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Lawmakers Blast Delays in EB-5 Visa Reform: 'Fix This Program or Let It Lapse'

Immigration Agency Says Green Cards-for-Jobs Program Overhaul Won't Be Finished Before End of Fiscal Year
June 20, 2018
The Moinian Group EB-5 funds for between $250 million and $350 million for construction of its 2 million-square-foot office tower in Hudson Yards. Courtesy: The Moinian Group

In a rare moment of bipartisan agreement Tuesday, Trump Administration officials and top U.S. senators both said a popular immigrant visa program should be allowed to expire if federal officials can't resolve longstanding issues affecting the program, including reducing fraud and addressing national security issues and minimum contribution requirements.

The regional center program of the EB-5 program, which allocates 10,000 visas annually to foreign nationals who agree to invest at least $500,000 into a U.S. real estate development project or other job-creating business, is set to expire on Sept. 30 unless Congress again extends its funding authorization.

EB-5 has operated under a series of temporary extensions by Congress since 2015. The program received its most recent six-month reprieve in March after it was included as part of a federal omnibus spending bill. Over that time, lawmakers have floated various proposals to either fix or kill the program.

California Democrat Sen. Dianne Feinstein and Republican Iowa Sen. Chuck Grassley, members of the Senate Judiciary Committee, have introduced legislation to terminate EB-5.

On Tuesday, Grassley and Feinstein renewed their call to let the program expire at the end of September. On Tuesday, a top U.S. Homeland Security official agreed EB-5 should be allowed to lapse if it can't be fixed.

U.S. Citizenship and Immigration Services Director Lee Francis Cissna told the Senate Judiciary Committee he doesn't think changes to the regulations can be finished before Sept. 30, the end of the fiscal year.

"I don't know, that would be hard to pull off. I think it might be tight," Cissna said under pointed questioning by Grassley. "I believe if the program is not fixed in a way that addresses all these problems... then yes, I believe it should expire."

Feinstein and Grassley outlined numerous cases of alleged fraud and corruption, with U.S. investors using the program for personal gain by fraudulently inducing foreign nationals to invest in real estate projects.

Cissna said such abuses of the program are "far too prevalent," and that corruption and fraud have "tainted the entire program."

However, the program also has many vocal supporters in the real estate industry. There's no question EB-5 has played a key role in funding a number of high-profile U.S. commercial developments. For example, The Moinian Group has selected the George Washington Immigration Group LLC, an EB-5 regional center based in Jericho, NY, to fund completion of 3 Hudson Yards Boulevard in New York City.

The Greater Houston Partnership has said halting the program could jeopardize billions of dollars in commercial property investments in the region. Judiciary Committee member and Texas Republican Senator John Cornyn said, "numerous infrastructure and business development projects in my state have benefited from the EB-5 program."

"I agree we need targeted reforms to eliminate fraud," Cornyn added. "I was disappointed that, after intense negotiation with the industry, we were not able to broker reforms."

The influential Cornyn, along with Minority Whip Charles E. Schumer, D-N.Y., supports the program as a stimulus for investment in U.S. projects and jobs.

However, Grassley said that in spite of ample evidence of fraud and corruption and concerns about national security loopholes, EB-5 "continues to operate exactly the same way it did 25 years ago."

For the past four and a half years, Grassley has worked in bipartisan efforts to reform the program.

"Each and every time we’ve gotten an agreement, at the last minute, powerful, well-connected EB-5 industry groups have torpedoed our efforts," Grassley said.

Cissna said his agency has no legal authority to terminate a regional center for criminal or security concerns. Under current regulations, Citizenship and Immigration Services may only revoke a designation if the center "is no longer promoting economic growth" or fails to submit required information to the agency.

"In the last decade, the program has been re-authorized by Congress without added safeguards or tools for the department to better operate the program," Cissna said. "In the absence of legislative reforms, Congress should consider allowing the program to expire."

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