Sigh. Even my venerable, beloved New York Times - the second best written English-language newspaper on earth (second only to the UK's consistently brilliant Financial Times) - is vulnerable to the temptation of hype for sake of engaging readership. Consider the opening line of today's big piece on the EB-5 visa by Ron Nixon:
"The easiest way to gain entry into the United States is not to walk across the border in the dead of night. It is to write a check."
As a former U.S. Visa Officer who, back when dinosaurs roamed the earth, served as Fraud Officer in the U.S. Consulate General in Ciudad Juarez, Mexico, when it was the single largest immigrant visa processing facility on the planet, I respectfully beg to disagree with both Mr. Nixon's opening line and with the nonsense sputtered by Senator Dianne Feinstein and the other always-opiniated-yet-conveniently-clueless folks in Washington bad-mouthing the EB-5 for several reasons:
- The process of structuring a legally compliant EB-5 project, navigating the nebulous bureaucracy of ever-changing rules, identifying a vetted, accredited foreign investor and having the investor and family journey through a 3-4 year process fraught with unexpected surprises and with legally-mandated economic risk is NOT easier than hopping the fence at the Rio Grand. (Well, unless Trump wins and gets his wall, I suppose.)
- Besides illegally entering the U.S., there are a zillion other ways to try to get a green card. (At one point, during the long-forgotten Stateside Criteria program which let foreigners in the U.S. marrying US Citizens process in border posts instead of returning home to their country, we were tracking an 80% marriage fraud rate. And it didn't take 5 years and a half million dollars, just a notario in Queens with a plaster wedding cake and a Polaroid.
- The vast majority of illegal aliens in the U.S. are folks who entered legally and overstayed their visas...visit Miami Beach sometime if you don't believe me.
- The EB-5 visa - despite the abuse, the horror stories, and all the bad guys we've heard about -- is providing the SINGLE MOST POWERFUL source of Foreign Direct Investment in the U.S. during an unprecedented timeof global anxiety. (According to today's NYT article, some $8.7 billion in EB-5 capital has created 35,140 jobs since October 2012...and that's BEFORE EB-5 got in full gear as it is today.)
- Jobs by the THOUSANDS have been created in the U.S. via the EB-5 and there is nothing wrong whatsoever with making U.S. residency available to wealthy qualified foreign investors seeking a better life in the U.S. for their family. Success should NOT, Senator Feinstein, disqualify a person from pursuing U.S. residency.
Today's VERY necessary hearing before the Senate Homeland Security Committee, as described in the NYT article, is indeed a belated response to a much-deferred problem. The largest and most politically powerful EB-5 Regional Centers have spent millions delaying and deferring the necessary reforms to EB-5 because the economic stakes are too high: take away the dual fictions of false Targeted Employment Areas (TEAs) cobbled together to permit a luxury highrise to be classified as located in a "disadvantaged" area and absurd logic of crediting 100% of tenant occupancy as "new job creation" and their whole model crumbles: EB-5 investors will NOT spend $1M on their megaprojects once TEA gerrymandering abuse is eliminated nor will their job creation models withstand a "real world" tenant occupancy calculation (such as the eminently generous 30% proposed by USCIS economists last year and ferociously opposed by Big EB-5). In short, EB-5 reform means no more cheap money for the megadevelopers who spent millions on lobbyists last year to prevent ANY change to the current system they are milking.
Fortunately, we have folks like Senator Chuck Schumer, Democrat of New York, who actually bother to read the memos and who can distinguish the "wheat" of high-caliber EB-5 programs creating REAL jobs in the rural areas where they are desperately needed and following the letter and spirit of the EB-5 visa as intended by Congress from the "chaff" of monster players in the EB-5 sector determined to perpetuate the abuses which lead to silly opening lines in otherwise intelligent and important articles like today's NYT piece.
It's time for reform and time to level the playing field in EB-5.