Noem Changes Mind, Votes to Extend EB-5 Without Reform

On November 8, Rep. Kristi Noem said she would not vote to extend the EB-5 visa investment program without changes:

Noem said, “I will review any final reauthorization legislation once it is completed and make a determination at that time. As it currently stands, the program without reforms would not get my support” [Seth Tupper, “Lukewarm Support for EB-5 Among Congressional Delegation,” Rapid City Journal, 2015.11.08].

On December 2, Rep. Kristi Noem still hadn’t read the proposal for EB-5 reform, much less shown the initiative to propose any reforms of her own, but repeated that she would not vote to extend the EB-5 visa investment program without changes:

U.S. Rep. Kristi Noem, R-S.D., said she hasn’t reviewed the final re-authorization legislation for the EB-5 visa program, which is set to expire Dec. 11, but wouldn’t approve it as is.

“As it currently stands, the program without reforms would not get my support,” Noem said in a statement Wednesday [Dana Ferguson, “Noem Won’t Reauthorize EB-5 Without Changes,” that Sioux Falls paper, 2015.12.02].

On December 18, Rep. Kristi Noem voted to extend the EB-5 visa investment program without changes.

Section 575 of the Consolidated Appropriations Act of 2016 extends EB-5 to the end of this fiscal year, September 30, 2016. The folks making money off EB-5 investors waged a $30-million lobbying war to convince Congress that real change was bad for business. EB-5 brokers and big-sheel developers are cheering:

In a huge win for real estate developers, Congress extended the popular, controversial and widely-debated EB-5 visa program for another year with no changes. Not a one.

…The vote is a coup for New York developers, who have raised more than $3.7 billion from EB-5 investors, a vast majority of them Chinese, according to an analysis this year by The Real Deal. “It will be very interesting to see the market reaction, especially in China,” Ronald Fieldstone, a lawyer at Arnstein & Lehr LLP, wrote in a blog post Wednesday. “Probably a great sigh of relief” [link added; E.B. Solomont, “Developers 1, Congress 0 as EB-5 Is Extended Again — with No Changes,” The Real Deal, 2015.12.16].

Iowa Senator Charles Grassley, who has consistently demanded reforms to address the national security risks posed by EB-5, expressed his displeasure with this prioritization of big-money special interests over national security on the Senate floor last Thursday, December 17:

This bill, which will be voted on by the House on Friday, includes a straight and clean extension of a program called the EB-5 Immigrant Investor program. This program has been plagued by fraud and abuse.  But more importantly, it poses significant national security risks.  Allegations suggesting the EB-5 program may be facilitating terrorist travel, economic espionage, money laundering and investment fraud are too serious to ignore.  Yet, the omnibus bill fails to include much needed reforms.

…What makes this especially frustrating is that the Chairs and Ranking Members of the House and Senate Judiciary Committees agreed on a bill. We had consensus.  I appreciate the support of Senator Leahy, the Ranking Member of the committee.  I also commend Chairman Goodlatte, Ranking Member Conyers, Congressmen Issa and Lofgren.  We worked in a bi-partisan fashion.  We agreed on every aspect, believing in our heart of hearts that we were doing the right thing.  We found common ground on national security reforms.  We made sure that rural and distressed urban areas benefited from the program.  We instituted compliance measures, background checks, and transparency provisions.

Through months of hard work, we put together a great deal. But despite this broad, bi-partisan support, and the work of the committees of jurisdiction, not a single one of our recommendations will be implemented. Instead of reforming the program, some members of leadership have chosen the status quo.

This failure to heed calls for reform proves that some would rather side with special interest groups, land developers and those with deep pockets [Senator Charles Grassley, speech, U.S. Senate, 2015.12.17].

Noem pausing from her review of crucial national security measures for the EB-5 visa investment program (from @kristinoem, 2015.12.18)
Rep. Kristi Noem pausing from her review of crucial national security measures for the EB-5 visa investment program (from @kristinoem, 2015.12.18)

Senator Grassley voted against the Consolidated Appropriations Act. So did Senator John Thune. Senator Mike Rounds, whose own EB-5 program back in South Dakota became the poster child for EB-5 corruption, voted for the EB-5 extension after studious agnosticism on the issue.

And Rep. Kristi Noem, who made darn sure she voted for changes to another visa program on her declaration that “My number one priority is the safety and security of the American people,” joined Rounds in making lobbysists, lawyers, and real estate moguls her number one priority on EB-5.

Senators Flake, Cornyn, and Schumer have offered S. 2145 to reform EB-5 now. Rep. Noem, perhaps you can revisit your vote for EB-5 and realign your priorities with your public statements.

15 Responses to Noem Changes Mind, Votes to Extend EB-5 Without Reform

  1. larry kurtz

    Noem: Money Interests Lobbying Flake.

  2. Nick Nemec

    Sadly we all knew this was where Noem would end up on this issue, despite her statements.

    Thune, as always, makes for good eye candy in the back row of the celebration photo.

    Rounds actually had cronies to protect, his vote was the easiest to predict.

  3. Nick, would you say SD state govt is the most corrupt it’s ever been, or was it always this way? Did it get worse when Rounds was in office? I’d like to hear your answer.

  4. This was an “everything but the kitchen sink” bill. It’s highly doubtful that anyone made their decision to vote for or against the bill because of the EB-5 provision. This big bill was a chance for all of the lobbyists and pork barrel spenders to get their pet projects approved. Surely not everybody who voted for the bill wanted to fund the building of ships the Navy and Coast Guard didn’t want or need, but Sen. Susan Collins (R-Maine) and Sen. Thad Cochran (R-Miss) got those added in just because they could. Just because they could. The Warshington wheels are greased with pork fat.

  5. You can’t really blame Kristi. I am sure that, due to the holidays, the RNC was late getting her the latest Republican talking points! What’s a girl to do????

  6. mike from iowa

    Grassley is a dipstick. If he was sincerely concerned about big money interests he would stop blocking Obama’s judicial nominees and stop voting for strict constructionists who favor the 1%. If terrorists were a problem maybe he should vote some restraints on the NRA who would rather arm terrorists then admit Obama isn’t taking their guns.

    As for Noem,I believe some industry just plunked down a sizable campaign contribution with her name on it if she votes aye. Face it. Political whoring is an
    even older profession than prostitution.

  7. mike from iowa

    It has taken Dakota forty years to get this bad. Texas needed less than 20 years and Wisconsin made it in less than five years. Wingnut crooks sure be fast learners.

  8. Nick Nemec

    Jenny, corruption is like rust, it gets worse unless you do something positive to stop it.

  9. Roger Cornelius

    While I support Senators Thune and Grassley’s vote against EB-5, they have not taken their concern far enough.

    Now is the time for senators and congressmen to call for a full investigation of EB-5. I know it’s not likely because of all the payola, but maybe there are at least a couple of senators and congressmen that have the courage take on the waste and fraud of EB-5.

  10. mike from iowa

    Grassley claims to be the citizen’s champion at going after fraud and waste-just never when it involves hizown party. Barely heard a peep from him when dumbass dubya roamed around.

  11. mike from iowa

    As a quick aside-Grassley never complained about the 9-11 commission report having edited and redacted all of the pages (28?) dealing with Saudi Arabia’s involvement with the terrorists. Most people who have read the un-redacted pages say there is nothing in there that should not be released to the public. No Security information is in there. Just stuff that would be embarrassing for dumbass dubya and crew.

  12. Ror, Noem and Rounds can certainly claim to have been voting on the overall budget, not the particular provisions. But notice that Thune didn’t let the weight of the entire budget stop him from voting no so he can march into the 2016 election telling ranchers he didn’t vote to repeal Country-of-Origin Labeling and telling corruption crusaders that he didn’t vote to extend EB-5. Hmm… could his spies have told him he really does have to worry about his impending Democratic challenger?

  13. Roger, why don’t they just come out and say, “End EB-5—no more selling green cards”? Heck, when the Republicans think Syrian refugees pose a security risk, they propose completely blocking Syrians from entering until immigration reforms have taken place. Here they’re saying to Chuck Grassley, “Yeah, there are security risks, but we’ll fix them later and keep letting these rich foreigners in.”

    And we all know rich people pose less danger to American than poor people.

    Mike, I can’t speak to Grassley’s other policy positions. But he’s at least pointing in the right direction on EB-5.

  14. what was that rich dead guy’s name…Usama Bin Ladin?

    If thune’s vote wasn’t necessary, why wouldn’t he hedge his bets?

    merry Christmas good people :)