The Immigration Act of 1990 reserves up to 10,000 EB-5 visas each year for immigrants who invest at least $1million, or $500,000 in high unemployment or rural areas, to create or preserve at least 10 jobs. In return, the investor (plus a spouse and children) receives a two-year conditional green card that, if the job-creation goal is reached, can be converted into permanent resident status with a path to citizenship. In 1993, Congress started the Regional Center Pilot Program, which allowed local governments and businesses to create investment pools using money provided by EB-5 visa holders. Instead of individual investors launching businesses themselves, they could simply write a check to an investment pool and count whatever jobs were created as proof that they had put the requisite number of people to work. The program largely floundered until the last recession, after which privately owned regional centers exploded, growing from 74 in 2009 to 697 this year. The government hit its 10,000 visa limit for the first time in 2014, driven in part by regional centers pursuing foreign investors.
However, many feel the program has not been a success. The Government Accountability Office and Homeland Security’s Office of the Inspector General have criticized the program for lack of accountability and oversight. As of May, the government was investigating 59 cases of suspected fraud involving the regional centers. One of the accountability issues is the government’s limited means for verifying whether the investment money is coming from legitimate business activities, and limited oversight on measuring the results of centers’ work.
Senator Dianne Feinstein (D-Calif) has called for ending the regional center program, whose authorization lapses on December 11th. Others, such as Senator Patrick Leahy (D-Vt.) and Senator Charles E Grassley (R-Iowa), have proposed an overhaul they say would address many of these problems and shore up oversight, including using investor fees for an “EB-5 Integrity Fund” to audit the regional centers.
Feinstien’s office has argued that because the private firms getting federal permission to create regional centers are able to design their own districts, this had led to gerrymandering by superficially linking high-unemployment neighborhoods to wealthy ones. EB-5 visas are available for $500,000 invested in “high unemployment or rural areas”. So the district manipulation allows wealthy immigrants to gain Legal status by investing in High End properties that have some minimal link to a higher risk neighborhood. And with the initial approval process only about 6 months for the EB-5 visa, compared to years that many immigrants of lessor means must wait for their employment-based or family related visas, its easy to see how many critics feel its unfair that the wealthy can simply purchase their American passports.