Publisher's Synopsis
In 1990, when Congress created the EB-5 program, the goal was to create new employment opportunities for American workers. Two years later, Congress established a pilot program which allowed investors to pool their investments in regional centers. The theory was simple: by allocating investors to pool their funds, greater investment would occur, and jobs for American workers would flourish. Twenty-five years later, this pilot program still exists, but it has strayed from its original intent. There are many problems with the regional center program. Jobs created are not direct and verifiable. Less than 10 percent invest in true high-unemployment areas. Almost every EB-5 project uses gerrymandering to qualify as distressed. A luxury hotel in Beverly Hills uses gerrymandering to claim it is located in a distressed community, one of the wealthiest communities in America. This type of abuse represents almost 90 percent of the entire EB-5 program. Currently, aliens must invest $1 million unless they invest in projects in rural or high-unemployment areas, in which case they can invest $500,000. Almost all visas now go to aliens investing at the lower level, meant for rural and poor areas, even when the resulting projects are built in prosperous areas. Investment funds are not adequately vetted, and there are no prohibitions against foreign governments owning or operating regional centers. Background checks aren't required for anyone associated with regional centers. This raises questions about whether foreign governments are selling U.S. green cards to their citizens. Former Homeland Security Secretary Jeh Johnson published proposed rule changes to the regional center program that would stop gerrymandering and increase investment levels. They are a vital first step to returning the program to its original intent, creating new employment for American workers and infusing capital into the distressed rural areas.
