Senator Chuck Grassley.

Senator Chuck Grassley.

Iowa Senator Chuck Grassley says a federal program that’s designed to encourage entrepreneurs from outside the U.S. to build businesses here and create jobs is under scrutiny.

The program, called E-B-5, was supposed to attract the attention of qualified foreign investors, but Grassley says it’s failing in a big way.

Grassley says, “Over the course of this investigation, I’ve learned that the program is full of fraud and abuse.”

The employment-based program was created by Congress and expanded to Regional Centers as a way to pool capital from multiple foreign investors for economic development projects within certain areas of the country. Grassley says a top-to-bottom review of the program is needed.

“It has significant national security problems and allegations suggest the EB-5 program may be facilitating terrorist travel, even economic espionage, money laundering and investment fraud,” Grassley says.

The Republican who chairs the Senate Judiciary Committee, says his panel will hold a hearing next week on the program, which was created by Congress in 1990.

Grassley says, “The program has strayed further and further away from the original intent of Congress which was to help rural areas and to help high unemployment areas create jobs.” Grassley helped write legislation that would bring sweeping reforms to the EB-5 program.

“Our bill would strengthen oversight, insure greater accountability and transparency,” Grassley says. “It would surely discourage fraud and it would provide a high priority for national security.” Grassley says the legislation had bipartisan support in both the House and Senate, but it was bypassed in recent votes.