Chinese Governments and EB-5 Projects — What the Witness Did Not Report
In my recent blogpost about Tuesday's Senate hearing on the EB-5 program, I reported that the DHS official in charge of the program, Nicholas Colucci, did not give a substantive response to a question from the Chairman of the Judiciary Committee, Sen. Chuck Grassley (R-Iowa), about the involvement of Chinese governments in EB-5 projects in the United States.
More specifically Grassley asked (approximately), "Can you tell me that no Chinese government owns a regional center?"
There are more than 700 regional centers, all DHS-licensed and mostly for-profit entities, that play the middleman role between foreign investors and U.S. developers. Colucci must — or should — know that the website of one of those centers, MCIG, which has an office in Miami,
This strongly suggests municipal ownership; private corporations, at least in this country, are unlikely to have an address in a city hall. Is the USCIS staff so dense that they did not shoot a memo up the chain of command when they first noticed this, you will pardon the expression, red flag? One would hope not.
Two notes about Chongqing: Older readers will recognize an earlier spelling, Chungking, as that of the Nationalist Chinese capital of the country during World War II.
Those attuned to the current bitter rivalries in Chinese politics will recognize Chongqing as the home base of Bo Xilai, the Communist party city boss who was sent to jail after he crossed the national party leadership. A journalism grad student I know, who is Hong Kong-born, wondered in a recent conversation if the Bo family had been involved in the regional center.
MCIG stands for Miami Chinatown Investment Group; it is currently sponsoring an ambitious EB-5 project that would build a near-Hollywood-size cluster of movie studies in South Florida.
While the MCIG tie to the Chongqing city hall may be a bit obscure, there is a much more widely reported example of a somewhat similar arrangement. It involves a huge development in Brooklyn that was first called Atlantic Yards and then, presumably because of its Chinese investors, was renamed Pacific Park.
Norman Oder, who has reported extensively about the EB-5 role in this development, has written: "We got a good glimpse of the Greenland Group, the Shanghai government-owned company buying 70 percent of the remaining Atlantic Yards project" (the "remaining" being the non-EB-5 part of the project).
In a sense, the Chinese governments are throwing and catching their own forward passes. Chinese multimillionaires take money out of the Chinese economy to buy green cards here and this provides profits, in this case, to the Shanghai government's stake in an American real estate development.
But DHS executive Colucci isn't willing to talk about that.
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