EB-5 Centers Unwind as the Clock Runs Out
EB-5 regional centers, where wealthy foreign nationals invest funds to obtain U.S. green cards, missed a congressional deadline for renewal last week. This looks like the end at last, or is it?
The scandal-ridden program (read about typical swindles here and here) has been resurrected in the past by legislative legerdemain. Sen. Chuck Schumer, D-New York, rescued EB-5 in 2018, and could do so again.
Yet as regional centers were recently operating at barely 1 percent of capacity, with more centers closing or removed amid ongoing allegations of corruption and fraud, is there any reason to keep bending rules to keep this cash-for-visas scheme going?
Promoters remain bullish. “The EB-5 Regional Center Program is a valuable asset for the American economy and many senators’ constituents do not want it gone,” writes EB-5 Daily.
In fact, EB-5 has been spiraling downward. According to data compiled by the Center for Immigration Studies (CIS), in December 2018, there were 880 regional centers; by February of this year, the number had fallen 25 percent, to 673. The remaining centers are virtually moribund. Just nine centers filed visa applications in the first quarter of 2021.
CIS figures that regional center ranks may actually be thinner than reported because the Biden administration has stopped publishing data about them, making the program more opaque.
In earlier days, 80 percent of EB-5 visas went to Chinese-born investors. Last year, a group of House Republicans formally asked the Government Accountability Office to investigate. “The CCP [Chinese Communist Party] may be abusing the program to gain access to U.S. permanent residency for their members,” the lawmakers charged.
While there is no consensus on how — or even if – the three-decade-old “pilot” program fulfills its intended mission of creating jobs in economically distressed areas, regional centers must now rely, again, on legislative trickery to resume operations (such as they are). A federal magistrate threw them a bone last month by easing minimum investment requirements. But that’s no solution, and may actually invite more fraud.
As efforts to reform EB-5 and improve oversight remain gridlocked on Capitol Hill, regional centers are counting on more backroom trickery to save them. It’s not a good look, and ultimately it degrades the value of a U.S. visa.