Plenty can go wrong when foreign money mixes with immigration green cards, real estate deals and political connections.
Revelations that the sister of Jared Kushner, President Donald Trump’s son-in-law and adviser, promoted a program offering a path to U.S. citizenship to Chinese backers in a Kushner family project bring new scrutiny to a foreign investor visa program. The Kushner Companies apologized Monday, saying it had not meant to lure investors by using Jared Kushner’s name at an investment promotion event held Saturday at a Ritz Carlton in Beijing. Marketing materials for the event promoted Nicole Kushner Meyer as Jared’s sister, and cited the Kushner family’s “celebrity” status.
The project promoted by Meyer in Beijing is a 79-story apartment building in Jersey City, New Jersey, called Kushner 1. The company is seeking 300 aspiring U.S. residents to invest a total of $150 million, and it follows other Kushner family projects using the investment program known as EB-5, including a nearby Trump-licensed building promoted as “Trump Bay Street.”
At a press briefing, White House spokesman Sean Spicer said Jared Kushner has no involvement in the project. An attorney for Jared Kushner said he had sold his stake to a trust benefiting other members of the Kushner family, and would recuse himself from related policy matters while serving as an adviser to Trump.
Though the foreign investor immigration program has become a source for cheap real estate financing for projects like the Kushner family’s, questions about its fairness and national security implications have made it a political briar patch for years. One recent scandal involved Hillary Clinton’s brother.
Created to counter recession
Created in 1990 as a way to encourage investment during a recession, the program requires foreigners to invest $1 million in a business that sustainably employs 10 people anywhere or $500,000 in rural areas or those with high unemployment.
The smaller investment is done through a regional center, a collection point for multiple investments that can be used for a variety of projects. The regional center is at the root of many complaints about the program.
As part of such deals, investors – who in recent years have been overwhelmingly from China – typically accept below-market investment returns to qualify for a visa, allowing the developer to pocket the savings on financing costs. After as little as two years, participants can apply for a fast-track green card and later U.S. citizenship. With permanent residency in hand, the foreign investors can then sponsor additional visas to bring in family members.
Critics have faulted the program for failing to bring investment into downtrodden communities as intended. By gerrymandering together rich geographic areas with poor ones, developers have managed to win approval from economic development authorities for luxury projects in Manhattan, Beverly Hills and Miami’s South Beach.
Risks involved
Beyond the question of whether the program encourages development as intended lie allegations of political favoritism and national security risks.
President Barack Obama’s choice for the No. 2 official at the Homeland Security Department nearly had his appointment derailed in 2013 amid allegations that he provided special treatment to a company run by former Secretary of State Hillary Clinton’s brother and others. Alejandro Mayorkas was accused of intervening in three visa cases involving prominent Democrats, including Clinton’s brother.
The Homeland Security Department inspector general concluded in 2015 that Mayorkas’ intervention created the appearance of favoritism and special access. Mayorkas denied wrongdoing. He said at the time that while he disagreed with the inspector general’s report, he would “certainly learn from it and from the process.”
Program’s flaws
U.S. officials have raised concerns about the vetting of investors, too. A 2013 Homeland Security Department investigation cited risks that Iranian intelligence operatives may have exploited the program, and the United States Citizenship and Immigration Services found numerous fraudulent documents when it audited a sampling of investors’ green card applications.
In an unclassified State Department report from June 2012, officials said that Chinese applicants to the program are “usually coached and prepped for their interviews, making it difficult to take at face value applicant claims regarding income” or membership in the Communist Party.
In 2015, the Government Accountability Office warned that the program could not reliably catch fraud by visa applicants who bought into the program with money obtained through drug trade, human trafficking, or other criminal activities.
The program’s flaws have drawn repeated efforts by members of Congress, including Sens. Chuck Grassley, R-Iowa, and Diane Feinstein, D-Calif., to impose further oversight and restrictions on the visas, but such efforts have not overcome substantial lobbying by developers and real estate interests.
On Monday, Trump administration spokesman Sean Spicer said the president would look at the foreign investor visa program as part of a broader review of immigration policy.
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