Citizenship for Sale: An Evaluation of the Eb-5 Immigrant Investor Program after Twenty-Five Years of Iterations, Improvements, Kudos, and Consternation

Suffolk Transnational Law Review, Summer 2017 | Go to article overview

Citizenship for Sale: An Evaluation of the Eb-5 Immigrant Investor Program after Twenty-Five Years of Iterations, Improvements, Kudos, and Consternation


I. INTRODUCTION

"FREEDOM IS NOT FREE" is a timeless American phrase that hits at the core of the costs, both monetary and personal, required to enjoy the freedoms of democracy. (1) Today, however, freedom has a cost of about USD 500 thousand to USD 1 million for foreign nationals trying to become U.S. citizens, depending on where and how their money is invested. (2) While the EB-5 Program was created under an auspice of encouraging foreign investment, the current provisions disenfranchise other foreign nationals going through the typical naturalization process in favor of those with deeper pockets. (3)

The program has also been criticized as having a relatively minor impact on the U.S. economy while welcoming in wealth whose origins are often difficult to trace and potentially unsavory. (4) Without a permanent approval from Congress, the initiative is constantly at a crossroads that teeters on future importance or repeal. (5)

This Note primarily considers whether the regional center initiative of the EB-5 Immigrant Investor Program, offering visas for investments of USD 500 thousand and creation of ten jobs, has been worth the significant influx of foreign investment dollars, inherent risks, and evidenced fraud. (6) Part II will discuss the history of the EB-5 program from its inception in 1990 through its temporary renewal in December 2015. (7) Part III will discuss various audits of the program and recent legislative attempts at reform. (8) Part IV of this Note will analyze the above to assess the effectiveness of the EB-5 Program and argue that the program should be eliminated, if not drastically reformed. (9) Part V of this Note will conclude by providing a final conclusion based on the above finding. (10)

II. HISTORY

Becoming a legal permanent resident in the United States grants foreign nationals the right to live in the United States for an unlimited time period. (11) Since 1965, one avenue to become a legal permanent resident has been through investment in the United States. (12) Early investor visa program policies did not, however, carry with them the same preference that present day programs allow. (13) Policies in 1965 created an investment visa option for foreign nationals, but there was no allocation of visas for this category; applicants were put into the general pool with all other non-preferred applicants which limited the usefulness of such a program. (14) Generally, before the late 1980s, immigration policies in the United States largely focused on preventing illegal immigration and promoting the reunification of families, rather than encouraging legal immigration. (15)

Global developments in the mid-1980s began to change the immigration conversation in the United States. (16) The Canadian and Australian governments began to roll out immigration investment visa programs "primarily to attract wealthy Hong Kong residents" who were concerned with the Chinese government's increasing control of the colony. (17) The programs proved to be a great success in their early inception; the Canadian program in particular had raised an estimated CAD 2 to 4 billion per year from Hong Kong immigrants. (18) By the late 1980s, the United States began consideration of substantial immigration reforms that included a preference-based investor visa program as a central component. (19)

A. Early Opposition for Preference-Based Investor Visa Implementation

Opposition to a foreign investment visa centered on the morality of putting a price on immigration. (20) Rather than encouraging immigration for political freedoms and patriotism, this program permitted entrance to aliens that were motivated by economic profits and their own bottom line (21) There was also concern about the source of foreign funds and whether they may have immoral or illegal origins. (22) By creating an exception to immigration policies, an investor visa program became "an outrageous opportunity for fraud and evasion of the law. …

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