A lengthening line for U.S. investor visas suggests that affluent Chinese nationals see them as a good deal. It’s no bargain for America.
The growing backlog of approved EB-5 petitions now translates into a 10-year wait for Chinese investors seeking to enter the U.S. through the controversial visa program.
More than 10,000 approved petitioners await EB-5 visas, with most of the applicants from China. Foreigners get on the path to permanent residency by investing $500,000 to $1 million in purported job-creating ventures here.
A market-driven response would simply up the ante. The proposed RAISE Act does that by introducing a cash-based point system; the more an applicant ponies up, the more points he or she earns. For example, an EB-5 seeker would secure six points toward a required 30 by committing $1.35 million. A $1.8 million investment would net 12 points.
But bigger buy-ins don’t address EB-5’s deeper shortcomings. Since its inception, the program has been riddled with fraud, abuse and national-security concerns. Hiking the financial requirements merely attracts more affluent players.
The EB-5 accountability system, such as it is, is opaque. The U.S. Citizenship and Immigration Services, which administers the program, does not provide essential information about EB-5 applicants, operators and their investments. Private “regional centers,” which collect and control billions of dollars through the federal program, are shadowy entities that run with little or no public oversight.
EB-5 investment funds are poorly vetted, and there are no prohibitions against foreign governments owning or operating regional centers. Background checks are not required.
“This raises serious questions about whether foreign governments are selling U.S. green cards to their citizens,” Sen. Charles Grassley, R-Iowa, said.
Meantime, EB-5 promoters game the system. Log-jammed Chinese applicants are now advised to jump the queue by obtaining E-2 nonimmigrant investor visas through Grenada – landing themselves and their families in the U.S. within months. They can reside here while their EB-5 priority dates become current.
EB-5’s problem isn’t a decade-long line of Chinese nationals. The problem is its premise: that foreigners can buy their way into America via speculative, specious and shadowy job-creating schemes. EB-5 employment claims are not based on direct, verifiable jobs, but instead on vague estimates and economic modeling that include “indirect” jobs.
Earlier this year, a Chinese couple was accused of bilking EB-5 funds. Some $13 million was allegedly transferred back to a marketing firm in China and $7 million was stashed in the wife’s personal bank account. None of the funds were used for U.S. job-creating ventures.
Expedited entries, steeper buy-ins and Grenadian workarounds are just lipstick on a pig. As long as EB-5 and its regional centers operate under weak or nonexistent oversight by USCIS, the fraud will continue.