The Regional Center Pilot Program portion of EB-5 investor visa program is currently set to expire by the end of the fiscal year in September. The lucrative program where foreign nationals can achieve green card status in the United States after investing significant funds into economically struggling US areas has raised some concern within Congress.
Reauthorization of the EB-5 Program
The reauthorization of the EB-5 program has become a hot-button issue within the Senate. Critics of the program including Senate Judiciary Chairman, Charles E. Grassley of Iowa, believe the program to be corrupted by fraud and politically abused. Supporters of the program such as Majority Whip, John Cornyn of Texas, are calling to reinstate it without any adjustment to policy.
Opposition and Favor of EB-5
The intention of the EB-5 investor visa program was to bring foreign capital into the United States to boost the economy in low-income neighborhoods as well as rural areas, and assist with job creation. Those opposed of reinstituting the program argue that too many of the investments end up going to development projects in already prominent downtown areas. This is accomplished by gerrymandering of census tracts. However, Republican Senator Cornyn and New York Democratic Senator, Charles E. Schumer, have stated that holding urban and rural areas to the same standards would limit the program’s benefits for city workers, who often live in an area with high unemployment and find work in the wealthier sections of town. The divide on this issue is not along party lines, and therefore has been largely ignored in the overall national political debate over immigration.
Raising the Limit
A bill introduced in February calls for a raise in the minimum dollar amount for EB-5 investment. This would potentially raise the current minimum of $500,000 up to $800,000 while also granting the Homeland Security Department more jurisdiction. This could allow for the use of background checks and other means to investigate both domestic and international claims for fraud. Further, USCIS believes it has regulatory authority to adjust minimum investment amounts if Congress does not act to do so. The investment levels for EB-5 Visas have not changed since the law was passed and signed in 1990.
EB-5 in Politics
With all of the discussion about immigration reform in general, it’s surprising that the EB-5 program and it’s capability to increase citizenship and speed up the legal immigration process hasn’t been highlighted more. This is perhaps due to the corruption surrounding EB-5 investment.
While the program has itself generated little attention through 2016’s election, there have been some reports of political misuse of the program. In March it was published in Bloomberg that EB-5 investments from China were being used to fund a new Trump-branded residential complex in Jersey City. In addition, Politico had reported last year on Tony Rodham, Hillary Clinton’s younger brother, being involved with recruiting investors in China for funding of EB-5 projects to be developed in Philadelphia. The Hill reported on the Greentech Automotive case involving Tony Rodham, Terry McCullough and Bill Clinton soliciting investment in an electric powered vehicle plant, which turned out to be a disaster for most investors in the third round of investment, and all investors in the fourth round.
Although there is clear misuse of the program for personal gain, the vast majority of projects are not political in nature, and result in a benefit to their communities and to the investors. Compliance with SEC regulations is key, but more important is providing better and more comprehensive business and legal advice to the immigrant investors.