The con man has an offer too good to resist. He, along with hundreds of others can be authorized by the federal government to manage investment money and sell green cards to foreign investors under a federal program known as the EB-5 Investor Visa.
The Senate Judiciary Committee is holding a hearing this week on the program but the title “Reauthorizing the EB-5 Regional Center Program: Promoting Job Creation and Economic Development in American Communities” is troubling. It indicates the Committee may simply rubber-stamp continuation of the program instead of subjecting it to a long overdue, thorough and transparent investigation of the program.
EB-5 was put into place in 1992 to spur job growth by offering green cards to foreigners in exchange for an investment of $500,000 to $1 million. Each investment is supposed to create 10 jobs. 10,000 green cards are allotted for this purpose each year.
The United States Customs and Immigration Service (USCIS) has authorized 204 EB-5 regional centers, each officially defined as “any economic entity, public or private, which is involved with the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.” The centers serve as middlemen to initiate the process of reaching out to foreign investors and matching their investments with local projects.
Never mind the unseemly aspect of selling American green cards as if we’re scalping hockey tickets, do the math and question whether $5 to10 billion is really going to find its way into the right places for the right reasons. Ask too, whether the federal government, or anyone in this instance, should be trusted to properly oversee the program, especially in the wake of mismanaged stimulus money and green dollars fueling a Solyndra bankruptcy scandal.
While some of the EB-5 regional centers are large and appear to be engaged in legitimate investments, upon close examination of the entire list, almost a third of the centers appear to be dubious, one-person shops with “CEOs” who have generic e-mails ending in “gmail,” “hotmail” or “yahoo.”
At least 43 centers do not even have a website, 11 have no contact information, and of those regional center websites that are active, many are either barely legible or not written in English. Interestingly, some of the regional centers are actually immigration attorney websites.
The large regional centers offer foreign investors a range of investment options including hotel, resort and shopping center developments. The small regional centers offer green cards in exchange for investing in everything from house foreclosures to vitamin supplements.
Feeling suspicious? Congress should be, too.
And for further intrigue, why does USCIS regard a “person residing in the United States under suspension of deportation” as an officially qualifying employee of the EB-5 program? Ten illegal aliens whose deportation has been put on hold – which is happening every day under Obama’s new administrative amnesty policies – seems to perfectly satisfy the requirement to create ten jobs.
The con man’s dilemma of getting the first person’s money in order to entice others is potentially solved with EB-5. The initial foreign investor’s infusion of cash appears to be used as a means by the “middleman” to solicit additional individuals, businesses and government municipalities to finance various, and possibly fraudulent, investment schemes.
Fraud and abuse has already happened and the conditions are ripe for more instances. One such California venture which received millions in EB-5 funding was the El Monte Transit Village project, an authorized EB-5 Regional Center.
The FBI is investigating how this project received federal, state and city money to develop 65 acres of housing, offices and stores at a cost of $1 billion. The company declared bankruptcy and the owners are being accused of fraud, embezzlement and theft. Another EB-5 regional center, Mamtek in Moberly, Missouri left the town on the hook for $39 million and the state holding another $17.6 million in debt as a result of the project going sour.
The fictional old West character Walter Scott once yelped, “There’s gold in them thar hills.” But he was also a con man who led people to a mine that didn’t actually exist. Something is glittering that may not be gold and it’s high time for Congress to investigate who the true beneficiaries are of the EB-5 program.
Better yet, Congress should shut down the program and devise a rational, skilled-based legal immigration policy. Then many of the people buying their way in with EB-5s might otherwise qualify as skilled immigrants.
Bob Dane is Communications Director at the Federation for American Immigration Reform. Kristen Williamson is Communications Assistant at FAIR.
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