WASHINGTON — A controversial investor-visa program would become permanent and award green cards to more foreign nationals if Congress approves amendments to a pending immigration reform bill.
The EB-5 program grants residency to foreign nationals who invest as little as $500,000 in U.S. business ventures.
Sen. Patrick Leahy, D-Vt., said with his amendments, EB-5 “has the potential to contribute $5 billion to communities around the country each year, creating tens of thousands of American jobs.”
The U.S. Citizenship and Immigration Service, which administers the program, says 46,000 jobs have been created via EB-5 since it began in 1990. Rules require that each foreign investment unit generate at least 10 jobs.
But the USCIS accounting process — using complex formulas that include “indirect” jobs — has drawn fire from critics who accuse the agency of lax oversight, loose enforcement and an overall lack of transparency.
USCIS reports that 225 EB-5 “regional centers” have collected $6.8 billion in foreign investment since 1990. All but one are privately run – a public center operated by Leahy’s home state of Vermont is the exception – and USCIS will not disclose financial information about them.
A string of Leahy-sponsored amendments is fueling more criticism.
In addition to erasing EB-5’s sunset provisions and making the program permanent, Leahy’s Judiciary Committee loosened the program’s eligibility requirements. The program is scheduled to end Sept. 30, 2015.
“Full-time” employment could be defined as “intermittent” or “seasonal” jobs, including those in construction.
“Capital” committed by foreign investors can include “intangible” assets or funds “held in trust for the benefit of the investor.”
The amendments also raise the number of allowable EB-5 visas by exempting spouses and children from annual immigration caps, and designate a minimum of 5,000 visas per year for investments in targeted high-unemployment areas.
Current law reserves 3,000 visas for EB-5 investors.
“Government should get a handle on the current statute,” said Don Crocetti, retired chief of the Fraud Detection and National Security Directorate of USCIS. “Now is not the time to be creating new categories.”
Crocetti says Congress needlessly complicates immigration law, and sells America short.
Asserting that USCIS is already “under pressure to process (EB-5 applications) in an expedient manner,” Crocetti envisions expansion as a “formula for disaster.”
“I am not an expert in EB-5, nor are most (USCIS) adjudicators or those conducting investigators into alleged fraud,” Crocetti told Watchdog in an interview.
The 36-year veteran of immigration enforcement suggested a smarter approach would be to raise investment requirements to attract truly affluent immigrants and avert a system overload.
Crocetti said “$500,000 is not a whole lot of money.”
Leahy’s amendments would begin to adjust the buy-in for inflation in 2016. The $500,000 minimum hasn’t changed since EB-5’s inception.
Laura Foote Reiff, of the law firm of Greenberg Traurig and a member of the advocacy group, EB5Investors.com, applauded Leahy’s efforts.
“It is good to see the EB-5 program receiving positive input from the members of the Senate Judiciary. Senator Leahy’s amendment to S.744 (the immigration bill) will add some important changes to the program. We will work toward perfecting those changes in the House,” Reiff told Watchdog.
Crocetti, who recently founded the Immigration Integrity Group, saluted Leahy’s call for “enhanced pay” to USCIS agents administering EB-5.
“EB-5 has become an extremely complex program, and more MBAs and economists are needed to figure it out. Congress seems to have a knack for creating complex laws that are difficult to administer,” he said.
Attorneys Dawn Lurie and Catherine Risoleo say Leahy’s amendments will aid enforcement.
“Following the Securities and Exchange Commission’s investigation (and asset seizure) in the Intercontinental Regional Center Trust of Chicago, the amendment builds anti-fraud and oversight measures into the EB-5 program,” Lurie and Risoleo wrote.
“The amendment requires detailed annual reporting from (EB-5) regional centers to track the progress of investment projects. It also permits the secretary of Homeland Security to bar those who were liable of financial or other crimes from using the program, and to conduct background checks on potential regional center managers.”
Still, Sen. Charles Grassley, R-Iowa, has doubts. In remarks regarding EB-5’s renewal last year, he noted that Reuters had “reported on how cash-hungry American businesses are working abroad to promote EB-5.”
“Many of these EB-5 promoters are mischaracterizing the program, luring investors here and robbing them of the American dream,” the senator charged.
Watchdog recently reported that an EB-5 marketer was charged with misappropriating funds from Chinese nationals who had invested in a Kansas ethanol plant. The plant was never built.
“Maybe it’s time (federal) agencies wake up and figure out what’s truly going on,” Grassley said.
Eric Ruark, director of research at the Federation for American Immigration Reform, which lobbies for stricter enforcement of immigration laws, said Leahy’s EB-5 amendment “further undermines the integrity of our immigration system.”
“The amendment loosens the already lax requirements for the establishment of a regional center, such as ‘other positive economic effects such investments will have,’ and it allows EB-5 aliens to establish their own ‘reasonable methodologies for determining the number of jobs created by the program.’
“There is no pretense in this amendment of reliability or accountability,” Ruark told Watchdog, noting, “There is an awful lot of ‘may’ in the amendment instead of ‘shall.’
“This is important because it allows the DHS secretary to turn a blind eye to fraud and abuse that is already known to exist in the program. Even if there is overwhelming evidence of fraud or deceit, the DHS secretary may impose penalties on the perpetrators,or she may not.”
David North, a policy analyst at the Center for Immigration Studies, called EB-5 “a tacky program that lets rich people — and moderately rich ones — buy green cards.
“It should be allowed to die, or, if it is to continue, the cost per visa should be much higher, and the money should be used not (to build) Marriott (hotels), but to reduce the national debt.”
Latest posts by Kenric Ward (see all)
- Reid throws costly wrench at broken immigration courts - February 24, 2016
- Creating Muslim ghettos: Texas spars with Obama admin about refugees - January 11, 2016
- Feds shuttle illegal migrants around Texas - January 7, 2016