The controversial EB-5 investor visa program in the United States expired this week. The program allows wealthy foreigners to invest in the United States in exchange for a green card. Both parties in the U.S. have called for reform of the program due to allegations that it is rife with fraud and abuse, but the reform bill has been blocked in the Senate.
According to FoxBusiness.com, the EB-5 investor visa program allows foreign investors to make investments in U.S. commercial enterprises that create jobs in the United States in order to obtain U.S. residency. This is tantamount to a program that takes dollars in exchange for residency. Members of Congress on both sides of the aisle are concerned that the Chinese Communist Party will use the program, thereby posing a national security risk to the United States. So far, the majority of applicants to the program have come from China or other parts of Asia.
The EB-5 program requires investors to invest $1 million – or $500,000 in high poverty areas – and create 10 jobs in exchange for residency in the United States for the investor and his or her immediate family and the opportunity to apply for citizenship.
It also involves the creation of “regional centers” that pool visa money to fund large investments nationwide.
Republicans cite statistics showing that nearly 80 percent of the nearly 10,000 EB-5 visas offered each year between 2012 and 2018 went to Chinese-born investors, and that the majority of the backlog of investment applications were filed by Chinese.
“While the EB-5 program’s goal of stimulating capital investment and job creation in the United States is laudable, it has become clear in recent years that the Chinese Communist Party may be abusing the program to obtain permanent residency in the United States for its members,” House Republicans said in a letter to the Government Accountability Office last year.
The Trump (R-Texas) administration had enacted regulations in 2019 that would have raised the minimum amount required to invest in the program from $500,000 to $900,000, along with a host of other regulations, but were struck down by a federal judge earlier this month.
Last week in Congress, Republican Senator Chuck Grassley and Democratic Senator Patrick Leahy tried to pass an EB-5 reform bill in the Senate. The bill would create additional regulations using unanimous consent.
The bipartisan bill would extend the EB-5 investment program through 2026, while allowing “regional centers” to take steps to combat fraud and submit project plans to the Department of Homeland Security. It also includes additional background checks, regional center audits, and site visits for EB-5 projects.
It also establishes a stricter definition of EB-5 capital, strengthens DHS’s authority to review foreign capital to ensure it is of legitimate origin, and requires foreign agents and third-party sponsors of the program to register with DHS. It also creates an EB-5 Integrity Fund.
But the bill was blocked by Senator Lindsey Graham (R-SC). Graham has supported easing restrictions in the past rather than adding additional regulations.
Foxx said Congress could still try to pass a simple extension of the EB-5 program instead of making changes.
Graham’s spokesman said Graham wants to negotiate a long-term compromise with all parties. That solution would allow the EB-5 program to succeed while improving the integrity of the EB-5 program.
Leahy warned that one of the immediate effects of the bill being blocked in the Senate would be the immediate expiration of the EB-5 program.