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 blasts Democrats over unwillingness to probe Clinton GOP and Dems bitterly divided by immigration Thanks to the farm lobby, the US is stuck with a broken ethanol policy MORE (R-Iowa) and ranking Democrat Sen. Patrick LeahyPatrick Joseph LeahyAvalanche of Democratic senators say Franken should resign America isn't ready to let Sessions off his leash Your tax dollars fund Afghan child rape 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. Charles SchumerCharles (Chuck) Ellis SchumerAmerica isn't ready to let Sessions off his leash Schumer celebrates New York Giants firing head coach: ‘About time’ GOP should reject the left's pessimism and the deficit trigger MORE (D-N.Y.) joined Sens. John CornynJohn CornynMcConnell names Senate GOP tax conferees Air Force makes criminal reporting changes after Texas massacre We need a better pathway for allowing civilians to move guns across state lines MORE (R-Texas) and Jeff FlakeJeffrey (Jeff) Lane FlakeGOP strategist donates to Alabama Democrat Sasse: RNC help for Roy Moore 'doesn't make any sense' Sasse calls RNC decision to resume support for Moore 'bad' and 'sad' 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 FeinsteinGrassley blasts Democrats over unwillingness to probe Clinton Avalanche of Democratic senators say Franken should resign Blumenthal: ‘Credible case' of obstruction of justice can be made against Trump 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."