was trying to set up its regional center, investors in Blackhawk on the River, a real estate development in McCall, were in the process of setting up their own regional center. Real estate investment capital had dried up and Sima Muroff, Blackhawk's principal manager, joined with the Getty Companies to form the Idaho Regional Center.
The 33-year-old developer - the son of Russian immigrants - and his partners decided that they needed diverse investments to balance their real estate plans. When the real estate market is down, Muroff said, the gold market is up - so they began looking for gold-mining opportunities.
Opening a gold mine is a costly and risky business. It often takes years of exploration - even at an old mine site - to have enough information to win over investors for the capital necessary to mine. Then there is the permitting and the bond that must be paid to ensure future waste reclamation.
Enter Don and Candy Miller. In 2005, the Boise North End couple had bought a ghost town called Quartzburg, about three miles outside of Placerville, with the idea of turning it into a recreation or second-home development.
The Gold Hill Mine there was first opened in 1864 but has been abandoned since 1938.
At the sale closing, the previous owner told Don Miller he had some papers with information about the property. Miller was presented with a garage full of documents - the entire record of all mining and exploration at Quartzburg since 1863. The documents offered a road map for geologists looking to reopen the mine.
"It would be worth $30 million to $40 million if you had to go out and collect it today," Don Miller said.
He worked with the Colorado School of Mines to analyze the documents and the information. The most remarkable find was that the piles of tailings sitting on the property since the mine closed in 1938 weren't tailing at all.
Instead of a pile of waste, Miller was sitting on 180,000 tons of rich ore that had been mined and left unprocessed. It is valued at more than $50 million, he said. Best of all, the ore has few contaminants and has not leached heavy metals into the ground.
A mutual friend at the Cascade Bank in McCall referred the Millers to Muroff. He and his partners bought into the Gold Hill Mine and it became the centerpiece of the Idaho Regional Center's investment.
The company is building a gold-processing plant near Quartzburg that will extract the ore without using noxious chemicals. Since it doesn't have to dig anything up, the business is not classified as a mine and does not require Idaho Department of Lands oversight, said Mike McCurdy, Idaho Department of Environmental Quality groundwater and radiation manager for the Boise region.
The site has a U.S. Environmental Protection Agency stormwater-pollution prevention plan and a conditional-use permit from Boise County. It must submit an analytical report to the county on any impacts to water quality by Aug. 19.
"Where we would come in is where there was a water quality or an air quality issue," McCurdy said.
MAKING THE SELL
The Idaho Regional Center and Ku have played up the long history of the Gold Hill Mine and the Boise Basin, where as many as 8,000 Chinese miners once worked.
They claim the mine and associated properties have 4.3 million tons of ore with a recovery rate of three-tenths of an ounce of gold per ton. That would represent a potential of more than half a billion dollars in gross profit.
These kinds of numbers make modern Chinese investors excited. Chen Qi, a 43-year-old owner of a company that makes metal fittings, told China Daily he has decided to invest.
"I don't care if people criticize me for leaving my country and joining this gold rush," Chen said.
The deal all came together in Quangzhou during Otter's trade mission in June. Muroff said he was still skeptical that Ku could deliver investors until Ku took him to the trendy Upday Chao restaurant to make a presentation to immigration consultants from across southern China.
The dinner meeting was a kooky window into the business culture of modern China. The many courses of Cantonese specialties - and fish so fresh it was stored in aquariums before cooking - were interrupted by frequent toasts.
Participants would break into song, play practical jokes on the Idahoans and even do magical tricks. But most important to Muroff, who took the joking in stride, was this: It was obvious that Ku's network was real and he could deliver.
But not everyone thinks it's as good as the regional center makes it look. Shaun Dykes, the project manager for Mosquito Gold, a Canadian company exploring for molybdenum in the same area, is skeptical.
"It sounds like something funny going on there," Dykes said, "all that money going into a small mine like that."
And while the Idaho Conservation League's John Robison said he knows and likes Miller, he wants to make sure to have public scrutiny.
"It's very difficult with Idaho's lack of regulations on mining oversight to say what will really happen downstream," Robison said.
MUROFF'S MODEL OF SUCCESS
The Jay Peak Resort in Vermont shows what can happen when a regional center works. The former ski resort has expanded into a year-round resort with golf course, waterpark, ice arena and new lodges with $165 million raised through the EB-5 program.
By using the foreign investment, Jay Peak has not had to spend millions of dollars up front - like typical resort developments such as Idaho's Tamarack - to market real estate to raise the major development costs.
Jay Peak has been able to time the development so the surrounding area, which has the highest unemployment in Vermont, can adjust to the growth, said President Bill Stenger.
"I call it patient capital," Stenger said.
Stenger said that while China is a big market for immigration investment, he gets money from 47 different countries.
"I will not put my future in one market," Stenger said.
Although Idaho has focused on China, it is expanding its appeal for investors to Mexico and Spain.
What sets Vermont apart from Idaho is that its regional center is operated by the state. All regional centers are legally separated from their projects, but Vermont runs its center for the benefit of the state instead of for a profit.
Meeting the federal requirements for a regional center is an onerous process, said Dickens of Idaho's Department of Commerce. Idaho couldn't afford that and that's why it sought private investors for the regional center.
Muroff and his partners have invested $60 million of their money to make the Idaho Regional Center go. He hopes to expand the current center through licensing agreements to other businesses such as technology companies, which were the target of the state in the first place.
HOW LONG WILL THE OPPORTUNITY EXIST?
No one knows whether China will continue to allow the out-migration of wealthy citizens. To enroll in the program, Chinese must give up their citizenship.
Recently, Chinese officials have expressed concerns about unscrupulous practice by some consultants. For a would-be immigrant there are several layers of middlemen to pay, adding more than 12 percent to the cost of the investment, Dickens said.
Regional centers also are often required to pay additional money for the investors brought to them by people like Ku.
Ku said laws are always changing, and businessmen like him must be nimble.
"No one can predict the law," he said. "There is always business risk."
David Shambaugh, a professor at George Washington University in Washington, D.C., and an expert on the Chinese Communist Party, said Idaho should encourage both Chinese investment and immigration. The stronger ties the state makes will improve its opportunities with a nation that will have a growing influence over all of our lives.
But he cautioned against giving China control over molybdenum, cobalt, titanium and even gold.
"There's nothing to fear but much to welcome about Chinese investment in Idaho," said Shambaugh, who just returned from a year-long sabbatical there. "But we have to be careful in national security areas like strategic minerals."
Rocky Barker: 377-5484