[Congressional Record Volume 161, Number 20 (Thursday, February 5, 2015)]
[Senate]
[Pages S811-S812]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       IMMIGRANT INVESTOR PROGRAM

  Mr. GRASSLEY. Madam President, 2 days ago ABC ran a story on its 
``Nightline'' program that brought to light issues with the immigrant 
investor program. This program is also known as EB-5. This immigration 
program was created by Congress in 1990. It was created to stimulate 
the U.S. economy through job creation and capital investment by foreign 
investors. In 1992 Congress further added the regional center component 
that allows participants to pool dollars for foreign investors.
  The story on ``Nightline'' detailed how visas and green cards are for 
sale for more than $500,000. It also highlighted how spies and 
terrorists can use the program to enter the country, risking our 
national security and undermining the real intent of the program.
  For the past few years, whistleblowers have come to me about the 
fraud, abuse, and national security problems with that program.
  A December 2013 audit of the EB-5 program conducted by the Department 
of Homeland Security Office of Inspector General substantiated several 
of these concerns. The OIG report concluded that the U.S. Citizenship 
and Immigration Services is unable to demonstrate the benefits of 
foreign investment into the U.S. economy--in other words, questioning 
whether the original intent of the program was being accomplished.
  Specifically, the Office of the Inspector General found that the U.S. 
Citizenship and Immigration Services could not validate whether the EB-
5 program actually created 49,000 jobs.
  In addition, a 2013 internal memorandum from the U.S. Immigration and 
Customs Enforcement, Homeland Security Investigations noted that ``the 
nature of indirect job growth is problematic.''
  Allow me, please, to discuss the fraud issues related to the program.
  The EB-5 program requires a foreign national to invest $1 million in 
order to obtain a visa. However, there is a lower threshold for 
projects that are in high unemployment or rural areas.
  Investors have exploited this loophole. As noted in press reports, 
some metropolitan areas are drawing their own maps or gerrymandering in 
order to meet this low threshold. The U.S. Citizenship and Immigration 
Services ignores the problem and doesn't question it.
  Additionally, there are serious concerns that the U.S. Citizenship 
and Immigration Services does not adequately verify the documentation 
and the source of funds from investors.
  Adjudicators do not thoroughly check how an investor has received 
$500,000 and whether the funds are even legitimate.
  Finally, I wish to elaborate what is probably more important, the 
national security concerns. Remember, the Federal Government's No. 1 
responsibility is the national security of this country.
  In regard to those national security concerns, in 2012, several 
agencies came together to draft a forensic assessment of financial 
flows relating to the EB-5 Regional Center Program, and the Department 
of Homeland Security Office of Intelligence and Analysis produced an 
intelligence report of the program's vulnerabilities. The same ICE 
memorandum that highlighted its issues with regional centers also 
identified seven main areas of vulnerability within the EB-5 program. I 
won't go into all seven of them, but I wish to use four as an example.
  No. 1, export-sensitive technology and economic espionage;
  No. 2, use by foreign government agents and espionage;
  No. 3, use by terrorists; and,
  No. 4, illicit financing and money laundering.
  Let me make it very clear that this ICE memorandum identified seven 
areas of vulnerability and I just gave us four dealing with sensitive 
technology and economic espionage, use by foreign government agents and 
espionage, use by terrorists, and illicit financing and money 
laundering.
  I know I repeated that, but the EB-5 program is being undercut by 
people who don't mind hurting the national security of our country.
  So to be repetitive on an important point, there are numerous 
national security concerns. That is why, in my September 2014 ``Dear 
Colleague'' letter, I invited my colleagues--all of them--to review 
classified information on this program.
  Today I renew this invitation and urge Senators and those staff who 
have clearances to view these documents to do so in the Office of 
Senate Security.
  I will be sending another copy of that ``Dear Colleague'' letter, 
which contains the document numbers to access the material at the 
Office of Senate Security.
  Summing up, we have whistleblower allegations supported by 
documentation. We have findings by the Office of the Inspector General. 
We have classified information about attempts to exploit the 
vulnerabilities of the program and, finally, we have numerous press 
reports that highlight the fraud and the abuse.
  So I think it is time Congress asks whether this program is worth the 
national security risks posed and whether this program can be fixed to 
accomplish the goals that were set out in 1990.
  The EB-5 program will require reauthorization by the end of fiscal 
year 2015 and I want my colleagues to know that I will be demanding 
reform before this is done, or in conjunction with any renewal.
  I do believe that if changes are made, the EB-5 program could benefit 
the U.S. economy as originally intended by Congress in 1990.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mrs. FEINSTEIN. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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