The program provides U.S. residency to foreign citizens who invest $500,000 in a job-creating U.S. business. Developers plan to use it to fund a convention hotel in downtown Des Moines.
The Des Moines hotel should still qualify, but the proposed bill makes the project riskier because it only extends the investment program for a short period, said Patrick Hogan, president of CMB Regional Centers. CMB is the Quad Cities-based business brokering the hotel's foreign investment deal.
A digital rendering, looking northeast, shows the Hilton convention hotel proposed for downtown Des Moines. It would be eight stories tall and 320,000 square feet
Grassley and Sen. Patrick Leahy (D-Vermont), the ranking members of the Senate Judiciary Committee, worked for months on a bill to overhaul the program. It would have extended EB-5 for five years, increasing the ability of national security agencies to investigate foreign investors and businesses that broker the deals. It would have also increased the minimum investment and directed more of the investments toward rural and impoverished areas.
Critics of the program point to several cases of fraud. Grassley has said the current program fails to prevent terrorist or spies from gaining visas and has accused developers of gerrymandering districts to build glossy high-rises in rich neighborhoods with EB-5 money earmarked for poor and rural areas.
“The program’s abundant loopholes and lack of regulation have created a virtual playing field for unethical gamesmanship and con artists.”
Advocates for the program say it spurs investment and brings job creators to the U.S.
Hogan, who has advocated for increased federal oversight of EB-5, called the extension without changes a “screwjob” pushed by real estate interests.
“This process was hijacked by the New York billionaires and the other people abusing the program,” he said.