A corrupt system of selling U.S. visas
Only 19 percent of Americans trust the federal government to do what’s right most of the time, according to the Pew Research Center. And it’s hard to blame them, given that our Congress has just extended a 25-year-old visas-for-investment immigration scheme that has accomplished essentially nothing except to foster corruption, risk national security — and subsidize real estate developers.
The EB-5 program reserves up to 10,000 permanent residency slots each year for foreign nationals who invest in the United States. Congress enacted it in 1990 on the superficially plausible theory that trading green cards for capital would boost the economy, as a similar plan in Canada had reportedly done.
Subsequent Congresses, and administrations of both parties relaxed standards. Now visa seekers may invest passively in existing U.S. firms rather than start their own. They get credit for “indirect” job creation. They may put up as little as $500,000 if they do so in needy “targeted employment areas” — gerrymandered to include hot urban real estate markets.
EB-5 applications have surged; in fiscal 2015, 9,764 investors and their family members got visas. Much of their money flowed into developments such as Hudson Yards, a $25 billion office, retail, residential and park project in Manhattan that has so far attracted $600 million via EB-5.
Some 85 percent of EB-5 investors in fiscal 2015 were from China, which is problematic, given the risk of money laundering: It’s hard to establish the ultimate source of investible funds emanating from that notoriously nontransparent economy.
Alert Trump Tower: Inadequately vetted foreigners and their U.S.-based enablers are exploiting our porous immigration rules!
Then again, Donald Trump’s son-in-law and adviser, Jared Kushner, may be an expert on EB-5 already: His company is building a luxury, Trump-branded apartment building in Jersey City with $50 million raised in large part from Chinese EB-5 applicants.
For the past year, Sens. Charles Grassley, R-Iowa, and Patrick Leahy, D-Vt., tried to reform the EB-5 program or kill it, using as leverage the impending Sept. 30 expiration of the overall federal spending law to which EB-5’s key legal authorities had been attached.
But the lobby and its Capitol Hill allies successfully resisted, and the legal authorities were extended as part of the must-pass spending measure that passed Wednesday and expires on Dec. 9. EB-5 could well survive via similar maneuvering for years.
This might not happen in a country that legislated according to regular procedure, and on merits — a country like, say, Canada, which in 2014 terminated the investor visa program upon which Congress patterned EB-5.
It “provide limited economic benefit,” an official statement noted, demonstrating that Canada’s government possesses yet another quality ours lacks: an ability to admit
its mistakes.