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As part of his warmed-over jobs plan, President Obama is repackaging "Buy American" stimulus subsidies to help hard-hit homegrown businesses. At the same time, however, Congress is pushing to expand a fraud-riddled investor program that puts U.S. citizenship for sale to the highest foreign business bidders.
Call it the Buy America Cash-for-Visas plan.
As I first reported 10 years ago, the EB-5 immigrant investor program was created under an obscure section of the 1990 Immigration Act. The law allows 10,000 wealthy foreigners a year to purchase green cards by investing between $500,000 and $1 million in new commercial enterprises or troubled businesses. After two years, foreign investors, their spouses and their children all receive permanent resident status -- which allows them to contribute to U.S. political campaigns and provides a speedy gateway to citizenship. The program is set to expire in 2012.
On Thursday, the House Judiciary Committee's Immigration subpanel entertained calls to save the EB-5 law. Democratic Rep. Zoe Lofgren is sponsoring a bill to salvage the immigrant investor visas. The legislation (sponsored by open-borders Democrat John Kerry and Republican Richard Lugar in the Senate) also creates a second program with lower barriers to entry that would provide "start-up visas" for foreign entrepreneurs. They would be granted unconditional permanent-resident status if they create a government-determined number of jobs.
And there's the rub. Obama's make-believe math on stimulus jobs saved or created -- coupled with the snowballing $535 million, stimulus-funded Solyndra solar company bankruptcy scandal -- tells you all you need to know about Washington's credibility in picking economic winners and losers.
If the feds can't be trusted to invest government subsidies wisely in American companies, how can they possibly determine which overseas investors will be successful here? And if top U.S. loan officials have demonstrated such sloppy, politically driven disregard for financial due diligence on risky half-billion-dollar enterprises, how can immigration officials be trusted to better protect the national interest?
Answer: They can't. In fact, the benefits of the EB-5 economic development plan have gone to former Immigration and Naturalization Service officials who formed lucrative limited partnerships to cash in on their access, and to shady foreign fraudsters.
Whistleblowers told me how immigrant investors paid token fees to these partnerships. The partnerships secured promissory notes for the remainder of the foreign investments, which were forgiven after investors received their permanent green cards. Former INS employees, working for these partnerships, aggressively lobbied their old colleagues to accept such bogus financial arrangements. As a result, according to an internal U.S. Justice Department investigative report, "aliens were paying $125K" instead of the required $500,000 to $1 million minimum, and "almost all of the monies went to the General Partners and the companies who set up the limited partners."
In 2007, the Seattle Post-Intelligencer reported that the "program between 1995 and 1998 was frequently abused when would-be immigrants were allowed to pay a small amount in cash for a green card, signing a promissory note for the balance. The note didn't come due for several years -- long after the two-year conditional period built into the EB-5 visa had ended and permanent residency had been granted."
An earlier Baltimore Sun investigation found "only a tiny fraction of the money ever made it to the companies seeking assistance." Many of the distressed U.S. firms that the program intended to help have closed because they never received promised funding.
Instead of allowing the troubled program to sunset, Department of Homeland Security Secretary Janet Napolitano has "streamlined" the EB-5 immigrant investor green card process -- guaranteeing processing within 15 calendar days for foreign business "projects that are fully developed and ready to be implemented." The same expedited rush for government-directed investments gave us Solyndra. What's worse in this case is the sordid peddling of the privileges of citizenship.
Twenty years ago, when the program's failures were first exposed, Rep. John W. Bryant, a Texas Democrat, protested on the House floor: "This provision is an unbelievable departure from our tradition of cherishing our most precious birthright as Americans. Have we no self-respect as a nation? Are we so broke we have to sell our birthright?"
Apparently so.
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Michelle Malkin is the author of "Culture of Corruption: Obama and his Team of Tax Cheats, Crooks & Cronies" (Regnery 2010).
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September 16, 2011 @ 8:30 am
So, for a “Mess of potage” our government sells itself like a 90 year old hooker on the streets.
STOP this is madness. Begun by Clinton, continued by Obama’ where does this ride get off?
September 16, 2011 @ 8:32 am
This President is suppose to Preside over, not Dispense out the or sell out America’s hard earned wealth like so many (30) pieces of silver. He would turn our Judicial system into the JUDAS system and sell out America to the highest bidder in the form of JOBS creation to buy his next election. Let’s just hope he ends up like Judas and sells just enough rope to hang himself at the polls in 2012.
Whenever Obama says he is going to use our money to create jobs you can bet 6 months later more jobs have been slain than King David slew Philistines of which Obama acts like at every twist. Carter slew his thousands, Obama tens of thousands.
The one thing that differentiates between a Leader who chooses to look through a glass clearly and see what is good, VIS-A-vis one who chooses only to into the mirror and only sees himself, is just the 30 pieces of silver in the glass which sells out our American interest and reflect only his own self-interest.
September 16, 2011 @ 8:40 am
Another act in a long line of greedy ingnorance by our congress!
September 16, 2011 @ 10:40 am
Michelle Malkin is a national treasure; President Perry should give her a medal of honor in 2013.
September 16, 2011 @ 10:49 am
The only Money the Government asks for “UP FRONT” is the American Citizens’ tax dollars. American citizenship must be earned , NOT PURCHASED!
September 16, 2011 @ 11:12 am
With immigration officials and elected officials pocketing the money, it certainly sounds like a bribe to me. Welcome to our third world nation where a wink and a few dollars will result in speedy processing for lawbreakers.
September 16, 2011 @ 11:21 am
Putting aside the rampant corruption in the system, which clearly must be stopped, I don’t see why the program is considered so outrageous. Some of you say that citizenship should be earned not bought, but how do you suggest that it is earned? Most of the time it is given away for free.
Ask yourself this; would you rather give a Green Card to a foreigner who can invest large sums of money in this country, and who presumably is capable of looking after himself and has significant skills; or would you rather give a Green Card to some third-world illiterature who gets moved to the front of the line because his cousin lives here.
The chain immigration policy introduced in the sixties is killing this country. We should give immigration preference to those with skills who can contribute most to society. It is scandalous that American taxpayers pay tens of thousands to educate Indians and Chinese at our top universities only to send them home when they graduate.
September 16, 2011 @ 11:51 am
The real ‘scandal’ in what you speak is that we taxpayers should even pay a nickel to educate Indians, Chines, and others at US universities.
BTW, I have no problem with allowing Green cards to your third world illiterates, if it is done under a reasonable immigration system, one that recognizes that we can assimilate only a certain number each year. Immigration to the highest bidder should be a total anathema.
What I do find very troubling, as a retired Civil Servant, is the smear that the Civil Service is getting, where corruption is now becoming rampant. The US federal Civl Service had a stellar, global. reputation as uncorruptible, Apparently our leaders have been a rather poor role model.
September 16, 2011 @ 12:55 pm
I don’t disagree with your stance on the unconstitutional use of tax payer money, Mort, but that’s a separate discussion. I was trying to prompt debate about what the US immigration policy should be. What basis would you use for issuing a Green Card? I believe immigration policy should be based on what is best for the US, and current US citizens, and that is not what we have now.
September 16, 2011 @ 4:06 pm
A basis for immigration?
There must be compassion for true refugees, people who are in imminent personal danger. But that does not mean a haven for the residents of countries in the midst of civil wars.
Second, we need to establish a formulation of just how many immigrants that the USA can readily assimilate in a year. Subtract the true refugees from that number, the refugees should receive priority.
Set a date in the year. All those requesting immigration to apply by that date. Then randomly select the allowable number from the applicants.No, don’t split up families, but the family does not qualify as a single individual number, rather all members of the family count toward the annual quota. A pregnant woman should count as 2.
No literacy tests, anyone with the drive to become an immigrant for the purpose of becoming a citizen can be assumed to have the drive to learn English. Anyone with the motivation to become a citizen can be assumed to have the drive to become a productive citizen. We have more than enough programs in place to assist them.
There may be certain exceptional talents that may qualify for temporary work visas, but as ‘Wernher von Braun said: “Haven’t you read Robert Goddards papers?’. We tend to downgrade our home-grown experts, foreign is not necessarily better. I rather doubt if you can find many foreign ‘experts’ that are so superior to our home-grown talent, in any field.
September 16, 2011 @ 10:38 pm
Keep, ancient lands, your storied pomp!” cries she With silent lips. ” Give me your tired, your poor, Your huddled masses yearning to breathe ( I mean Eat ) free.
I think not!
Millions for defense, but not one dime for tribute!
September 16, 2011 @ 12:59 pm
I can hear the minister now saying a few final words as the last shovel (ready?) of dirt is thrown on the casket of the democratic party: if only they had used their underhanded and conniving imaginations to actually help someone besides themselves we wouldn’t all be standing here today laughing our a$$es off.
September 16, 2011 @ 2:29 pm
Every time I think our “representatives” can’t possibly get any more corrupt, they prove me wrong.
September 16, 2011 @ 3:51 pm
Everyone of them who does not uphold their oath of office and who does not put this Nation first, should be thrown out of office next year. Irregardless of party affliation!
September 16, 2011 @ 4:25 pm
we (citizens of the USA) are screwed. congress can stick into any bill trash like the EB-5. most congress people will not read any bill more then 1 page long. Thank you for commenting on this 10 years ago. 10 years ago the internet was still limited, if your column was in a newspaper and someone actually read it, that woulsd have been great. I have been following and anoyed with our politicians for years, this EB-5 just proves again thses peeps in dc are anti American, stuff their own pockets, become lobbyist after leaving govt. dirtbags (a mild word).
September 16, 2011 @ 4:49 pm
The previous article:
Obama’s Latest Fiasco: Politics Trumping Security contained the following line: On the day that LightSquared CEO Sanjiv Ahuja made a $30,400 contribution to the Democratic Party, two of his deputies appealed to the White House for meetings with top technology advisers to Obama, according to emails obtained by iWatch News.
Could it be that Sanjiv Ahuja too bought his visa? There is lots of corruption in those countries where those ‘RICH’ investors come from. They know just how to gain favors.
September 17, 2011 @ 7:43 pm
our CEO’s are just as good at it but a little more under the table about it.
September 17, 2011 @ 7:46 pm
i probably wrong but i see very little about it except make conditions that taxes stay in america, if have to hire , hire only american citizens, this could be great for brining in extra money into the country but have conditions.