Only 19 percent of Americans trust the federal government to do what’s right most of the time, according to the Pew Research Center. And it’s hard to blame them, given that our Congress has just extended a 25-year-old visas-for-investment immigration scheme that has accomplished essentially nothing except to foster corruption, risk national security — and subsidize real estate developers.
The EB-5 program reserves up to 10,000 permanent residency slots each year for foreign nationals who invest in the United States. Congress enacted it in 1990 on the superficially plausible theory that trading green cards for capital would boost the economy, as a similar plan in Canada had reportedly done.
Before 2008, however, EB-5 produced more than 1,000 investor immigrants per year only once, due to competition from Canada, bureaucratic hassles and a lack of business opportunities fitting the program’s minimum requirements — $1 million invested and 10 jobs created. When admissions did go above 1,000, in 1997, the program was temporarily suspended amid concerns that fraud caused the spike.
Subsequent Congresses, and administrations of both parties, responded — by relaxing standards. Now visa seekers may invest passively in existing U.S. firms rather than start their own. They get credit for “indirect” job creation. They may put up as little as $500,000 if they do so in needy “targeted employment areas” — gerrymandered to include hot urban real estate markets. The government empowered an army of politically connected promoters, known as “regional centers,” to guide investors through the U.S. market for a fee.