EB-5 Immigrants Include a High Percentage of Law-Breakers

By David North, January 19, 2017

Are the beneficiaries of any single provision of the immigration law more likely to be law-breakers (but not necessarily violent ones) than the beneficiaries of other provisions?

Our government does not publish statistics on this point, but for reasons outlined below, the probable answer is that the highest proportion of lawbreakers are in the EB-5 immigrant investor program.

Now there are law-breakers in all sizable groups of human beings. In my otherwise largely honorable graduating class from Princeton, for instance, one of the 600 of us was sent to jail for the unlikely crime of being a fence for stolen railroad property; he was the president of a short-line railroad. (I am not making this up.)

Similarly, there are at least some lawbreakers in each of the various subsets of migrants: refugees, family members, skilled workers, and asylum seekers; no screening mechanism (of a college or a nation) can detect all the suspect applicants.

But some provisions of the immigration law are more likely to attract lawbreakers than others, and this is particularly true of the immigrant investor program, as it currently operates.

Some 85 percent to 90 percent of each year's cohort of EB-5 visa holders are from mainland China. The principal visa holder in each family must bring $500,000 to the United States in order to qualify for the program. China has a ceiling on the amount of money one of its citizens can take out of the country each year — it is $50,000.

So how does an individual investor get 10 times that much money over its border and into the hands of the EB-5 program? How can someone get from China to here under this program without breaking at least the Chinese law? There would seem to be two different, equally unattractive alternative methods:

  • The individual investor, in fact, violates the law, or
  • The Chinese government colludes with the individual to meet some state objective.

If one uses either of these methods, one is a lawbreaker; in the first, the government defines the action as such, and in the second the government joins the conspiracy.

One of my growing collection of Chinese informants thinks that the second of the two techniques is more likely. He points out (and I am trusting his information) that China is one of those nations that has migrant exit control. If you leave the country, that country knows about it, as one of its people checks every passport of everyone leaving. If it bears the EB-5 visa, then there is a sure indicator of the departure of the $500,000

That must mean, he argues, that either a bribe changes hands or the exit-control official is acting in keeping with instructions to allow such departures; or maybe a little of each.

And of course some of the EB-5 investors — like my railroading classmate — have acquired some of their riches in an illegal manner, even before breaking the law to get the half-million out of China.

I understand that prohibiting individuals from taking lots of their own money over international borders may well be a debatable policy, but that seems to be the law in China.

Perhaps we have been paying too much attention to the economic aspects of the EB-5 program, how (if the money is not stolen on the American side) it simply expands the profits of already prosperous, big-city real estate developers, and is not being used, as Congress intended, to help distressed parts of the country.

Perhaps we should be looking at EB-5 as an immigration issue, with two obvious downsides: One, it is bad public policy by definition to sell part of our birthright, to sell visas to enter the country; this is a moral issue.

The second reason to question the program is that most of the people who arrive because of it have already broken the law in their homelands. Do we want to allocate most of the 10,000 visas used annually for EB-5 to lawbreakers and their immediate relatives?

Are we not, in fact, allowing ourselves as a society to be bribed (by the investments) to facilitate the entrance, in many cases, of individual, rich lawbreakers? It sounds like a thoroughly grubby process all around.

Sen. Dianne Feinstein (D-Calif.) is right: the program should be terminated.