A win for rural America
Q: What is the EB-5 foreign visa program?
A: Nearly three decades ago, Congress created an incentive in the Immigration Act of 1990 to attract foreign investment and entrepreneurship in the United States. The EB-5 visa is an employment-based category of federal immigration policy designed to foster economic development and job creation by requiring at least a $1 million investment for local commercial enterprise.
The EB-5 visa provided a pathway for eligible immigrants to become lawful permanent residents in exchange for meeting federal thresholds of investment and employment commitments required under the law.
What’s more, Congress created a Targeted Employment Area (TEA) within the program to encourage investment in rural and urban areas with high rates of unemployment and scarcity of capital investment in distressed neighborhoods and communities.
For example, in a federally designated TEA locality, EB-5 petitioners were required to make a minimum $500,000 investment that would employ at least 10 U.S. workers. Administered through the Department of Homeland Security, the EB-5 program has attracted investment in infrastructure, real estate development and a variety of commercial projects.
However, as with any federal program, vigilant oversight is critical to ensure it is working as Congress intended. Oversight and transparency are vital tools that help root out waste, fraud and abuse. There’s no doubt the program has experienced corruption and growing pains along the way.
For the better part of a decade, I’ve worked to expose alarming risks to national security and raise the flag on wrongdoers gaming the system. Thanks to courageous whistleblowers and congressional oversight work, I’ve investigated allegations of economic espionage, money laundering and investment fraud stemming from this program. For several years, I’ve worked to fix a number of flaws and adopt bipartisan, bicameral reforms that would stop stakeholders from rigging investment to affluent areas through abusive gerrymandering tactics, plug loopholes riddled with wrongdoing, install more effective compliance measures, require stronger vetting and background checks on visa applicants and implement transparency and reporting requirements to improve accountability on how funds are spent, who is paid and where the money comes from in the first place.
Despite the mountain of evidence, my bipartisan efforts were stalled time and again.
As far as I was concerned, it was time to pull the plug unless reforms were secured to restore the integrity of this immigration investment program. For too long, wealthy foreign nationals were misusing the EB-5 program as a golden ticket to residency, and big moneyed interests in the United States were using it as a goose to lay golden eggs in their lap of luxury development projects.
Q: How will the Trump administration’s new rule improve the program for rural America?
A: The Trump administration took the bull by the horns and issued a new federal rule this summer that will fix systemic flaws in the fraud-laden foreign investor visa program.
The regulations will crack down on longstanding practices that allowed affluent areas to siphon foreign investment away from rural areas that are starved for capital investment.
President Trump deserves recognition for his efforts to drain the swamp and fix loopholes that handed rural America the short end of the stick. The rules will take effect Nov. 21, 2019. Key changes include raising the standard minimum investment threshold from $1 million to $1.8 million. The TEA investment thresholds for rural and underserved areas will go from $500,000 to $900,000.
What’s more, the Department of Homeland Security will make TEA designations under new guidelines to stop abusive gerrymandering tactics. At long last, these changes will help ensure this investment pipeline reaches communities in rural America as Congress intended.
In the meantime, I’ll continue working with Sens. Leahy, Feinstein and others to shore up other EB-5 abuses we have identified.
I’ll also keep a close eye on implementation of these much-needed reforms going forward so they aren’t swept under the bureaucratic rug of incompetence and neglect.
U.S. Sen. Chuck Grassley, R-Iowa, has served in the U.S. Senate since 1981.