Our neighbors to the north finally have wised up to the international cash-for-visas scam. Last week, the country ended its foreign investor program that put residency up for sale to the highest bidder. We should have done the same a long time ago.
Canada's Immigrant Investor Program granted permanent residency to wealthy foreigners who forked over 800,000 Canadian dollars for a five-year, zero-interest loan to one of the country's provinces. The scheme turned out to be a magnet for tens of thousands of millionaires from Hong Kong and China. But as the Canadian Ministry of Finance concluded in its annual budget report this year, the program "undervalued Canadian permanent residence" and showed "little evidence that immigrant investors as a class are maintaining ties to Canada or making a positive economic contribution to the country."
In several provinces, the foreign investor racket was riddled from top to bottom with fraud. Whistleblowers in the Prince Edward Island immigration office exposed rampant bribery among bureaucrats and consultants, who helped their clients jump the queue. The government failed to monitor immigrant investors or verify the promised economic benefits of the "investments." The program didn't just fast-track supposed business people with dubious business backgrounds, but also their entire extended families, who walled themselves in segregated neighborhoods.
Ads in Dubai bragged that investors didn't even need to live in the country to take advantage of the citizenship-for-sale deal -- and that their dependents could avail themselves of full health care and education benefits.
Fifteen years ago, an independent auditor hired by the Canadian government warned that he had "found that in many cases there was no investment at all or that the amount of that investment was grossly inflated." The auditor nailed the expedient commodification of citizenship: "Canadians gave up something of real value -- a visa or passport -- and received very little in return." He concluded: "A lot of people made a lot of money, mostly lawyers and immigration consultants who set up these bogus investments. It's a massive sham. The middlemen made hundreds of millions of dollars."
I've been issuing the very same warnings about America's EB-5 immigrant investor visa program, created under an obscure section of the 1990 Immigration Act, for more than a decade. The details of the U.S. program vary, but the facade is the same: trading residency on the cheap for the shady promise of economic development. Just as in Canada, the U.S. racket's alleged economic benefits are largely hype.