As Governor, Mike Rounds let the EB-5 visa investment program become a den of South Dakota corruption. As Senator, Rounds wants to play the guy who fixes that corruption. Seth Tupper reports that our junior Senator has spent three years composing a bill to fix exactly the abuses of the program that his EB-5 cronies committed:
Many provisions in the bill aim to prevent and catch malfeasance, including some highly specific provisions that read like a point-by-point reaction to some of the improprieties committed by South Dakota’s EB-5 program.
For example, the bill would:
- Prohibit people from serving as loan monitors for projects they were previously associated with as regional center employees.
- Require regional centers to provide 120 days advance notice of significant changes in their organizational structure, ownership or administration.
- Require evidence from regional centers that money invested by foreigners is committed to intended projects.
- Authorize the secretary of homeland security to suspend and terminate regional centers and third-party promoters for a number of program violations, and to fine regional centers up to 10 percent of the money invested through them.
- Require the Department of Homeland Security to perform site visits to regional centers and their projects.
- Require reports on various aspects of the EB-5 program from the Government Accountability Office and other federal offices.
- Allow the secretary of homeland security to deny program applications that are contrary to the national interest, for reasons pertaining to national security or public safety [Seth Tupper, “Rounds Doubles Down on EB-5: New Bill Would Reform and Prolong Program,” Rapid City Journal, 2019.11.08].
You’d think, with an election coming up, Mike Rounds wouldn’t want to give us any excuse to talk about EB-5 again. Maybe Mr. Ehrisman is right: maybe Rounds isn’t going to run again and thus has nothing to lose by dredging up his greatest failure (not just EB-5 specifically but his facilitation of deadly crony corruption). But the 2014 election showed that Rounds’s “R” branding is more powerful than EB-5 and every other letter and number combined, so he can plow happily forward into the primary and the general beating back his opponents’ plaintive cries of “EB-5!” with his own shouts of, “Yeah, EB-5! And I’m fixing it!”
Or maybe, most likely, there are just some rich guys who don’t like the increased cost of EB-5 visas and other rich immigrants who are sick of waiting. Rounds obliges both interests, as his bill lowers the cost of a normal EB-5 visa from the impending $1.8 million back down to $1.1 million and creates a loophole that allows 73,000 foreigners currently trapped in an EB-5 backlog to come on in. We’re capping refugees, people in dire need of safe harbor on our shores, at 30,000 a year, but Senator Rounds will let people willing to pay seven figures for green cards cut to the front of the line in more than double those numbers.
EB-5 critic and anti-immigration writer David North also notes that Rounds’s bill would undo the currently pending regulations that would prevent the gerrymandering past EB-5 operators have used to funnel dollars intended for depressed and rural areas into more lucrative urban projects. As I reported last month, big EB-5 firms have a harder time pitching projects in the boonies to foreign investors (the same as you’ll have a harder time selling a house in Reliance than in Sioux Falls). Allowing the EB-5 promoters to keep rigging their maps, not to mention reducing premium for prime investment zones from 100% to 10%, makes it more likely that foreign investors will sink their money into already profitable urban areas and not have to gamble on two-bit schemers in South Dakota proposing small casinos and beef plants and turkey farms and the occasional imaginary oil refinery.
Given those points, Mike Rounds’s EB-5 reform bill might not do anything for South Dakota’s general welfare… but then he wasn’t thinking about the welfare of anyone but himself and his rich pals when he plunged South Dakota into the EB-5 mess in the first place. And when voters made clear in 2014 they didn’t really care what Rounds did with EB-5, why would he behave any differently now?