Judiciary Chair: Spending Deal Makes No Change to Visa Program That 'Poses Significant National Security Risks'

By Michael W. Chapman | December 17, 2015 | 7:08 PM EST

Sen. Charles Grassley (R-Iowa). (AP)

(CNSNews.com) – An ongoing visa program that allows foreigners who invest in U.S. businesses to obtain a green card and a pathway to citizenship is “plagued by fraud and abuse” and “poses significant national security risks,” yet it was unchanged and fully funded in the omnibus appropriations bill, said Senator Charles Grassley (R-Iowa) today.

The House is scheduled to vote on the $1.1 trillion omnibus spending bill, the Consolidated Appropriations Act of 2016, on Friday, Dec. 18.

In his Thursday statement on the Senate floor, Senator Grassley, who is chairman of the Judiciary Committee,  said, “At 1:30AM Wednesday morning, an omnibus appropriations bill was filed to keep the government operating for the remainder of the fiscal year.  This bill, which will be voted on by the House on Friday, includes a straight and clean extension of a program called the EB-5 Immigrant Investor program.”

“This program has been plagued by fraud and abuse,” said the senator. “But more importantly, it poses significant national security risks.  Allegations suggesting the EB-5 program may be facilitating terrorist travel, economic espionage, money laundering and investment fraud are too serious to ignore.”

“Yet, the omnibus bill fails to include much needed reforms,” he said.  “The spending bill being considered by the House and Senate is a major disappointment.  I’m frustrated that, despite the alarm bells and whistleblowers warning us about the program, Republican and Democrat leadership in the House and Senate decided to simply extend the program without any changes.  This was a missed opportunity.”

In the EB-5 Immigrant Investor Program, foreigners (and their spouses and unmarried children) are able to apply for a green card (permanent residence) in the United States if they invest at least $1 million in an American business or at least $500,000 in a U.S. business that is in a high unemployment or rural area, what is called a Targeted Employment Area, according to the U.S. Citizenship and Immigration Services.

Senator Grassley further said, “It is widely acknowledged that the EB-5 program is riddled with flaws and corruption.  … The Government Accountability Office, the media, industry experts, members of congress, and federal agency officials, have concurred that the program is a serious problem with serious vulnerabilities.”

Grassley then quoted a whistleblower who testified about problems in the EB-5 program in June.

(AP photo.)

“EB-5 applicants from China, Russia, Pakistan and Malaysia had been approved in as little as 16 days and in less than a month in most,” said the whistleblower.  “The files lacked the basic and necessary law enforcement queries… I could not identify how USCIS was holding each regional center accountable. I was also unable to verify how an applicant was tracked once he or she entered the country. In addition, a complete and detailed account of the funds that went into the EB-5 project was never completed or produced after several requests. During the course of my investigation it became very clear that the EB-5 program has serious security challenges.”

Senator Grassley also noted Fortune magazine had reported how one man used the EB-5 program to cheat 209 potential immigrants out of $147 million.

In another example, the Securities and Exchange Commission discovered that a fake ethanol plant was supposed to be built in Kansas, but two men deceived the foreign investors.

In November, “the National Law Review reported another case in which the Securities and Exchange Commission filed suit against the owner of a regional center who allegedly stole $8.5 million in EB-5 funds,” said Grassley.

The senator noted that he and Sen. Pat Leahy (D-Vt.) had introduced a bill to reform the EB-5 program, S.1501, The American Job Creation and Investment Promotion Reform Act. 

However, lobbying efforts by the Chamber of Commerce, the Real Estate Roundtable, and other groups apparently exerted enough influence to stymie congressional leadership on the reforms, according to Grassley.

U.S. Capitol.  (AP) 

He then asked for an ABC News report about $30 million allegedly spent in lobbying efforts against reform of EB-5 be inserted into the congressional record.

In his concluding comments,  Grassley said,  “I was for reform.  I wanted to make it better. But, now I’m not so sure reforms are possible.  It may be time to do away with it [EB-5] completely.”

“The next 10 months will be spent exposing the realities of this program,” he said.   “As Chairman [of the Senate Judiciary Committee], I will exercise oversight of this program even more than I have,” he said.   I will ask tough questions and make more recommendations.”

“My quest to either have EB-5 reforms or end the program has just begun,” said Grassley. “This is not the end.  This is just the beginning.”


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Michael W. Chapman
Michael W. Chapman
Michael W. Chapman