Senator Charles Grassley of Iowa has raised security concerns (concerns affirmed by the Department of Homeland Security) about the EB-5 visa investment program and the mostly private “regional centers” that sell EB-5 visas. Now he and Vermont Senator Patrick Leahy have proposed the “American Job Creation and Investment Reform Act to reform the controversial green-cards-for-sale program:
The American Job Creation and Investment Promotion Reform Act will strengthen oversight of the EB-5 Regional Center Program.
- Provide increased authority to DHS to deny or terminate applications where there is fraud, criminal misuse, or a threat to public safety or national security;
- Establish an “EB-5 Integrity Fund” in which regional centers would pay an annual fee to be used by DHS to conduct audits and site visits to detect and investigate fraud in the United States and abroad;
- Require background checks of regional center and project developer principals;
- Require DHS to vet EB-5 projects earlier in the process, before investors submit applications and hand over money to developers;
- Require increased disclosures to investors regarding business risks and conflicts of interest;
- Require more oversight of projects and closer monitoring for securities compliance;
- Strengthen the definition of “Targeted Employment Area” (TEA) so more investment goes to areas with high unemployment and rural areas, as Congress originally intended;
- Raise the investment threshold to $800,000 for TEAs and $1.2 million for non-TEAs;
- Decrease petition processing times, which have been plagued by extraordinary delays in recent years, by providing for expedited business plan approval and requiring fees be adjusted to the rate necessary to achieve efficient processing [Senator Patrick Leahy, press release, 2015.06.04].
That point about strengthening the definition of “Targeted Employment Areas” responds to the fact that Regional Centers frequently draw their project area boundaries to include neighborhoods and/or large rural areas with high unemployment to qualify for the lower $500K EB-5 visa-purchase threshold, then plunk their projects into ritzier neighborhoods whose lower unemployment rates would have required immigrants to invest a full million to qualify for EB-5 visas. This gerrymandering is taking place in Grassley’s home state, where developers have included some poorer neighborhoods in a project area to justify recruiting $500K EB-5 investors for a $101-million convention center planned for economically healthy downtown Des Moines. CMB Regional Center boss Pat Hogan isn’t worried:
Grassley’s bill would eliminate that option and require Des Moines to find foreign investors willing to contribute $1 million. Most investors aren’t willing to do that, Hogan said.
“Under Senator Grassley’s bill, Des Moines’ hotel is dead,” he said. “But that’s OK, because it’s only a draft” [Joel Aschbrenner, “Invest in Des Moines Hotel, Get a Green Card,” Des Moines Register, 2015.06.12].
The EB-5 lobby (there are 676 EB-5 regional centers, and they love their big easy money) will work to ease the restrictions of the Grassley-Leahy bill. The Integrity Fund, audits, and background checks of regional center personnel run counter to the unchecked authority then-Governor, now-Senator Mike Rounds gave South Dakota’s EB-5 operators. Rounds, who has a keen interest in protecting the EB-5 program he boosted in South Dakota, has yet to sign on as a co-sponsor to S.1501.
“Decrease petition (?) processing times”, “expedited business plan approval” seems to play right into a “Joop’s” hands, however, i guess daniel has assured us it was all benda.
End gerrymandering for election purposes and I’d say I could agree with Grassley for once,but that is too much to hope for when it benefits his party.
I wonder how many people would die and end up missing if eb5 regional centers were “legitimately” audited. I hope they replace the firing pins in their guns.
Selling green cards is wrong. BUILD A WALL #lol
WALL!! haha. republican simpleton answers are “so connect the dots” for the membership.
round’s “unchecked authority” (he “didn’t read the contract” is his own defense)? he hates obamacare doesn’t he, because he is perhaps an “insurance professional”? More so, did he bitch that it was passed “unread”? What’s good for the goose yadah yadah…
bravo, bravo, bravo david newquist for your blog post questioning EB5 and the tangled web the SDGOP and its lawyers have woven just out of the public’s sight.
cory has played a huge role in exposing what he can. mercer does not appear to have let it go either.
SDGOP apologists like troy, daniel and others are protecting someone at Regents, NSU, the legislature, our AG, governor and now our jr. senator, knowingly or blindly. Didn’t reporter dennise rice suffer shrapnel wounds for her impudence?
david, i would add that the AG’s lawyers were copied in on a lot of Joop’s illegal activities and a myriad of other things, along with a plethora of private lawyers attached to this red-state’s “teat” as is occasionally tastelessly said in our society. So were Regents and NSU lawyers. Hidden in their confidentiality privileges, overseen by the Barnett’s state bar assn, may be some answers.
With that many lawyers on the state “voucher”, perhaps audits and DCI and FBI and SDUSAttys did not have the horsepower to get to the bottom of the mess, and at the same time beat the USGOP from harvesting another new red state jr. senator via “democratic election”.
I just hate being obsessed with bad smells.
Integrity Fund and EB-5 is an oxymoron.
Ah, but there’s the thing, Roger: we could run EB-5 with integrity. We could make sure all dealings are above board. We could make sure no state official gets to turn his state job into a private contract with himself. We could recruit reputable businesses with a track record of success, a solid business plan, and a genuine need for EB-5 funding. We could direct new projects to areas that really need the jobs, like the reservations. And we could make all of our dealings public.
Of course, running the program with integrity assumes that we see integrity in immigration policy in letting rich foreigners jump the immigration queue with money.