The EB-5 Immigrant Investor Visa Program is a system created in 1990 that allows foreign nationals and their families to apply for green cards (permanent residence) if they invest "in a commercial enterprise in the United States" and "create or preserve 10 permanent full-time jobs for qualified U.S. workers."
Essentially, the EB-5 program allows people to buy permanent residency in the United States for a roughly $1 million investment ($500,000 for rural investments) in U.S. enterprises.
The latest bipartisan attempt to reform and extend the program — set to expire on June 30th — led by Senators Chuck Grassley (R-IA) and Patrick Leahy (D-VT) was blocked in the Senate this week.
In a speech on the Senate floor Thursday, Grassley criticized the "big moneyed" interests that stopped reform attempts to curtail EB-5 fraud and abuse.
"A narrow subset of big moneyed and corrupt interests has now shown that they would rather kill the program altogether than have to accept integrity reforms designed to clamp down on their bad behavior," he said.
Senator Leahy lamented Thursday's apparent dead-end for the reform attempt that came "at the behest of a small minority that blindly opposes much-needed accountability and transparency in the program. Senator Grassley and I have worked together for years to develop a thoughtful, careful compromise that would both keep the program alive and curtail the worst abuses of it," Leahy added.
A release from Grassley's office explains that the EB-5 program has also "been exploited by some wealthy urban developers who syphon [sic] investment money away from rural and economically distressed areas to fund ritzy projects in some of the nation’s most well-to-do neighborhoods" including more than $1 billion in EB-5 funding for the Hudson Yards project in Manhattan.
In 2013, Grassley rang the alarm on potential fraud in the EB-5 program after he reviewed "documents from whistleblowers [that] appear to show that concerns were raised because some visa applications may have been expedited without sufficient regard to criminal activity or security issues" for politically influential individuals.
At the time, Alejandro Mayorkas — who now serves in the Biden administration as Secretary of Homeland Security — was being investigated by the Office of the Inspector General for being "directly involved in expediting EB-5 applications before the proper security checks" over which "the FBI has expressed serious national security concerns with foreign investors involved in some of the EB-5 projects that had moved forward."
Internal memos issued around that time by Immigration and Customs Enforcement (ICE) have also cautioned officials that the EB-5 program "may be abused by Iranian operatives to infiltrate the United States.”
Again in 2015, Grassley sought to reform the EB-5 framework, calling out "the program’s abundant loopholes and lack of regulation [that] have created a virtual playing field for unethical gamesmanship and con-artists." When those attempts at reform were also blocked, Grassley promised his "quest to either have EB-5 reforms or end the program has just begun," adding "this is not the end, this is just the beginning."
Join the conversation as a VIP Member