The EB-5 Swamp, Continued
Congress gets another shot at killing that swampiest of swamp creatures, the EB-5 visa program, at the end of September. EB-5 is a cash-for-visas program beloved of Democrats and Republicans, real estate developers, and a not insignificant number of crooks and hustlers. Cause of Action has been documenting mounting EB-5 scams at a new website. It’s an eye-opener.
Under EB-5, foreigners—mainly Chinese citizens—get a green card and a path to citizenship by paying $500,000 into the program, the money designated for job creation in economically distressed “targeted unemployment areas” in the U.S. The payments are brokered by politically connected EB-5 Regional Centers, which often rake off hefty fees.
As for those targeted unemployment areas? Critics charge that they are often nothing more than elaborately gerrymandered maps drawn from census tracts to create fictional qualifying districts.
The program is a magnet for fraud. Estimates vary, but the best guess is that around $15 billion in EB-5 cash has come into the country in the last decade. Part of the problem is that EB-5 is so loosely regulated, it’s difficult to follow the money. Real estate developers love EB-5’s lax guidelines and easy financing opportunities.
Senate Minority Leader Chuck Schumer is a huge fan of EB-5. Schumer’s longtime political ally, developer Bruce Ratner, built the Barclays Center sports arena and Atlantic Yards development in Brooklyn with $500 million in EB-5 funds. Ratner has since walked away from the project with a hefty profit.
Former Virginia Governor Terry McAuliffe is a beneficiary of the EB-5 program. McAuliffe and Tony Rodham—Hillary Clinton’s brother—raised about $46 million from EB-5 investors for their GreenTech Automotive electric-car company. Greentech filed for bankruptcy in February.
Former Senate Majority Leader Harry Reid also appears to have crossed paths with EB-5. According to Cause of Action, Reid may have improperly intervened to assure EB-5 financing for the SLS Las Vegas Hotel and Casino project. Reid’s son and his law firm were legal counsel to SLS, a major Democratic Party donor. Reid denies any wrongdoing. The Los Angeles Times reports that sixty Chinese EB-5 investors are now suing SLS for failing to deliver on green card promises.
President Trump has benefited from EB-5 through a $40 million program investment in a Trump-branded luxury hotel in Austin. Senior adviser Jared Kushner’s family raised $50 million in EB-5 funds for a New Jersey project. Mr. Kushner’s sister recently got in trouble for hawking EB-5 visas in China. The White House responded with a statement saying it was “evaluating wholesale reform of the EB-5 program.”
Last year, I outlined some of the regulatory changes that might reform EB-5. Congress kicked the decision down the road, but a reform moment is upon us again. The EB-5 Regional Center Program expires September 30. The regional centers handle the vast majority of EB-5 visas, so killing the centers in effect kills the entire EB-5 program.
Some critics want to end EB-5, others want to mend it. Swamp critters fear both approaches. They want to see the status quo continue.
Doing nothing sends a signal, too.
Micah Morrison is chief investigative reporter for Judicial Watch. Follow him on Twitter @micah_morrison. Tips: [email protected]
Investigative Bulletin is published by Judicial Watch. Reprints and media inquiries: [email protected]