‘Trump did what Congress failed to do for too long. He’s keeping his word to drain the swamp’
WASHINGTON – After years of bipartisan attempts to reform the fraud-laden EB-5 investor visa program stalled in Congress, the Trump administration is implementing new regulations to improve the program for the first time since 1993. Among other reforms, the regulations crack down on a practice that syphons investments away from rural and economically-depressed areas that the program was designed to help. Senator Chuck Grassley (R-Iowa), an outspoken EB-5 reform advocate, issued the following statement:
“For the better part of a decade, I’ve raised concerns about how the EB-5 program has been abused to steer investment away from rural America. Despite an abundance of examples of fraud and national security vulnerabilities in the current system, bipartisan efforts to reform the program through legislation have been repeatedly stymied by big-money interests – the very definition of swamp monsters.
“Thankfully, President Trump is doing what Congress failed to do for too long. By implementing these EB-5 rules, he is keeping his word to drain the swamp and bring new opportunities to rural America as well as communities in need. This rule not only brings more integrity to our immigration system, it also brings new jobs to America,” Grassley said.
The EB-5 program, established in 1990, provides visas to foreign nationals who invest $1 million in new U.S. private enterprises that create additional jobs. The investment threshold is reduced to $500,000 for projects in rural or economically-distressed areas known as Targeted Employment Areas (TEAs). The program later allowed for the establishment of EB-5 regional centers, which pooled multiple investments into a single project.
Grassley first voiced concern about national security vulnerabilities in the investor visa program in 2013 following whistleblower claims that visa applications were being expedited without proper evaluations of criminal or security issues. Around the same time, an internal Homeland Security memo outlined potential security and financial vulnerabilities of the EB-5 regional centers model, including exploitations by Iranian operatives with possible ties to terrorism.
In 2015, Grassley and Senator Patrick Leahy (D-Vt.), then chairman and ranking member of the Senate Judiciary Committee, introduced legislation to improve integrity in the program and restore congressional intent for the program. However, the bipartisan reforms were repeatedly blocked at the behest of big-money interests that benefited from the status quo.
In the face of congressional inaction despite ample examples of fraud, abuse and national security vulnerabilities, Grassley called on the Trump Administration to implement EB-5 regulations. He’s consistently pushed for approval of the administrations proposed regulations, including as recently as last week.
The new rule will raise the standard minimum investment threshold for EB-5 projects to $1.8 million and raise the minimum investment threshold for projects in TEAs to $900,000. Minimum investment amounts will be adjusted for inflation every five years. Finally, in order to crack down on state and local gerrymandering of TEAs, the Department of Homeland Security will make TEA designations directly based on revised requirements in the new rule.