Iowa Senator Chuck Grassley is introducing legislation he says is designed to reform an economic development program which he describes as “out of control” with fraud and national security threats.
The program, called EB-5, was created in 1990 to prompt foreign investors into putting between 500-thousand and a million dollars into capital investment projects in rural America and in other job-starved areas.
Grassley says, “Many of the investments are going to projects in ritzy, well-to-do neighborhoods like those in Manhattan and Miami, instead of rural America and communities that need to boost employment and need help the most.” The program offers “green cards” to the foreign investors but over the decades, Grassley says significant problems have developed with the well-intended effort.
“The government has little ability to detect or prevent fraud,” Grassley says. “We don’t always know where the money for these projects is coming from and the government isn’t doing a good job of vetting the immigrant investors.” Grassley chairs the Senate Judiciary Committee and says the EB-5 program will expire at the end of this month and Congress has to decide whether to pass legislation to continue it or let it vanish.
Grassley says, “I introduced a bill with Senator Patrick Leahy, the top Democrat on the committee I chair, to put rural America and economically-distressed neighborhoods back on an equal footing with wealthy, urban neighborhoods when competing for investors.”
The legislation would also improve oversight and accountability, according to Grassley, while reducing scams and addressing national security concerns.