|Reauthorizing the EB-5 Regional Center Program|
|News Releases - Business, Economy & Finance|
|Written by Grassley Press|
|Monday, 12 December 2011 16:12|
Prepared Statement of Senator Chuck Grassley of Iowa
Ranking Member, Senate Committee on the Judiciary
“Reauthorizing the EB-5 Regional Center Program: Promoting Job Creation
and Economic Development in American Communities”
Wednesday, December 7, 2011
Today, this committee will focus on the EB-5 Regional Center program. This program, now 21 years old, was created with the intention to benefit American communities through investment and job creation. Certainly, at a time of economic uncertainty, high national unemployment, and stagnate growth, we must consider all the tools at our disposal to increase economic activity. While I have supported the EB-5 Regional Center program in the past, I do hope to hear how this program can better serve our nation’s needs in the future. Today’s hearing is a way for us to conduct our constitutional duty of oversight. It’s important for us to review the EB-5 program, determine if it’s truly creating jobs, and hear whether the program is increasing economic activity in areas that need it most.
The EB-5 Regional Center program is set to expire on September 31, 2012. I hope to work with the Chairman on re-authorizing a reformed and more cost efficient program, in addition to several other immigration programs that will expire at the same time. We need to enact reforms that will make the EB-5 Regional Center program worth keeping around.
Some may argue that the EB-5 Regional Center program is doing very little to stimulate the economy. I appreciate the administration’s recent attempt to focus energy and attention on reforming the program and increase participation in regional centers. The changes they institute may help, but at the end of the day, one fact remains: the program is simply a way for wealthy investors to buy a greencard – not only for themselves, but for their families. No skills or management experience is needed. One only needs to write a check to gain entry into the United States. While taking a financial risk in projects or businesses in the United States is admirable, evidence suggests that it’s not doing enough to spur real job creation.
Since Congress capped the number of employment based immigrants that are allowed entry into the U.S. each year, it’s important that we utilize those visas to the best extent possible. We must have an immigration system that is based on merit. We should be taking the best and brightest. We can afford to be choosey, so we must elect to provide immigrant visas to those with tremendous skills that will benefit our country in the long term.
So, in that vein, we must figure out where the EB-5 Regional Center program fits into the equation. Is the EB-5 program attracting the individuals we need, or are we simply selling visas to the highest bidders?
I want to take a moment to express serious concern about reports that the EB-5 Regional Center program is creating jobs for people in this country illegally. The U.S. Citizenship and Immigration Services’ Administrative Appeals Office (AAO) reviewed the application for one investor in a South Dakota regional center. The AAO said that the agency was correct in denying his request for greencard status because the employees were in the country illegally. If we’re going to allow wealthy foreign nationals to enter the U.S. under the guise of creating jobs, I’d sure hope that U.S. citizens are the benefactors. I’d like to hear today about how the centers create jobs, how they report this information to the federal government, and whether USCIS is doing substantial auditing of centers to verify the information received from the regional centers.
We must also do a better job of rooting out abuse by EB-5 promoters abroad. Reuters recently reported on how cash-hungry American businesses are working abroad to promote the EB-5 regional center program. Many of these EB-5 promoters are mischaracterizing the program, luring investors here and robbing them of the American dream. In fact, China has reportedly put restrictions on these promoters. When asked by Reuters, both the USCIS and the Securities and Exchange Commission were unaware of any marketing abuses. Maybe it’s time these agencies wake up and figure out what’s truly going on.
I’d like to work with Chairman Leahy on ways to strengthen oversight over the program. I think he may have some good ideas for doing that, including requiring more reporting by the centers and ending centers that aren’t producing as they promised. In addition to restoring program integrity, I think it’s important to consider whether the dollar amounts should be raised. They have remained at $500,000 and $1 million since the early 1990s. Finally, we must close any loophole that allows a foreign investor to bring capital to the table, receive a greencard, and then withdraw his financial support and walk away from the regional center.
I realize we could have testimony from every single regional center in the program citing the benefits that foreign investments have provided their community. I appreciate Mr. Stenger appearing before us again today and sharing with us how the program has benefited Northern Vermont.
Conversely, I look forward to hearing from Mr. North, a fellow from the Center for Immigration Studies. Mr. North will provide a different perspective that exposes some of the problems with the program, and highlight how some bad actors have tarnished the program’s reputation. I also look forward to hearing from Mr. Devine, who has had the experience of overseeing the operation of the program when he worked as Chief Counsel and Acting Director of U.S. Citizenship and Immigration Service.
Thank you for holding this hearing, Mr. Chairman. I look forward to listening to our witnesses.
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