Although the EB-5 Immigrant Investor Program was first created in 1990, backlogs first developed in May 2015. These backlogs have led to consistent calls for reform. Now, without significant reform to the EB-5 program, many industry leaders fear that the EB-5 Regional Center Program may not be renewed by its latest sunset date of June 30, 2021.
Reform to the EB5 investment program is needed to strengthen the program’s integrity. Specifically, protections for investors and project developers must be increased, while better procedures must be put in place to detect and deal with malicious and fraudulent actors promptly. The EB-5 investment program has suffered from notoriously bad press from the media, and better integrity measures could go a long way toward revamping the program’s reputation.
EB-5 industry representatives have also argued for the regional center program’s long-term authorization. Long-term authorization would ensure that the EB-5 investment program can continue to create tens of thousands of jobs for U.S. workers and stimulate the U.S. economy with billions in foreign capital for many years to come. However, Representative Guy Reschenthaler, a Republican from Pennsylvania, has raised possible national security concerns that the EB-5 investment program could pose.
How Could China Exploit the EB-5 Investment Program’s National Security Vulnerabilities?
Since the EB-5 investment was created in 1990, huge demand for the program has been driven from Chinese investors. It was only in the late 2010s that more countries began to be represented in the EB-5 investor pool.
From 2015 to 2018, approximately 80% of all EB-5 visas were issued to Chinese nationals. After all, China has the largest population in the world. It is also understandable that many Chinese nationals would want to escape China’s totalitarian government. However, a letter by Reschenthaler and representative Jim Jordan of Ohio from June 15, 2020, alleges that the EB5 investment program is being abused by the Chinese Communist Party (CCP). The representatives suggest that the CCP may make EB-5 investments to provide its members with U.S. permanent residency. Reschenthaler and Jordan’s letter also formally requested an investigation into the CCP’s alleged abuse of the EB-5 investment program by the U.S. Government Accountability Office (GAO).
The fear is that CCP members could travel within the United States without restrictions once they receive U.S. permanent residency status. The CCP could then infiltrate U.S. society, giving them the ability to steal state secrets and undermine U.S. democracy. Unfortunately, as of April 2021, the EB5 investment program has woefully inadequate integrity measures that make it vulnerable to these types of threats. This lack of integrity poses a significant risk to the United States.
How Could Reform to the EB-5 Investment Program Improve U.S. National Security?
Reform to the EB-5 investment program could allow the program to better detect exploitation by sinister actors, including the CCP. While United States Citizenship and Immigration Services (USCIS) considers the national security concerns of an EB-5 investor, they cannot deny a petition on national security grounds. This vulnerability leaves open the possibility of abuse and must be addressed by EB-5 reform.
USCIS also requires more funding to better protect the United States’ national security interests. Along with many other individuals and organizations, 2020 hit USCIS hard. The immigration body even went so far as to announce that it planned to furlough more than 70% of its workforce or approximately 13,000 employees. Ultimately, these jobs were saved by emergency funding, which kept USCIS afloat.
USCIS’s financial position remains unstable, with the agency finding it challenging to procure the funds it needs to support itself. This situation is potentially hazardous, as USCIS is vital to U.S. national security. Funding for the agency, along with EB-5 program reform, is essential. An added benefit to increased funding for USCIS is that the agency may expedite processing of EB-5 investment participants’ I-526 petitions, which reached historic lows in 2020.
Senators Patrick Leahy and Chuck Grassley have already proposed legislation that would reform the EB-5 investment program. Their bill would dramatically push the EB-5 investment program as we know it into a positive direction. Among other things, the bill would improve the program’s integrity measures, provide sturdier protections for EB-5 investors and developers, and reauthorize the regional center program. The bill would go a long way toward fixing the program’s national security concerns and is exactly what the EB-5 investment program needs.