Since I last wrote about the impending expiration date of the EB5 regional investors program, there have been some interesting developments in the U.S. Senate over the questions presented. I will review these developments in this blog post.
JOINT LETTER OPPOSING STRAIGHT REAUTHORIZATION OF THE EB5 REGIONAL CENTER PROGRAM
On November 6, 2015, Republican Senators Chuck Grassley (Iowa), Bob Corker (Tennessee), and Ron Johnson (Wisconsin) wrote a joint letter to the Senate Majority Leader Mitch McConnell (R-Kentucky) and Senate Minority Leader Harry Reid (D-Nevada) expressing their opposition to a straight reauthorization of the EB5 Regional Center program before it is set to expire on December 11, 2015.[1] The letter cites that the Government Accountability Office found “serious concerns” with the program, including exorbitant fees, exploitation of investors, and securities violations. Importantly, the letter does not state opposition to the reauthorization of the program in any form, but rather the imposition of stronger safeguards to prevent fraud and abuse.
SENATOR GRASSELY ON THE EB5 PROGRAM
Senator Grassley has taken perhaps the greatest interest in the EB5 program in the U.S. Senate. As I discussed in my first post about EB5 regional center program reauthorization debate, Senator Grassley, along with Senator Patrick Leahy (D-Vermont) have proposed a bill that would increase the minimum investment about for the EB5 program in addition to implementing increased safeguards (read the bill here).[2] On October 7, 2015, Senator Grassley gave remarks from the Senate floor discussing alleged fraud in the EB5 program.[3] Despite Senator Grassley's concerns, however, it should be welcome news to everyone who hopes to see the program reauthorized that Senator Grassley is advocating to reform the program rather than to abolish it.
OTHER PROPOSALS
In my previous blog post, I discussed the various proposals regarding the EB5 program. For example, I noted that Senator Rand Paul (R-Kentucky), who is also a candidate for President, has a proposal to expand the EB5 program (read his bill here).[4]
On November 4, 2015, Senator Dianne Feinstein (D-California) wrote an op-ed where she argued that the EB5 regional center program should be allowed to expire.[5] Senator Feinstein cited as reasons for her opposition that “the EB-5 regional center program sends a message that American citizenship is for sale, and the program is characterized by frequent fraud and abuse.”
MY THOUGHTS
Although the EB5 program has come under scrutiny from both Republican and Democratic legislators, I believe that the final resolution will be along the lines of the middle path suggested by Senators Grassley and Leahy, which by virtue of their endorsements already has a degree if bipartisan support in the Senate at the very least. There does not seem to be significant momentum in favor of expanding the program (as Senator Paul, among others, have suggested) nor does there seem to be for letting it expire, as Senator Feinstein argued for in her op-ed.
However, Congress is also grappling with setting new spending levels at the same time as the EB5 program is set to expire. This once again brings the possibility that the President and the Congress may not be able to come to an agreement in time, setting the stage for a possible “government shutdown.”
Regardless of the broader spending debate, however, those of us who are interested in the EB5 program can only hope, for the sake of certainty and implementing expeditiously whatever changes are made, that the Congress and the President resolve the issue by the deadline.
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- Published on AILA InfoNet at Doc. No. 15111261 (Nov. 12, 2015)
- S-1501 — American Job Creation and Investment Protection Reform Act of 2015
- C-Span, http://www.c-span.org/video/?c4554414/sen-grassley-eb-5-comments, (October 7, 2015) [From the Congressional Record]
- S-2122 — Invest in Our Communities Act
- Feinstein, Dianne, “U.S. Citizenship Should Not Be for Sale,” (November 4, 2015), available at http://blogs.rollcall.com/beltway-insiders/u-s-citizenship-not-sale-commentary/
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