BECOMING A PERMANENT resident of the United States is often a difficult and time-consuming process—that is, unless you’ve got the cash. The EB-5 Immigrant Investor Program was established by Congress in 1990 to encourage foreign investment in the United States. Under the program, investors are offered permanent residency if they spend $500,000 to $1 million on projects or business in the United States and, in the process, create at least ten jobs.
The problem? As The Hill reports, U.S. companies – most notably GreenTech, the electric car company started by Virginia gubernatorial candidate Terry McAuliffe – are using the program to attract foreign capital. GreenTech allegedly “guarantee[d] returns” for EB-5 investors, which has attracted unwanted media (and regulatory) attention. Even worse, in July, The Monitor, a regional Texas newspaper, reported that the FBI raided a McAllen, Texas company that exploited the EB-5 program to create a Ponzi scheme in which the investment money was used to buy luxury goods and pay off legal settlements for wealthy Mexicans who sought to fast-track their residency in the United States. Disturbing, yes, but is this an isolated case or is the EB-5 program ripe for exploitation?
Lobbyists argue the former. The Hill notes that McAuliffe’s company would likely not have come under such extensive scrutiny if McAuliffe weren’t embroiled in a tense gubernatorial race. Further, lobbyists argue that the program maintains strict regulatory standards, and say that they welcome even tougher oversight. Further, the EB-5 trade group Association to Invest in USA claims that the program has so far attracted $2.2 billion in GDP to the U.S. economy and supported 28,000 jobs between 2010 and 2011.
There’s a lot of money at stake for lobbyists and investors alike, and The Hill reports that both have begun a push to renew the program before it expires in 2015. If the program isn’t renewed by then, lobbyists fear that Congressional gridlock will mean the end of the program. While the government is shutdown, lobbyists have only to hope that the regulatory questions EB-5 has raised will subside. In the meantime, they will continue to trumpet the program’s successes with an eye toward 2015.
