Senators struggle to bridge divide on foreign investor visas

Senators struggle to bridge divide on foreign investor visas
© Greg Nash

Senators squabbled Tuesday over the future of a controversial investor visa program and called on top immigration and securities departments to crack down on rampant abuse.

The Senate Judiciary Committee grilled officials from the U.S. Citizenship and Immigration Services (USCIS) and Securities Exchange Commission (SEC) on how agencies can step up oversight of the EB-5 visa program

But the biggest fight was with each other over whether the program should survive.

Senate powers are divided over the program, which lures cheap foreign capital on the promise of eventual citizenship. Despite agreements about ramping up oversight and transparency, a December reform bill sponsored by Senate Judiciary Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyGrassley: 'Good chance' Senate panel will consider bills to protect Mueller Overnight Finance: CBO to release limited analysis of ObamaCare repeal bill | DOJ investigates Equifax stock sales | House weighs tougher rules for banks dealing with North Korea GOP state lawmakers meet to plan possible constitutional convention MORE (R-Iowa) and ranking Democrat Sen. Patrick LeahyPatrick Joseph LeahyOvernight Defense: Senate passes 0B defense bill | 3,000 US troops heading to Afghanistan | Two more Navy officials fired over ship collisions Senate passes 0B defense bill Live coverage: Sanders rolls out single-payer bill MORE (Vt.)  failed after senators fought back to protect home state interests. 

"How many more intelligence reports are needed to understand the problems?,” asked Grassley in the hearing. “How many more projects in midtown Manhattan at the expense of rural America need to be highlighted? How many more headlines are needed before the program is going to be fixed?"

Evan as government investigations exposed rampant fraud and national security issues with the program, EB-5 visas have exploded in popularity, bringing billions of investment in U.S. businesses. The number of visas granted jumped from 3,000 in fiscal 2011 to over 9,000 in fiscal 2014, according to data from the State Department.

Sen. Chuck SchumerCharles (Chuck) Ellis SchumerSenate Dems hold floor talk-a-thon against latest ObamaCare repeal bill This week: Senate wrapping up defense bill after amendment fight Cuomo warns Dems against cutting DACA deal with Trump MORE (D-N.Y.) joined Sens. John CornynJohn CornynNew GOP ObamaCare repeal bill gains momentum Week ahead: Senators near deal to stabilize ObamaCare markets GOP eying 'blue slip' break to help Trump fill the courts MORE (R-Texas) and Jeff FlakeJeffrey (Jeff) Lane FlakeCorker pressed as reelection challenges mount -trillion debt puts US fiscal house on very shaky ground Senate votes down Paul's bid to revoke war authorizations MORE (R-Arizona) to block the Grassley-Leahy bill last December. He’s called it an attack on urban investment and claimed the bill would hurt projects in wealthy areas that draw workers from nearby poor neighborhoods.

"This is not an issue of reforming,” said Schumer, who’s slated to lead Senate Democrats in the next Congress. "There was a regional fight, and there was an idea that urban areas like New York shouldn't receive EB-5 money."

Grassley and Leahy reject Schumer’s urban vs. rural framing. They’ve said their fixes were meant to bolster economies in low-income areas — what they call the original focus of the program.

“I'm not trying to keep rich neighborhoods in New York or Texas or elsewhere from getting capital. But they shouldn't be getting it all, and they shouldn't be getting it at a discount,” said Leahy, whose home state hosts a popular ski resort funded by the program. 

“I want a fair share to rural and urban poor areas,” he said. “Affluent areas can take care of themselves.”

Even with regional divides, most senators insisted on fixes to fraud and national security blind spots to preserve economic growth the program brought to their states. 

But Sen. Dianne FeinsteinDianne Emiel FeinsteinDems call for action against Cassidy-Graham ObamaCare repeal Feinstein pushes back on Trump’s N. Korea policy Feinstein on reelection bid: ‘We will see’ MORE (D-Calif.), whose state has the most EB-5-funded businesses, said the program should lapse, citing dozens of fraud cases against business in California. 

“I don't believe visas should be sold,” Feinstein told The Hill last week. "That's unfair, and from what I've seen, there may be good projects, but I've also seen some proposals that I would not call good projects, so I'm basically opposed to it."

Agency officials asked senators for more authority to weed out fraud and track investor money back to its source. 

Nicholas Colucci, chief of the USCIS Immigrant Investor Service, called for expanded ability to collect data and check in on EB-5 businesses. He also said his department has bolstered its staff and expertise to monitor the program. 

Stephen Cohen, associate director of the SEC’s enforcement division, highlighted successful anti-fraud cases and consulting with USCIS, but said his agency only reviews specific fraud cases, not applications, since it doesn’t administer EB-5. 

Grassley dismissed those efforts, calling them “a bland attempt to fix the program” and “window dressing."