How About 12,000 Extra Green Cards for Chinese Millionaires?

By David North, April 28, 2015

No congressman would have the gall to introduce straightforward legislation opening a large hole in the immigration system for a single favored group from a favored country, say Swedish teachers or Turkish farmers. Such legislation would leave all other immigration programs and allocations virtually in place, favoring only the right kinds of Swedes or Turks.

Such biased legislation, if correctly labeled, would never emerge from the subcommittee.

But six congressmen are — with straight faces — seeking similarly loaded, but heavily disguised, legislation in favor of rich Chinese migrants in the immigrant investor (EB-5) program. The authors of the bill may not be biased in favor of China, and there is nothing in the bill that even mentions the word "China", but the beneficiaries would probably be Chinese millionaires and multi-millionaires and their spouses and their kids.

It would be, for history buffs, the 19th century's Chinese Exclusion Acts in reverse. I think that immigration legislation should not be biased against people from a particular country, nor should it be tipped — heavily in this case — in favor of migrants from a specific nation.

It looks like the bill in question would create 12,000 or so additional immigration visas for a very specific sub-class of migrant millionaires from China.

The bill should be called "The Chinese Millionaires Relief Act", but it is not. H.R. 616 goes by the misleading title of "American Entrepreneurship and Investment Act of 2015". There is no need for the aliens involved to be entrepreneurs, by the way — all they have to do is to make a totally passive investment of half a million dollars. They need not have any involvement in the ongoing management of their money, and routinely do not.

It is a very special kind of investment, useful to aliens only; the investments must be made at the half-million level through one of 600 or so DHS-licensed regional centers. The funded projects are usually in construction or real estate ventures. The alien, his or her spouse, and all of their minor children then get green cards. Since there are something like 2.5 family members for each of these investments, the United States is selling each green card for about $200,000 — a tawdry thing for the government to do.

About 85-90 percent of these investor visas currently go to Chinese nationals. There is a 10,000 cap on the global number of visas each year. These visas are also subject to the usual provisions throughout much of the immigration law that set upper limits on the number of aliens that can come from a single nation in a year. The combination of these two factors, as we reported earlier, has seriously cut back on the number of visas available to those from China. The limits potentially apply to immigrants from every nation in the world, but in the case of EB-5 only China is affected.

Those arriving through the EB-5 program apparently can't qualify (or do not want to try to qualify) for our main-line immigration programs for family members, needed workers, or refugees, all factors needed for other immigrant visas. But they do have to have the half million.

Back to the bill. Fortunately, the main part of the EB-5 program is a temporary one. The part involving the half-million investments and the regional centers will run out on September 30 of this year. (This part, with the lower investment threshold, applies to investments in rural areas or areas with high unemployment.) In the other part of EB-5, investors control their own investments of at least $1 million.

Since half a million is smaller than $1 million, something like 99 percent of the investments take place through the sometimes corrupt regional centers. Should Congress not act on H.R. 616, the rest of the program would still be intact, but with aliens paying a full million for their sets of green cards.

As for the regional centers, there are more than 600 of them, all but two or three of a for-profit nature, mostly owned by citizens, and they will fight vigorously against the prospect of going out of business. They see EB-5 as a source of low-cost capital. It is the regional centers, scattered all over the nation, that will provide the lobbying in support of H.R. 616. I suspect the alien investors will not provide much political muscle in this fight.

The summary of the act, as prepared by the non-partisan Congressional Research Service, says the bill, among other things:

  • "Amends the Immigration and Nationality Act to make the immigrant investor program permanent";
  • "Exempts spouses and children of EB-5 immigrants from the EB-5 admissions limits"; and
  • "Eliminates the per-country limit for employment-based immigrants"

The second item above means, in effect that there will be about 15,000 more EB-5 visas, over and above the current 10,000 limit. (This number includes the 3,000 or so non-Chinese who would be eligible). The third item is a real-world explanation of the following clause, taken from the text of the bill:

SEC. 4. Numerical Limitations on individual foreign states.

(a) Numerical limitation to any single foreign state.—Section 202(a)(2) of the Immigration and Nationality Act (8 U.S.C. 1152(a)(2)) is amended —

(1) in the paragraph heading, by striking "and employment-based";

(2) by striking "(3), (4), and (5)," and inserting "(3) and (4),";

(3) by striking "subsections (a) and (b) of section 203" and inserting "section 203(a)";

(4) by striking "7" and inserting "15"; and

(5) by striking "such subsections" and inserting "such section".

One is grateful to CRS for that summary, but, like the bill itself, even the summary does not really show the specialized nature of the proposal, and how it favors one nationality over others.

The bill was introduced by Jared Polis (D –Colo.), and has been co-sponsored by two other Democrats, Ami Bera (Calif.) and Mike Quigley (Ill.), and three Republicans: Mark Amodei (Nev.), Robert Dold (Ill.), and Carlos Curbelo (Fla.). All except Amodei draw F- grades from Numbers USA for their migration-related voting records; his is graded B+.

No hearings have been conducted, but my sense is that will happen and the bill will pass — but perhaps as a three-year extension of the program, rather than making it permanent.

Incidentally, the bracero program, which allowed American agribusiness to exploit Mexican farm workers in the 1950s and early 1960s, was authorized by temporary legislation, which meant that the supporters had to push for renewal every two or three years. This became increasingly difficult and finally agribusiness made no effort to extend it beyond January 1, 1965, and it died.

May EB-5 have a similar fate!