Grassley Pushes for Quick Executive Actions to Curb EB-5 Visa Abuse

WASHINGTON – Senate Judiciary Committee Chairman Chuck Grassley called on the Homeland Security Secretary to expedite proposed regulations targeting abuse and national security concerns in the EB-5 investor visa program, and to clarify that the department is processing EB-5 applications in a fair and transparent manner. The request follows a recent extension of the EB-5 program without any reforms and a reported pitch by Kushner Companies implying that potential investors should invest soon to avoid changes in program rules.

 

The EB-5 program, which has been riddled with well-documented fraud and national security vulnerabilities, was extended last week without any reforms, despite efforts by Grassley and others to restore integrity in the program. Regulations proposed by the Obama Administration and under consideration by the Trump Administration would address some of the program’s weaknesses. Investors typically face a two-year wait for the limited number of EB-5 visas. In a letter to Homeland Security Secretary John Kelly, Grassley pointed out that, given the backlog of applicants, new investors would be subject to the program’s rules at the time their visas become available, despite the comments made by representatives of Kushner Companies.

 

 

In the letter, Grassley called on the Trump Administration to continue moving forward with the regulations in an open and transparent manner.

 

Senior White House Advisor Jared Kushner, the previous CEO of Kushner Companies, has divested from Kushner Companies, in compliance with Office of Government Ethics requirements.

 

May 10, 2017

 

 

The Honorable John Kelly

Secretary

U.S. Department of Homeland Security

Washington, D.C. 20528

 

Dear Secretary Kelly:

 

I am writing to request clarification of the Department’s position regarding the processing of EB-5 petitions in light of recent statements by Nicole Kushner Meyer, and that you move expeditiously to approve the proposed regulations that correct serious flaws in the EB-5 program. I’m sure you’re aware that Ms. Meyer recently made a pitch to potential real estate investors in Beijing at an event hosted by a Chinese company working with the Kushner Company to raise funds for a luxury apartment complex in New Jersey. In her speech, Ms. Meyer touted the EB-5 “golden visa,” which permits investors of $500,000 or more to obtain a U.S. green card, and alluded to her brother Jared Kushner’s White House position in a manner that some say was improperly suggestive.^[1] One of Ms. Meyer’s colleagues urged attendees to “invest early, and you will invest under the old rules.”^[2]

 

As you know, EB-5 applicants ordinarily wait at least two years for a petition to be processed and for visas to become available. Ms. Meyer’s statements, however, could seem to imply that foreign nationals who invest with the Kushner Company will receive special treatment and expedited approval. It is appropriate for the Department to clarify and affirm that no foreign investors will receive preferential treatment, that applications will be processed in the order in which they are received—subject to any existing backlog—and that future applications will be subject to the proposed regulations, when approved.

 

As I have noted on many occasions, the EB-5 program desperately needs to be reformed. Numerous sources have documented rampant corruption, fraud, and national security risks. For example, the FBI recently raided a California regional center that defrauded investors out of millions of dollars while facilitating dozens of fraudulently obtained green cards, including several procured for investors who are on a Chinese government list of most-wanted fugitives.^[3] Others “invested” money loaned to them for a fee by the regional center, and “[n]o real construction took place at any of the proposed project locations[.]”^[4] About 30 of the investors received some or all their money back—amounting to about $10 million—but concealed the refunds from U.S. officials and have continued to pursue legal permanent residence. Among many other examples, over the past five years the Securities and Exchange Commission has pursued cases involving hundreds of millions of dollars in fraudulent investment schemes, and in 2013 ICE’s Homeland Security Investigations unit warned of serious national security and technology proliferation concerns.^[5] These abuses are amplified because investment levels—which have remained static since 1990—and egregious gerrymandering of Targeted Investment Areas, rob the U.S. economy of billions of dollars each year.^[6]

 

The American people are relying on you to prevent fraud, promote security, and protect the homeland. DHS’s efforts in implementing new regulations to that effect are integral to strengthening program integrity and benefitting the U.S. economy. I strongly support the proposed regulations, and support the Trump administration’s efforts to move forward with implementing these necessary changes in an open, and transparent manner.

 

Thank you in advance for your cooperation with this request. If you have any questions, please contact me or Katherine Nikas or Brad Watts of my Judiciary Committee staff at (202) 224-5225.

 

Sincerely,

 

 

Charles E. Grassley

Chairman

 

Cc: The Honorable Mick Mulvaney

Director

U.S. Office of Management and Budget

 

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