In more EB-5 irony, some of the folks most passionate about investigating the EB-5 visa investment program that Republicans like Mike Rounds so eagerly promoted in South Dakota are Republicans from outside South Dakota. Testifying Wednesday in support of his bill to terminate South Dakota's involvement with EB-5 investment, Rep. Stace Nelson (R-19/Fulton) invoked the work of Republican Senator Chuck Grassley from Iowa, who has raised national security alarms about Communist China's interest in our EB-5 program. Grassley has also pitched a fit about apparent Obama Administration cronyism funneling EB-5 money to favored politicos.

Now Republican Senator Tom Coburn from Oklahoma is seeking more information about EB-5 regional centers. Not falling for the silly arguments we've heard from South Dakota state government that our EB-5 program involved a private contractor and thus can't be investigated, Senator Coburn has sent letters to these federally authorized entities and asked for...

  • Any approval from USCIS to participate in the EB-5 program regarding the regional center and its business plan, including any subsequent recertification;
  • The total annual amount of investment and the number of individuals by country of origin making investments through the regional center since it has been in operation;
  • The name, address, and a description of each business in which the regional center has made an investment of funds and the number of jobs created by each investment;
  • Any fees charged to EB-5 applicants or received by the regional center, including amount and description;
  • A list of any current or former corporate officers of the regional center, including title, position, and dates of employment; and
  • The name and address of any individual or entity — either foreign or domestic — that the regional center has an agreement with to provide legal, accounting, recruiting or consulting services, as well as a description of the service provided.

[David North, summarizing Senator Tom Coburn, letter to EB-5 regional centers, 2014.02.14]

Nationwide, the lawyers who make money coordinating EB-5 programs are decrying Senator Coburn's request for public accountability and urging their regional center clients to clam up. I am eager to hear whether Senator Coburn gets a response from South Dakota's terminated EB-5 exec Joop Bollen or from the reticent caretakers of the idled program in our Governor's Office of Economic Development.

I am also eager to see if South Dakota Republicans, who have blocked efforts for more serious investigation and outright stoppage of our state's EB-5 activities, will develop anything like Grassley's and Coburn's interest in EB-5.

Related: Canada is terminating its Immigrant Investor Program, the program that inspired the U.S. to create EB-5. Canada found that the mostly Chinese immigrants who took advantage of their program paid less in taxes than other immigrants, generated less investment income, and drove up housing prices.

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Republican state representatives Elizabeth May (R-27/Kyle) and Stace Nelson (R-19/Fulton) have bravely signed Rep. Kathy Tyler's (D-4/Big Stone City) petition calling for a special session to authorize a forensic audit of South Dakota's troubled EB-5 visa investment program.

Rumblings suggest that the Republican leadership is pressuring its members not to sign the petition and contending that the federal EB-5 investigation is all political machinations by U.S. Attorney and known Democrat Brendan Johnson. The latter is hogwash, given that great impetus for an investigation of the EB-5 program is coming from Republicans.

Recall that the federal investigation (read: the only serious investigation) of South Dakota's EB-5 program got rolling in part thanks to concerns raised at the national level by Republican Senator Charles Grassley of Iowa. Senator Grassley has been raising questions about the United States Customs and Immigration Service's supervision of EB-5 under Alejandro Mayorkas, who Grassley charges has fast-tracked Chinese EB-5 applicants as favors for well-placed Democrats Terry McAuliffe (now Virginia's Governor-elect) and Anthony Rodham (Hillary Clinton's brother). Mayorkas is President Barack Obama's nominee for Deputy Secretary of Homeland Security. While the DHS inspector general is still investigating Mayorkas's conduct in USCIS, Senate Democrats have decided to push ahead with his nomination.

In 2008, the percentage of EB-5 investors coming from China was 25%. Under the Obama Administration, that percentage has jumped to around 80%. Immigration rules ban members of the Chinese Communist Party from receiving U.S. visas, but enforcing that ban requires diligent oversight. Senator Grassley is concerned that such oversight is taking a backseat to political favors.

Conservative Republican Senator Tom Coburn shares Senator Grassley's concerns. He offers this damning assessment of the EB-5 program:

I have serious concerns about national security and criminal threats associated with the EB-5 program.... The program is vulnerable to fraud, and we are not doing nearly enough to ensure that program participants are not a security threat. The administration needs to have a candid conversation with Congress and the American people regarding the program’s problems [Senator Tom Coburn, quoted in Jeffrey Anderson and Shaun Waterman, "Homeland Security's Fast-Tracked Checks of Foreign Investors May Put U.S. at Risk," Washington Times, 2013.10.27].

Since its inception in the 1990s, the EB-5 program has been a disappointment and an embarrassment. Key national Republicans are raising alarms that Democrats are using EB-5 to do political favors, at the expense of national security. If that's true, then a politically motivated Brendan Johnson would be the last person who would be giving the EB-5 program more scrutiny... and anti-Obama, anti-immigration, anti-Communist South Dakota Republicans ought to be the first.

The only people who don't want to look into South Dakota's EB-5 program are the people who are afraid they may find their friends implicated in green-card-buying schemes that have offsprung corruption, local economic damage, and possibly national security risks. But if those harms are happening, we must find out and stop them. Republicans should be as committed to that goal as Democrats.

Republicans, join your colleagues Rep. May and Rep. Nelson. Sign Rep. Tyler's petition. You may be doing the Chinese Communist Party and President Obama a favor if you don't.

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Senator Tom Coburn of Oklahoma wants to eliminate the ethanol blenders credit. That's the 45 cents per gallon we give refiners to mix ethanol in their gasoline. Coburn also wants to end the 54-cent tariff on imported ethanol, which we use to keep Brazil's cane-sugar ethanol from competing with our corn whiskey.

Coburn has sixteen Republican signatures on his cloture motion, which will force a vote today on his ethanol amendment. He says he has the 60 votes necessary to pass it.

That threat is enough to forge bipartisan spirit among corn state senators. Our own Republican John Thune and his Democratic neighbor from Minnesota Amy Klobuchar are offering their own proposal, the Ethanol Reform and Deficit Reduction Act. Senator Tim Johnson has his name on the bill, too, as does Minnesota's Al Franken (see, Republican friends? Al's a swell guy!). The plan:

  • The blenders credit kicks in only when oil drops below $90 a barrel. At that point, we give blenders 6 cents per gallon of ethanol.
  • The credit increases if oil goes down more, to a maximum of 30 cents per gallon if oil drops below $50 a barrel.
  • We save $2.5 billion (compared to Coburn's savings of $6 billion).
  • $1 billion goes toward deficit reduction.
  • $1.5 billion goes toward blender pumps and other support for ethanol.
  • Keep the $1.01-per-gallon subsidy for cellulosic ethanol.

The ethanol industry backs the Thune-Klobuchar plan. The American Coalition for Ethanol, Poet's lobby group Growth Energy, the National Corn Growers Association, and the National Farmers Union (among others) all back Thune-Klobuchar over Coburn. Evidently the industry is worried enough about Coburn's momentum that they are willing to give up a billion dollars.

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