Reform the Scandal-Plagued EB-5 Visa Program

A sign of Qiaowai Group (bottom) is pictured at the lobby

to its office in Beijing (Reuters: Jason Lee)

Its potential for abuse is illustrated by a Trump-family member pitching it as a benefit to Chinese investors..

Nicole Kushner Meyer’s troubling pitch to Chinese investors — invest in her real-estate project, get a U.S. visa — has inadvertently performed a public service: She’s brought much-needed attention to the scandal-plagued EB-5 visa program, and added yet another compelling reason to overhaul it.

Meyer is a higher-up with real-estate firm Kushner Companies and, of course, sister to presidential adviser and son-in-law Jared Kushner, CEO of Kushner Companies until assuming his White House post in January. Meyer recently spent time in Beijing, encouraging investors to help finance One Journal Square, a 1,467-apartment luxury tower in Jersey City, N.J., across the river from Manhattan. The project is slated to cost upward of $400 million. The sweetener for investors is the possibility of obtaining an EB-5 visa.

LINK: Jared Kushner’s sister offers US visas to Chinese 

investors for family’s real estate development

The EB-5 (employment-based, fifth preference) visa program was established in 1990 as a way to attract foreign capital for domestic commercial projects, especially in depressed areas. To qualify for an EB-5, an investor must invest $1 million in a new commercial enterprise — that is, any for-profit business established after November 29, 1990 — that will create at least ten new jobs for American workers. In “Targeted Employment Areas,” state-designated and Department of Homeland Security–approved areas where unemployment is high, the investment is $500,000.

As a strategy for attracting capital into the country, the idea’s simplicity is appealing. Furthermore, the EB-5 investment threshold is significantly lower than that of similar programs in other countries (e.g., $2.9 million in the United Kingdom) and has fewer strings attached. The U.S. Customs and Immigration Services (USCIS) estimates that, since 2012, the program has brought $8.7 billion in foreign capital into the country and created 35,000 jobs.

However, the program is rife with fraud, both foreign and domestic. With potentially more than $1 million changing hands with every transaction, developers, lawyers, and applicants all have strong incentives to exploit the system.

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