Immigration debates have played a pivotal role in the first year of the Trump administration, particularly the intersection of immigration and national security. Travel Ban I was issued eight days into Trump’s presidency, barring citizens of six countries with links to terrorism and/or insufficient host-nation vetting from traveling to the United States. Litigation ensued, followed by Travel Ban II, more litigation, and finally Travel Ban III. And that’s just one policy. We have also witnessed fights over DACA, chain immigration, the visa lottery, and refugee numbers.
One immigration policy with significant national security implications, however, has received almost no attention whatsoever. The EB-5 visa program allows wealthy citizens of foreign countries (China, Russia, and Gulf countries) to obtain permanent residency and eventual citizenship in the United States in exchange for investing $500,000 or $1 million in American commercial ventures. Congress created the program in 1990 in a bid to facilitate economic growth in rural or struggling municipalities but, like most Congressional programs, it did not work as intended.
EB-5 has become a pay-for-play route to American citizenship for people who live in (often hostile) foreign countries, and because of loopholes in the program, the investments rarely make their way to the disadvantaged communities the program was intended to support.
After the financial crisis limited credit available to developers, the Obama Administration turned to foreign investment through the EB-5 program as a solution, and EB-5 visas increased by 700 percent as a result. Ninety percent of projects now occur in major cities, and eighty percent of the visas go to Chinese citizens. To use recent events as an example, EB-5 money was the subject of discussion when Jared Kushner’s sister was roundly and rightly criticized for pitching Chinese investors to “invest $500,000 and immigrate to the United States.”
Which brings us to the national security problem. The program is not very selective when it comes to prospective investors. Generally speaking, if you have the cash, you get in. In December 2014, Sen. Chuck Grassley (R-Iowa) disclosed that he had received reports from government whistleblowers that EB-5 was being exploited by nefarious actors. A subsequent GAO report found that “fraud mitigation in the EB-5 Program is hindered by a reliance on voluminous paper files, which limit the agency’s ability to collect and analyze program information.”
“Identifying fraud indicators is extremely challenging,” the report concluded.
Given our inability to properly vet EB-5 applicants, what keeps China or Russia from sending intelligence operatives to the US as “investors” who can become American citizens after they have held permanent residency for five years? Once these individuals have citizenship, they can apply for jobs that require security clearances. Furthermore, what keeps Gulf states that spend billions of dollars financing terrorism each year from spending $1 million of that money to place people who hate America inside our borders?
Despite bipartisan recognition that the program is problematic — Sen. Dianne Feinstein (D-Calif.) called the program “inherently flawed” because “[i]t says that US citizenship is for sale” — and a bipartisan bill that pushed last year to end the program, EB-5 remains in effect for the same reason many other inefficient or downright counterproductive government programs survive year after year: money.
Sens. Chuck Schumer (D-NY) and John Cornyn (R-TX), both of whom represent states that have received massive influxes of foreign money through EB-5, fought to protect the bill. During the debate, Sens. Jeff Flake (R-AZ) and Rand Paul (R-KY), true to form, introduced bills to “reform” EB-5 by slightly tweaking the statutory definition for areas eligible for EB-5 investment. In the end, Congress reauthorized the program. What can be more important than keeping local voters happy?
Our elected representatives have a rich tradition of placing home-district interests above national security concerns, as I have detailed here and here, but the forthcoming immigration talks present a fresh opportunity for Congressional leaders to finally do the right thing. As the White House and Republican congressional leaders attempt to hash out a DACA-inspired immigration bill, EB-5 should be on the list of programs targeted for elimination.
Indeed, if the White House is serious about its commitment to prioritizing national security in its immigration policies, it must eliminate the EB-5 program. Wealthy donors may not appreciate such a move, but it would undoubtedly be in our national interest — and isn’t that what draining the swamp is all about?