The Register's Editorial: Reform immigrant investor program
Should immigrants be able to buy a visa and gain a path to U.S. citizenship? That's a debate worth having.
Unfortunately, there hasn't been enough debate around the EB-5 program or other little-know aspects of U.S. immigration policy. The federal program allows foreign nationals to become permanent residents in the United States by investing as little as $500,000 in a U.S. business that creates at least 10 jobs.
On the one hand, the program has pumped billions into the U.S. economy, and it allows developers of projects like the convention hotel in downtown Des Moines to find low-cost financing.
On the other, the program doesn't exactly live up to the Statue of Liberty's plea,"Give me your tired, your poor, your huddled masses yearning to breathe free." While many immigrants face no legal path to residency or a decade or more in limbo, well-heeled immigrant investors can score a green card in as few as three years.
Adding to the concerns: The EB-5 program has been beset with controversy. Government investigators have found fraud and political favoritism. The FBI has questioned whether investors have terrorist ties. The Government Accountability Office is looking at some of these concerns, as well as the program's economic impact.
In some cases, the immigrants have been defrauded by developers, losing their investments as well as their chance for green cards.
Sen. Chuck Grassley has introduced a bill to reform EB-5. He has targeted one of the biggest problems: While the EB-5 program was intended to benefit areas with high unemployment, developers have cobbled census tracts together to qualify. The result has led to high-rise condos and other developments in wealthy neighborhoods in Manhattan and elsewhere.
Local leaders behind Des Moines' proposed convention hotel have the same scheme in mind, the Register's Joel Aschbrenner reported Sunday. Downtown Des Moines is by no stretch a low-employment area, so developers plan to loop in economically depressed areas to the north and east. But it's questionable how much those neighborhoods will benefit from the hotel.
As now proposed, Grassley's bill would kill the project, said Pat Hogan of CMB Regional Centers, the Rock Island, Ill.,-based company seeking foreign investors for the hotel.
That's unfortunate, but Grassley is right to end the gerrymandering. Surely there's a way to craft a bill that can still attract investors to projects like Des Moines' while stopping abuses.
It's also unfortunate because Iowa has come late to the EB-5 party. The program started in 1990 and boomed after the real-estate bust made bank financing scarce. But the hotel is Iowa's first major real-estate project using EB-5 financing.
Iowa has an ideal opportunity to attract investors, given the relationship it has nurtured with Chinese business and political leaders. When state officials travel to China, or Chinese leaders visit here, the message is the same: Iowa is a great place in which to invest.
Many of those Chinese investors want to get their money, and often their children, out of China. They understand the opportunity that America offers.
The United States benefits from the energy and spirit of immigrants, be they rich, poor, high-skilled or desperate. And those immigrants are changing: In 2013, more immigrants came to the U.S. from both China and India than Mexico, the Census Bureau reported.
Our immigration system needs to change with the times. Add EB-5 to the long list of programs that should be reformed.
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