The Risky Business of Devolving Immigration Visas to States and Regions

By Dan Cadman on June 16, 2019

A few days ago, after lengthy proceedings through the lower court, a panel of the federal Fourth Circuit Court of Appeals dismissed a lawsuit filed by a group of Chinese visa investors against Terry McAuliffe and Anthony Rodham. McAuliffe is well known in political circles as the former head of the Democratic National Committee, former governor of Virginia, and Clinton confidante and money aggregator.

Rodham, whose death was announced by sister Hillary, was a less well-known figure, albeit always apparently on the fringes of the Clinton power circle and more than once alleged to have been involved in shady dealings and evading legal responsibilities (see here and here). Even the instant case, whose financial implications may have been resolved by this civil case, gave rise to serious questions of improper influence and pressure being exercised over the government officials charged with administering the alien investor program involved (EB-5, as it is called).

The decision comes too late to give Rodham any sense of relief, but McAuliffe, who briefly toyed with running for president in 2020, must feel the weight of an anvil has been taken off his back — assuming the investors don't go further yet and ask for a rehearing en banc of the full circuit.

I don't often feel bad for foreigners who try to game our system, but it isn't the Chinese investors who created the abysmal and corruption-ridden EB-5 investor program that was the fulcrum for the enterprise behind this lawsuit (a Virginia-based hybrid car company gone bankrupt; one that, frankly, had little chance of success from the start and appeared meant from day one to separate foolish people from their money). It was Congress.

Worse, the program often appears to be administered by the Three Monkeys division of U.S. Citizenship and Immigration Services (USCIS): See, Speak, and Hear No Evil.

My colleague David North has written long and persuasively about what a sham the program is (e.g. here and here ), as I have from time to time.

USCIS has granted EB-5 visas with abandon and exercised virtually no oversight or control of the many "regional centers" the law permits, whose job is to mate investors with con men well-intended developers, whose pristine motives are to ensure creation of jobs for Americans in under-developed areas of the country. Such regional centers, often created by or run at the behest of the states in which they operate, have themselves been drenched in scandal, including but not limited to the centers in South Dakota, Utah, and Vermont.

The problem with such state-affiliated regional centers is that they bring together the worst possible mix of politics, money, and greed, and do so out of the light of day, so that it's often only after a considerable period of time that financial and other high jinks become known, and by then the damage can be severe, and not just to the investors. The country itself suffers harm when its immigration system is so egregiously compromised. And, of course, the jobs these multifarious projects are supposed to be generating for the most needful in our society never come to pass.

This brings me to an article by Michael Strain that appeared in National Review Online in April of this year: "Visas for the Heartland". Replete with colorful visuals, Strain makes the case on behalf of the Economic Innovation Group, "a policy and advocacy organization that promotes economic dynamism", in his words, that advocates devolving responsibility for granting of visas to certain places in the country that face economic or population decline. The EIG has, of course, published a report to make that case. Such arguments have been made before, and not just with the "heartland" in mind. Detroit and other rust belt cities have also made the pitch, with visions of buying their way out of bankruptcy and decrepitude to become second Silicon Valleys on the backs of imported aliens, whose presence will somehow ameliorate decades of stupid political and economic decisions, not to mention poor urban planning.

I can think of no greater recipe for disaster, however sugar-coated or masterfully either Strain or the EIG make this confection. The EB-5 program shows as clearly as possible what happens when individual parts of the country are given authority to create visa programs with nothing but naked self-interest in mind. What's more, there is a kind of blind presupposition that the visa recipients would operate in good faith, once established with green cards in hand, and faithfully stay put long enough to actually do some good in the economically depressed or underpopulated areas of the country that lured them to begin with. That belies human reality, unless they are to be treated as serfs or indentured servants. Were such a program to be enacted, all of these areas would be well served to start building their own border walls — to keep this new generation of serfs in place.

It's more realistic to recognize certain truths: Local politicians and their cronies would enrich themselves; aliens would derive legal status and beat feet as quickly as they could to more vibrant or desirable areas; the local area that was the basis for these visas would remain under-served and under-developed; and the U.S. Congress would have created a giant system of never-ending visas because as each new group of aliens bolts from the area of need, why, then of course they would be obliged to establish need for a new, second (and third and fourth, ad infinitum) set of visas to replace the absconders.

One of the prime reasons that our founders jettisoned the Articles of Confederation was that they recognized there are times when, in the long-term interests of the states themselves, they must be deprived of the opportunity to look out for their own interests at the expense of the other members of the union. One of those key areas is immigration. However flawed and in need of reform, the immigration system is, and should remain, a national responsibility administered by the federal government. The way for states to have input is through their elected representatives in the halls of Congress.