House hones in on controversial investor visa program

Critics of a controversial investor visa program questioned its effectiveness Thursday even as lawmakers split over reform efforts.

The EB-5 visa program lures cheap foreign capital to the United States with the promise of eventual legal status. It has brought billions of dollars in investment, but is riddled with fraud and national security blind spots that lawmakers and businesses want to eliminate.

But lawmakers whose states benefit from the program as is are fighting those who say the program’s original intent has been trampled by wealthy interests.

“Over the years the program has strayed further and further away from what Congress envisioned,” said House Judiciary Committee Chairman Bob GoodlatteBob GoodlatteLawmakers grapple with warrantless wiretapping program House votes to crack down on undocumented immigrants with gang ties House Judiciary Dems want panel to review gun silencer bill MORE (R-Va.) at a hearing on the program. “It is thus not performing at the high level that we deserve.”

While lawmakers largely agree on eliminating fraud and tightening oversight, they’re battling over where the investment money goes. The EB-5 program sets a $1 million minimum for investments, but projects within low-income or high-unemployment areas — known as “targeted unemployment areas” (TEAs) — can take $500,00 investments.

Critics say real estate developers gerrymander luxury projects into TEAs, drawing money away from poor areas.

Lawmakers whose states include the TEA projects defend the practice. They insist that those projects employ workers in poor areas, and argue critics want to draw money away from cities and toward rural areas. 

Power players in the Senate are battling over the program’s future. 

Senate Judiciary Committee 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.) offered a bill last year that would crack down on fraud and national security issues in the visa program, but also seek to redirect money from wealthy cities into low-income urban and rural areas.

Sens. 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.), 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-Ariz.) blocked that measure from being included in last year’s government funding bill. They have an alternative bill that focuses on national security and fraud, while nixing investment adjustments from Grassley and Leahy. Grassley placed a hold on the opposing bill, blocking it from consideration.

Goodlatte and House Judiciary ranking Democrat Rep. John Conyers (Mich.) are sponsoring the House version of the Grassley-Leahy bill.

“There are fundamental questions about how the program is already being used and whether adequate safeguards exist,” said Conyers, who represents Detroit, at Thursday’s hearing. “We don’t know if these jobs are paying a living wage, whether they are providing long-term employment or whether they are employing people in distressed communities.”

About 98 percent of EB-5 projects are located in TEAs, which are drawn by state governments without federal guidance. Goodlatte panned EB-5 projects in New York and Texas that reached up to 200 miles into low-income areas from wealthy neighborhoods. 

Jeanne Calderon, a New York University professor who’s extensively studied the program, said the lawmakers would have to create “clear, unambiguous and objective criteria” to limit TEAs. Lawmakers could risk reversing the program’s recent rapid expansion if they don't, she said.

“[This] requires a delicate balance between appropriately narrowing the scope of the TEA and building in flexibility,” said Calderon. 

While senators squabble over their next step, representatives seemed unified on both reforming TEAs and bolstering oversight.

“There’s no reason that we shouldn’t be able to reach an agreement the stays true to the program’s intentions,” said Rep. Zoe Lofgren (D-Calif.), “so long as it included much needed reforms.”