Last weekend th e sister of Jared Kushner, perhaps the most powerful figure in the Trump White House, appeared at a Ritz-Carlton hotel in Beijing to pitch Chinese investors on One Journal Square, a luxury apartment complex in New Jersey. Nicole Kushner Meyer wasn’t shy about her connections to the first family, even though Jared Kushner has divested from any personal involvement in the development. But the potential Chinese investors were eying something more valuable than a hot business opportunity or even access to Trump’s son-in-law. They were after US green cards for themselves and their families.
Under a US visa program called EB-5, wealthy foreigners can obtain temporary resident status if they invest a minimum of $500,000 in eligible business ventures that create at least 10 full-time jobs. After two years in provisional status, the investors and their spouses and minor children receive the coveted green card, becoming lawful permanent residents.
Initially intended to spur investment in economically depressed areas, the program has attracted billions in foreign cash and delivered more than 50,000 foreign visas since its founding, in 1990, while drifting far from its origins as an economic development tool. The vast majority of EB-5 visas are granted to investors from China; the official US immigration services web page describing the program includes a link to a translation in Chinese (and no other language). Kushner’s development company raised roughly $50 million, most of it from Chinese visa applicants, for a different 50-story luxury apartment complex last year, according to Bloomberg News.
The Kushner family’s tone-deaf blandishments have pushed the so-called “golden visa” program into the spotlight, and Meyer has withdrawn from further presentations in China, for now. But the program’s problems are longstanding and bipartisan. A 2013 audit by the Department of Homeland Security found shoddy record keeping and opaque financial arrangements that make it difficult for the government to “prevent fraud or national security threats that could harm the US,” or to demonstrate that the program is improving the US economy or creating jobs.
And it’s far from clear that the projects are helping distressed areas. An investigation by Commonwealth magazine in 2015 found EB-5 visas associated with fancy restaurants, ski resorts, and luxury housing developments all across New England. Developers often manipulate census tracts to become eligible as so-called Targeted Employment Areas. The program “in effect lets wealthy foreigners buy a US visa by investing in luxury real estate projects,” said Aaron Renn, a senior fellow at the Manhattan Institute who also has been critical of the H-1B program, which ostensibly offers visas to workers with special technical skills.
Liberals have problems with EB-5 as well, because there are no requirements that the jobs created go to workers from the low-income communities supposedly helped by the investments. Still, the greatest number of EB-5 projects are in decidedly blue-state California and New York, according to the US Department of Commerce, and politically connected Democrats have benefitted, including Tony Rodham, Hillary Clinton’s brother, who raised millions in financing for an electric-car company and other ventures.
The bipartisan entanglements may explain why the program has never been reformed or eliminated, despite mounting abuses. Every year or so it is threatened with expiration, but Congress and presidents of both parties quietly reauthorize it unchanged. Indeed, just this week the program was extended until September, and the primary “reform” discussed was increasing the price of entry from $500,000 to $1.3 million.
Perhaps the best reason to dump the EB-5 visa program is that it undermines support for legitimate immigration. Unlike the millions of hard-working applicants waiting in line, the people who obtain EB-5 visas don’t need proof of education or work qualifications or special skills. All they need is cash.
Renée Loth's column appears regularly in the Globe.