“Mend Not End”: Senate Holds First EB-5 Hearing of 2016
February 2, 2016, the Senate Judiciary Committee held a hearing entitled, “The Failures and Future of the EB-5 Regional Center Program: Can it be Fixed?”
The views expressed were interesting in that it provided a discerning insight into the what is going on behind the scenes at both USCIS and at the SEC as well as in Congress relative to the EB-5 program. Testimony was given from Nicholas Colucci Chief, Immigrant Investor Program and Stephen Cohen, Associate Director, Division of Enforcement, U.S. Securities and Exchange Commission.
Chief Collucci testified that an estimated $8.7 billion has been invested into the US through the EB-5 program since October 2012. Further, since October 1, 2012, an aggregate total of an estimated 35,140 jobs have been created for US workers through foreign investment. These are not numbers to be lightly dismissed and the upshot is that the interested Senators advocated to “mend not end” the Program, installing reforms as opposed to ending the program (with the exception of Senator Feinstein (D)).
Chief Colluci described a whole series of reforms that USCIS would like to see implemented. Some of the suggested reforms if given without the appropriate balances could arguably give USCIS more authority then their position would warrant. The lawfulness of an investor’s source of funds has been in the forefront of attention ever since the GAO Report last year. Mr. Cohen clarified the respective roles of the SEC, and the USCIS in their review. Interestingly, Mr. Cohen stated that fraud occurs in all securities markets and that EB-5 is not unique in that regard.
A discussion relating to TEA’s was inevitable. In response to Senators Grassley and Leahy’s concern against urban TEAs, Senator Schumer noted that projects in affluent areas draw workers from much poorer areas; hotels in midtown Manhattan have workers commuting from the Bronx, the poorest congressional district. Senator Leahy stated that the EB-5 program should have special incentives for the rural and poor urban areas.
The link to the hearing details with video and downloadable statements by Senator Chuck Grassley, Senator Patrick Leahy, and Messrs. Colucci and Cohen are at:
The Failures and Future of the EB-5 Regional Center Program:
Can it be Fixed?
Full Judiciary Committee
Date: Tuesday, February 2, 2016
Time: 10:00 AM
Location: Dirksen Senate Office Building 226
Presiding: Chairman Grassley