Use this button to switch between dark and light mode.

DHS Head Asks For Key Reforms of EB-5 Program

May 03, 2015 (2 min read)

"U.S. Department of Homeland Security Secretary Jeh Johnson asked lawmakers this week to consider several key changes to the EB-5 immigrant investor program, according to a letter obtained by Law360, as the program is eyed for reauthorization before it expires this fall.

In the letter to high ranking members of the U.S. Senate Committee on the Judiciary, Johnson said any reauthorization should include reforms that would strengthen the program and address fraud and national security concerns.

He proposed, among other things, that Congress increase minimum investment amounts needed to secure investor visas and give U.S. Citizenship and Immigration Services the authority to sanction regional centers with fines, suspensions or termination.

“The reforms outlined above are not novel or complex, but if Congress incorporates them into any reauthorization of the regional center program, I am convinced that they will strengthen its integrity and viability while continuing to serve its underlying purpose of spurring economic growth and creating jobs in the United States,” he wrote.

First established in 1992 as a job-creation measure, the EB-5 program provides green cards to foreign residents who invest at least $1 million in the U.S. and create at least 10 full-time jobs for American workers. EB-5 applicants can also qualify if they invest $500,000 in a rural area or place with high unemployment.

The program, which has been a particular boon for real estate developers, was last extended for a three-year period in 2012, but the re-authorization period ends on Sept. 30.

In his letter, Johnson said under current law USCIS can only end a regional center’s designation if the center is deemed to no longer be “promoting economic growth.”

He asked Congress to give USCIS the authority to terminate a center’s designation if there are concerns of criminal activity or national security issues, as well as the ability to levy fines or suspensions.

He also suggested the agency be allowed to enhance the center’s annual reporting process and be allowed to deny applications for potential centers where there is a risk of fraud or abuse.

Turning to investments, Johnson said the minimum contribution required for a foreign investor to obtain a visa has remained unchanged since the program’s inception. He encouraged lawmakers to link that bar to inflation rates, which he said would create consistent requirements in the years ahead.

Speaking to the Judiciary committee Tuesday, Johnson said aside from the suggested reforms, he has put in place new protocol to make sure the EB-5 program “is free from the reality or perception of improper outside influence.”

A watchdog report earlier this year accused former USCIS director Alejandro Mayorkas of possibly pulling strings in the EB-5 program for certain politically connected Democrats.

Among other things, intervention in particular EB-5 cases by senior leadership should only occur in exceptional circumstances where the individual can “articulate and memorialize an impartial mission-related reason for intervention,” Johnson wrote in the letter." - Law360, May 1, 2015.