[Congressional Record Volume 165, Number 119 (Tuesday, July 16, 2019)]
[Senate]
[Pages S4838-S4839]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                            EB-5 Regulations

  Mr. GRASSLEY. Mr. President, I come to talk to my colleagues today 
about the deeply flawed EB-5 green card program.
  Several weeks ago, we learned that the Office of Management and 
Budget at the White House had completed its review of the new rules to 
update and reform the EB-5 Program. I have been an advocate for 
reforming this program for a long, long period of time. Several times I 
have even talked to the White

[[Page S4839]]

House about moving these regulations along.
  Now that they have been reviewed by OMB, for the rule to come into 
effect, it must now be published in the Federal Register. The rule was 
first proposed in January 2017. We have been waiting for it to be 
finished for 2\1/2\ years. I hope that President Trump now makes that 
happen as soon as possible.
  The proposed rule would raise the minimum investment amounts required 
under the program. It also makes sure that investments are directed to 
rural areas and truly high-unemployment areas, as Congress intended 
when EB-5 was created in 1990.
  Considering those points of where EB-5 ought to be concentrated and 
now looking at how they have been diverted from the original intent of 
Congress is the very best reason for these rules to be put in place--to 
get us back to square one, the original intent of the law.
  Since the 1990s, rampant and abusive gerrymandering of the EB-5 
Program's targeted employment areas has undermined that congressional 
intent, which was to direct it toward high-unemployment areas and rural 
areas. Instead of channeling investment to rural and high-unemployment 
areas, EB-5 has become a source of cheap foreign capital for big-city, 
big-moneyed interests. The targeted employment area reforms in the 
proposed rule would take a first step toward refocusing EB-5 investment 
in the way that Congress originally intended in that 1990s legislation.
  In addition to channeling investment away from the areas of our 
country that need it the most, this is what has happened. The EB-5 
Program has been plagued with other forms of fraud and abuse, and this 
has been going on for years and years. There are examples of EB-5 fraud 
from all over the country, and I am going to give just a few examples 
as a reminder to the President why these rules need to be put into the 
Federal Registry right away.
  In Chicago, a businessman defrauded 290 investors of $150 million in 
funds that were supposed to be used for construction of a hotel and 
conference center near O'Hare Airport.
  In Palm Beach, FL, a real estate developer and real estate attorney 
teamed up to defraud 60 Chinese and Iranian EB-5 investors of $50 
million. Instead of that money being used to fund the construction of a 
proposed hotel, it was instead used to pay personal taxes and purchase 
a 151-foot yacht.
  In Wisconsin, a businessman used over half of the $7.6 million in 
funds he had solicited from investors to pay for personal expenses, 
including Green Bay Packers tickets and the purchase of a Cadillac 
Escalade.
  I could go on all day.
  In May of 2017, U.S. Citizenship and Immigration Services conducted 
an internal fraud assessment and found 19 cases of national security 
concerns within the EB-5 Program. Those are national security concerns. 
The No. 1 responsibility of the Federal Government is to protect the 
American people, and that involves national security. These cases 
related to terrorism, espionage, and information and technology 
transfer.
  Unfortunately, multiple bipartisan efforts in the Congress to modify 
the EB-5 Program have been consistently stymied by powerful special 
interest groups and big-moneyed interests. Because I have been in the 
middle of those battles--and they are bipartisan battles--over the 
years, I know exactly where these big-moneyed interests are coming from 
and the special interest groups that keep this program from being 
reformed.
  Now we have an opportunity for one person--the President of the 
United States--through regulation, to reform this program in a way that 
would be very helpful. So that makes the publication of the EB-5 reform 
rules even more important. I applaud President Trump and the 
administration for getting the proposed rule to this point, but now it 
is time for the President and his team to finish the process and make 
sure the final rule goes into effect as soon as possible.
  Iowans and all Americans who live in rural and high-unemployment 
areas deserve to have the investment that Congress intended when the 
EB-5 Program was created almost 30 years ago. President Trump and his 
administration now have a chance to finally address some of the very 
serious flaws in this program that have hurt rural America. We have 
been waiting for these reforms for over 2 years. It is time for this 
final rule to be published, and it needs to happen right now, if not 
sooner.