Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, and Ranking Member Patrick Leahy, D-Vt., told Senate leadership they oppose a straight reauthorization of the fraud-ridden EB-5 visa program in a FY17 continuing resolution (CR) or appropriations bill. The program must be reformed or allowed to expire on September 30th, they said.
The EB-5 program allows foreign nationals to invest $1 million (or $500,000 in rural or high unemployment areas) in a commercial enterprise in exchange for green cards and U.S. citizenship. The business must eventually employ, directly or indirectly, at least 10 American workers. Sens. Grassley and Leahy say the program has expanded beyond its original intent and allowed developers to build luxury condos, convention centers and hotels. The rapid growing program now awards about 10,000 visas annually, 80 percent of which have recently gone to wealthy Chinese citizens.
In a letter to Senate Majority Leader Mitch McConnell, R-Ky., Senate Minority Leader Harry Reid, D-Nev., and the Chairs of the Senate Appropriations Committee, they wrote, “The rampant abuse of the EB-5 Regional Center program has been well documented in recent years. Internal Department of Homeland Security reviews, the Government Accountability Office, media outlets, and our Committee have uncovered serious problems with the program. Cases of fraud and securities violations, money laundering, exploitation of investors, abused program incentives, and failed projects have become all too common…If the program is going to continue in some form, at a minimum, we should provide the Department of Homeland Security with the tools necessary to expand background checks, site visits, audits, and the vetting of projects and investors alike. We must also better monitor compliance with securities laws, increase program transparency, raise minimum investment thresholds and restore program incentives so more money goes to the communities that need it, as Congress intended.”
Sens. Grassley and Leahy introduced legislation to reform the program last year which has yet to see action. On the House side, Judiciary Committee Chairman Robert Goodlatte, R-Va., and Ranking Member John Conyers, D-Mich., introduced an EB-5 bill (H.R. 5992) that focuses on a number of reforms but does not limit the size of the program.
Updated: Wed, Nov 2nd 2016 @ 9:05am EDT