Before being ruled out of order for asking questions Republicans don't want asked, Rep. Susan Wismer (D-1/Britton) told the Government Operations and Audit Committee that she had just read an article raising grave concerns about the EB-5 visa investment program.
She couldn't remember the title (she does have a lot on her mind—Republican stonewalling and corruption, her own campaign for Governor), but I think she was referring to this Fortune article from last week:
From the law’s inception in 1990, selling potential citizenship to the rich struck many as a corruption of American ideals. “Have we no self-respect as a nation?” asked Texas congressman John Bryant on the House floor that year. “Are we so broke we have to sell our birthright?”
But that powerful objection was overcome with an even more potent counterforce: The program would generate jobs where they’re needed most. Immigrants seeking EB-5 visas must invest their half-a-million dollars in a new business that creates 10 full-time U.S. jobs in a high-unemployment or rural district [Peter Elkind, "The Dark, Disturbing World of the Visa-for-Sale Program," Fortune, 2014.07.24].
The article notes that EB-5 enjoys bipartisan support, a fact alluded to by GOED boss Pat Costello in his testimony before GOAC today. Tycoons Warren Buffett, Bill Gates, and Sheldon Adelson support a reformed and expanded version of EB-5 and are worried that Congressional gridlock will result in the expiration of EB-5 on October 1 (what? Wait a minute—suddenly, I like gridlock).
But the Fortune article sees fraud and abuse in EB-5, just as we've seen (but which GOAC and the South Dakota Republican Party refuse to see) in South Dakota:
But because the EB-5 industry is virtually unregulated, it has become a magnet for amateurs, pipe-dreamers, and charlatans, who see it as an easy way to score funding for ventures that banks would never touch. They’ve been encouraged and enabled by an array of dodgy middlemen, eager to cash in on the gold rush. Meanwhile, perhaps because wealthy foreigners are the main potential victims, U.S. authorities have seemed inattentive to abuses [Elkind, 2014.07.24].
Lack of regulation, dodgy middlemen... sound familiar?
Rep. Wismer tried to get a straight answer from GOED chief Costello on how much economic impact the EB-5 program has had in South Dakota. Costello said South Dakota doesn't have such data.
Rep. Wismer should have read Costello and the committee this part of the Fortune article, which says Uncle Sam can't show any reliable economic impact from EB-5, either:
Others who have examined the program view it very differently. They question whether it generates many jobs—especially in needy areas. A December 2013 study by the Department of Homeland Security’s inspector general [also reported in the Madville Times, 2013.12.13] found that the government “cannot demonstrate that the program is improving the U.S. economy and creating jobs for U.S. citizens.” A February 2014 paper by the Brookings-Rockefeller Project on State and Metropolitan Innovation concluded that “knowledge of the program’s true economic impact is elusive at best.”
There are two reasons for that. First, the government is exceedingly generous in its employment tally. It gives EB-5 investors credit for all the jobs theoretically spawned by a project even when EB-5 money represents only a sliver of its financing. Second, for many mainstream ventures, EB-5 money isn’t really creating jobs—it’s merely saving developers money for projects that would be financed anyway. (Indeed, those big companies are actually “hijacking” money from worthy smaller investments in hard-hit areas, argues Michael Gibson, a financial adviser who vets EB-5 investments.) [Elkind, 2014.07.14].
In other words, EB-5 is a poorly regulated, easily abused program with no reliably demonstrable economic benefits. But given the bullying and stonewalling the Republicans on the Government Operations and Audit Committee displayed today, you won't hear about that.
Why bother having legislative hearings on EB-5? Rep. Wismer, just read us that Fortune article... and start handing out copies on the campaign trail.
Sounds like exactly the kind of arrangement Exxon, Walmart, Citi, Morgan Stanley and other hyper-benevolent corporate lords love best. They only care about helping us peons "live better," doncha know.
If there is a hint of poetic justice in this whole rottenness, it would be that Bollen struggles with the occupancy rate of his 300 some rental units he owns and probably figured would filled by EB-5 workers.
I've always wondered how he came to amass so many units and what they are worth.
This is probably just one strand in a tangled web of money trails that is EB-5.
With the exception of wismer, every member of that committee has lost all respect.
Wouldn't have a problem if that damn Bill Clinton hadn't exceeded his authority as Potus and went back in time 3 years to sign EB-5 bill while Hitler Weasel Bush was in the White House.