BigNews.Biz - Mar 09,2017 - EB-5 Investment Visa Program In Need of Reform
Prepared Statement of Senator Chuck Grassley of Iowa
Chairman, Senate Judiciary Committee
Testimony before the House Judiciary Committee
Hearing on The Department of Homeland Security’s Proposed
Regulations Reforming the Investor Visa Program
VIDEO: Senator Grassley Appears Before House Judiciary Committee Hearing
Chairman Goodlatte, Ranking Member Conyers, and Members of the House Judiciary Committee,
Thank you for giving me the chance to testify about reforming the EB-5 investor visa program. Senator Leahy and I have longstanding concerns with the regional center program. We have worked together for years to address this program’s rampant waste, fraud and abuse.
As this Committee knows, in 1990 Congress created the EB-5 visa program. The goal of this new visa was to create new employment opportunities for American workers. A mere two years later Congress established a ‘pilot’ program which allowed investors to pool their investments into regional centers.
The theory behind this program was simple: by allowing investors to pool their funds, greater investments would occur and jobs for American workers would flourish.
25 years later, this pilot program still exists, but it is deeply flawed and has strayed from its original intent. There are many problems with the regional center program, but let me mention just a few of the worst issues:
Jobs created are not “direct” and verifiable jobs. They instead are “indirect” and based on vague estimates and economic modeling.
A foreign national is allowed to count all jobs created by a project when obtaining their green card. This is even if their EB-5 money is only a mere fraction of the total investment.
Investment funds are not adequately vetted, and there are no prohibitions against foreign governments owning or operating regional centers.
Even more concerning, background checks aren’t required for anyone associated with a regional center. This raises serious questions about whether foreign governments are selling U.S. green cards to their citizens.
Regional centers gerrymander Targeted Employment Area boundaries to encompass economically distressed areas in order to come in at a lower investment level. This is an issue because the jobs created aren’t actually created in those areas and the projects aren’t actually in those areas. The problem is made worse by the fact that every Targeted Employment Area designation is rubberstamped.
Finally, and perhaps the most frustrating, the minimum investment level hasn’t been raised in 25 years.
I could keep going about the many abuses. With this in mind, I believe that either the regional center program should be both completely overhauled and reformed, or it should expire. The American people deserve better.
Senator Leahy and I have tried to work in a bicameral, bipartisan way to enact real EB-5 reform. Last year, the Senate Judiciary Committee held two hearings alone on this subject, and the House Judiciary Committee held another.
We heard from local leaders and associations representing workers and regional centers. We listened to academics and government officials. We received feedback from many industries, as well as immigration and securities