The Washington Post rightly called on the Trump Administration yesterday to end the government’s controversial EB-5 visa regime and, in particular, its Regional Center Program, which was recently extended until the end of September 2017. In most cases, the “Immigrant Investor Program,” or Employment-Based Preference Five (“EB-5”) cash-for-visa program, permits foreign nationals to apply for a conditional visa by investing $500,000 in an area of “high unemployment.” Once certain job creation requirements are satisfied, the visa holder can apply for a green card (i.e., for permanent residence). Although advocates contend that EB-5 is good for the economy, the program has been beset with controversy. Most recently, President Trump’s son-in-law, Jared Kushner, came under scrutiny for his family’s efforts to “push” EB-5 visas to wealthy Chinese investors.
Cause of Action Institute’s (“CoA Institute”) investigation into various aspects of the EB-5 cash-for-visa program and the Regional Center Program have shown that these initiatives are continually abused for political or fraudulent purposes—a fact now acknowledged by the Government Accountability Office.
- CoA Institute published a comprehensive report detailing how Virginia Governor Terry McAullife’s former company, GreenTech Automotive, used his political connections to garner millions of taxpayer dollars in loans and tax incentives. GreenTech remains embroiled in an investigation by the Securities and Exchange Commission for its involvement with EB-5. The Inspector General for the Department of Homeland Security reported that McAuliffe and friends—including Anthony Rodham, brother of former Secretary of State Hillary Clinton—benefited from political favoritism in the administration of the visa program.
- CoA Institute’s report on Forest City Enterprises explained how corporate interests and state and local government worked together to take advantage of weak and ambiguous regulations governing EB-5—manipulating census data to create “targeted employment areas” and relying on questionable job prediction models to meet green card conditions. CoA Institute also discovered that Forest City contracted the same immigration lawyer and economist as GreenTech.
- CoA Institute filed an ethics complaint against former Senator Harry Reid, who contacted officials at the U.S. Citizenship and Immigration Services in an attempt to influence the approval of EB-5 visa applications for a casino development project owned by Reid’s donors and represented by his son. The Senate Ethics Committee ignored the request, claiming that it never received a copy despite evidence to the contrary.
- In the wake of the DHS Inspector General’s report, CoA Institute called on the Department of Justice to investigate a number of government officials for violation of federal laws.
Simply stated, the EB-5 Program operates as a cash-for-visa scheme. Whatever economic advantage it might offer is outweighed by the corruption it engenders and negative influence it has on national security and good government. Congress should end the program or work to reform its governing rules to prevent continued abuse by the political class.
Ryan Mulvey is Counsel at Cause of Action Institute