Bob Mercer got various leading South Dakota pols to stake out their positions on the EB-5 visa investment program, which ended in South Dakota with one suicide, one guilty plea, and the feds deeming us too corrupt to participate further. Predictably, the man responsible for launching South Dakota’s scandal-plagued EB-5 ride, Marion Michael Rounds, is the only person willing to say Yeehaw EB-5:
“I believe the federal EB-5 program has been – and can continue to be – an important tool for economic development, particularly in areas underserved by traditional financing options and I would be open to an inflation increase as long as reforms to improve federal oversight of the program are included,” Rounds said in a statement last week [Bob Mercer, “Several Members of South Dakota’s Delegation Question Continuation of EB-5 Immigrant Visas,” Watertown Public Opinion, 2017.08.11].
Our other two Congress critters say EB-5 kinda works but needs fixing:
U.S. Sen. John Thune said this in a statement last week: “While there are a few examples where investments through the EB-5 program benefited local communities, it’s clear that the program is flawed and, if renewed, is in need of significant reform.”
U.S. Rep. Kristi Noem had this to say in a statement last week: “While the program has been helpful in some parts of the country, I believe it is too often unaccountable and not transparent enough to be renewed as a stand-alone program without reforms” [Mercer, 2017.08.11].
We’ve heard that before: despite two years of making the same vague promise, Thune and Noem have not thunk up any specific reforms. Noem and Rounds voted in December 2015 to extend EB-5 without any reforms; Thune joined them in another as-is EB-5 extension in September 2016. Thune has expressed strong doubt the immigration bill the White House has endorsed, the RAISE Act, which would, among other things, eliminate EB-5. Rounds has offered fuzz on that bill.
U.S. House candidates Dusty Johnson and Shantel Krebs more forthrightly criticize the core principle of the program, allowing rich foreigners to buy their way into America:
Johnson in a statement said: “I have real concerns with EB-5 as a program, and couldn’t support its continuation ‘as is.’ EB-5 has strayed from its original purpose. As I understand it, the intent of the program was to attract people who wanted to bring their business to America, for example, a dairy farmer from the Netherlands who sells his operation, moves to South Dakota, and invests the proceeds in a dairy operation here.
“At some point, EB-5 evolved into a program that bundled the money of dozens of foreign investors. Unlike the Dutch farmer, these investors weren’t investing to build a business or earn a return. Instead, they were investing to secure a green card, and saw the $500,000 as the price of admission. As a result, quite a number of them invested in projects that were too risky to attract other financing, which led to high-profile bankruptcies of some EB-5 projects.
“I’m not at all convinced that today’s EB-5 program is good for our country. I’m interested in reforms that would return EB-5 to its roots, perhaps by limiting the number of EB-5 investments in a particular project, or by requiring that an EB-5 investor be actively involved in the management or operation of the enterprise.”
He added: “Increasing the minimum investment amount makes a great deal of sense. My preference would be to make that change along with other, more substantial, reforms to the program.”
Krebs in a statement said: “While I certainly support investment in our state and economic development, I have serious concerns about the possibility for abuse of the program as it stands and the potential that foreign investors would be able to buy entry into America. Entry into America is a privilege that must be earned.”
She added: “I fundamentally don’t agree with the program” [links added; Mercer, 2017.08.11].
Kudos to Johnson and Krebs for not adopting the namby-pambiness of the woman they want to replace in Washington on this issue.