America’s troubled cash-for-visas program is attracting a surge of applicants from India. That won’t make it any better.
Applications from India for the EB-5 program — which issues green cards to foreign investors (and their families) who pay $500,000 and create 10 jobs in the United States – are rising in response to the Trump administration’s crackdown on abuses in the H-1B skilled-worker visa program heavily used by Indian nationals.
“EB-5 is the quickest and most affordable option for many Indians,” said Brian Ostar of EB5 Capital, a private firm that serves foreign investors.
Long used by wealthy Chinese nationals, EB-5 has well-documented problems of its own.
Contrary to its original intent of spurring investment and creating jobs in America’s depressed rural backwaters, EB-5 funnels most of the money to wealthy urban centers. Among the notable practitioners, Jared Kushner, President Trump’s son in law, raised $50 million through EB-5 for one of his luxury apartment complexes.
Such projects are facilitated by creative gerrymandering of Census tracts. In the process, the $1 million investor buy-in that would otherwise be required for a green card is cut in half to $500,000.
Weak disclosure rules have enabled abuse and fraud to plague the program. Relevant employment data remain sketchy at best. Critics, led by Sens. Charles Grassley, R-Iowa, and Patrick Leahy, D-Vt., say EB-5 effectively sells citizenship to rich immigrants who can’t get into the country through other immigration channels.
“They get cheap money for their projects and the public has no clue whether it’s generating economic benefits for America,” says Michael Gibson, managing director USAdvisors, which analyzes EB-5 projects.
With little oversight or public accountability by the U.S. Citizenship and Immigration Services, which is ostensibly responsible for oversight, private EB-5 “finders” and regional centers are opening recruitment offices in New Delhi and Mumbai. Indian EB-5 applications are on track to at least double annually for the next several years, surpassing South Korea, Vietnam and Brazil.
The EB-5 industry is bullish about its new foreign-investor prospects, but in the absence of fundamental reforms the tarnished “golden visas” will bring more trouble to America’s shores.
Launched as a “pilot” project more than 25 years ago, the program has lurched out of control. Ignoring the danger signs, Congress simply kicks the can down the road with repeated extensions.
“EB-5 is too flawed to continue,” Grassley concludes, listing 20 systemic problems ranging from rubberstamping bureaucrats to national security threats. It’s time to clean it up or shut it down.
