Grassley: Big Money Interests Again Block Reforms for Corrupt EB-5 Visa Program
Mar 19, 2018
Prepared Floor
Statement by Senator
Chuck Grassley of Iowa
Chairman, Senate
Judiciary Committee
On the Troubled EB-5
Investor Visa Program
March 19, 2018
I rise today to talk about
an issue that is important
to millions of individuals
who understand that
American citizenship is
something to be treasured.
The American people
understand that our
citizenship is a blessing,
and shouldn’t be given away
cheaply. Unfortunately, for
too many years this body
has witnessed the
perversion and degradation
of a program that sells,
yes sells, our citizenship.
This program originally had
a good purpose. In return
for investing money in
underserved areas, and
creating good paying
American jobs,
immigrant-entrepreneurs
could eventually become
U.S. citizens.
Sadly, in the last decade
this program has been
hijacked by big-moneyed New
York City real estate
interests. These developers
now take almost all the
foreign investment from
this program, and for the
last few years they’ve
actively prevented this
body from enacting any
reforms.
For those not aware, I’m
talking about the EB-5
Regional Center Program.
For years, I’ve been
fighting in a bipartisan
way to reform this corrupt,
scandal-clad program. I’ve
been fighting to protect
our national security, to
ensure foreign investment
is going to the most
deserving areas, and to
make sure that American
citizenship isn’t sold at
rock bottom prices in order
to feed the addiction of
New York interests to cheap
money. But, no matter how
hard I’ve fought, each and
every time we’ve tried to
reform this program these
same moneyed interests have
used their political
influence and political
connections to block any
meaningful reforms.
This is sickening, and it’s
exactly why most American
people question Washington,
D.C.
After more than three years
of trying to fix this
broken, scandal-plagued
program, I’ve finally come
to the conclusion that it
can’t be fixed. And since
it can’t be fixed, the EB-5
Regional Center Program
needs to be terminated. Let
me explain to my
colleagues, and to the
American people, exactly
how I’ve reached this
conclusion.
Several years ago, I
started working with
then-Ranking Member Leahy
on reforms to the EB-5
Regional Center Program.
Through the hard work and
dedication of our staffers,
we discovered the program
is riddled with fraud and
corruption, and poses a
real and serious threat to
our national security.
Among other things, we
discovered that:
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Investments can be spent before business plans are approved.
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Regional Center operators can charge excessive fees of foreign nationals in addition to their required investments.
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None of the jobs created have to be “direct” or verifiable jobs but rather are “indirect” and based on estimates or economic modeling. Again, not knowing for sure if jobs are created.
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Investment funds from foreign sources are not adequately vetted.
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Gifts and loans from anyone are acceptable sources of funds from foreign nationals.
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There’s no prohibition against foreign governments owning or operating regional centers or projects. That’s right, foreign governments can own businesses that sell our Citizenship. Think about that.
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Regional centers don’t have to certify that they comply with securities laws.
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There are no required background checks on anyone associated with a regional center. One need to look no further than the indictment last September of two Chinese fraudsters who stole more than $50 million in foreign investment and managed to sell U.S. citizenship to individuals on the Chinese government’s most wanted list.
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Gerrymandering continues and rural and urban distressed areas lose out.
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There’s no transparency on how funds are spent, who is paid, and what investors are told about the projects they invest in.
And the list goes on and on
and on. I could speak for
hours about the corruption
in this program.
Faced with this appalling
list of fraud, corruption,
and national security
loopholes, for three years
I’ve been working with
Senator Leahy and our
counterparts in the House
of Representatives to
produce real EB-5 reform.
Our staffers have spent
countless hours, nights,
and weekends meeting with
congressional colleagues
and industry stakeholders
to hammer out a compromise
that is fair to all sides.
But our offers have
constantly been rejected by
big moneyed industry
interests every single
time. This time has been no
different.
For the last year, my
staff, along with Chairman
Goodlatte, Senator Cornyn,
and Senator Flake’s teams,
has worked around the clock
to produce an EB-5 reform
package. Everyone made
numerous concessions in
order to reach a deal, and
after more than twenty
meetings and countless
hours of drafting, we
produced a reform package
that was fair.
Our reforms would have
reauthorized the Regional
Center Program for 6 years,
providing the certainty
that industry has long said
it craves. We would have
permanently set aside 3000
visas for rural and
underserved urban areas,
and would have increased
the minimum investment
amounts to $925,000. In
recognition of longstanding
industry concerns, we
agreed to reduce the
investment differential
between non-priority areas
and priority areas to a
mere $100,000. Finally, we
would have implemented a
host of integrity measures
that would have cracked
down on investment fraud,
foreign corruption, and bad
business practices.
Our reforms had the
unanimous support of Invest
in the USA, the largest
EB-5 trade association. Our
reforms had the support of
the EB-5 Rural Alliance, a
group working to ensure
that rural America has a
fair shake at attracting
EB-5 money. But, these
reforms weren’t acceptable
to the big moneyed New York
industry stakeholders who
currently dominate the
program. And because big
money interests aren’t
happy with these reforms,
we’ve been told they won’t
become law.
Let that sink in for a
minute. In spite of the
fact that reforms were
agreed to by Congressional
offices and had the support
of the largest EB-5 trade
association, they won’t
become law because a few
EB-5 businesses with a lot
of money have used their
political connections and
influence to block them.
As I said at the beginning
of this speech, I’ve
finally realized this
program cannot be reformed.
The Regional Center program
is simply too corrupted to
be saved, and it needs to
be ended.
Today, I’m calling on the
Majority Leader, the
Minority Leader, and all my
colleagues who value the
integrity of our lawful
immigration system to stand
with me and end the
regional center program.
The American people deserve
better than this. Our
citizenship means more than
this.
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