Shameless EB-5 Shenanigans in Washington
The U.S. government began its attempt in earnest to reform our broken EB-5 system over three years ago, after more than a decade of flagrant abuse by Big EB-5. Fabricating false “targeted employment areas” which were truly located in America’s richest neighborhoods, shamelessly continuing to pay kickbacks deemed illegal by the SEC to unregistered foreign agents, and otherwise destroying the purpose of EB-5 – to create American jobs where they are most desperately needed – Big EB-5 has for well over a decade selfishly mutated EB-5 into a shameless source of cheap capital for megacompanies.
What has been unveiled as proposed new EB-5 legislation in the past few days proves conclusively that Big EB-5’s lobbying money has worked, that all meaningful reform has been gutted…and that Regional Centers like American Venture Solutions, offering TRUE TEA projects in genuinely impoverished American areas, will continue to lose investors to Manhattan skyscrapers. If the law takes effect, it is proof positive of the power of lobbying dollars and the spinelessness of the U.S. Congress.
Innocuously titled the “Immigrant Investor Visa and Regional Center Program Comprehensive Reform Act”, it is an EMBARRASSMENT to those who have in earnest been seeking reform and relief from the endemic abuse of EB-5 investors. It ensures that EB-5 will continue to benefit only rich urban areas by-making the investment advantage to bona fide TEA projects financially insignificant, expands the definition of high-unemployment/rural criteria to let even more big-city highrise projects sneak into false “TEA” status, -guarantees that luxury real estate projects in major cities will continue to harvest virtually 100% of EB-5 dollars and –worse of all for existing and future EB-5 investors – absolutely guts the transparency and Regional Center review protocols defined in all earlier versions of proposed reform legislation. I will not even purport to address this more specifically since the brilliant Suzanne Lazicki has again done so comprehensively in her most recent Lucid EB-5 Blog
Regional Centers like American Venture Solutions, who find accredited EB-5 investors one at a time through their own efforts will be punished financially, while Big EB-5 players who round up investors by the dozen through illegal payments to migration agents (who will make up whatever lies necessary to close an investor) will continue to do so with more freedom than ever.
As EB-5 experts around the U.S. frantically try to interpret this ill-conceived, prostituted version of what we expected to be actual reform, Big EB-5 is no doubt celebrating. I’ll give them credit for one thing and that is in taking their institutional sleaziness to a whole new level: the notion that this pathetic “reform” draft was crafted solely by the U.S. government, which sprung it upon an unsuspecting IIUSA is absolute rubbish. This bill was written by Big EB-5 lobbyists and the millions Big EB-5 has spent to perpetrate this travesty upon America’s most powerful job-creating visa are peanuts when compared to the money they will save through the cheap capital provided by foreign investors for those fancy highrises.
We have no idea if this bill will become law and all the speculation you read online is nothing but that – speculation. May there be enough politicians with integrity in Washington to kill it. It is written to make giant developers wealthier…while placing the interests of EB-5 investors and of America’s true high-unemployment areas at the rock bottom.
May 23, 2022