Allow States and Victims to Fight Online Sex Trafficking Act of Motion to Proceed

Floor Speech

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Mr. GRASSLEY. Madam President, I rise today to bring to my colleagues' attention an issue that is important to millions of individuals who understand that American citizenship is something that ought to be treasured.

The American people understand that our citizenship is a blessing and shouldn't be given away cheaply. Unfortunately, for too many years, this body has witnessed the perversion and degradation of a program that sells--yes, we sell citizenship to some people.

This program originally had a good purpose. In return for investing money in underserved areas and creating good-paying American jobs, immigrant entrepreneurs could eventually become U.S. citizens. Sadly, in the last decade, this program has been hijacked by big-moneyed New York City real estate interests--to be specific, the Real Estate Roundtable. These developers now take almost all the foreign investment from this program, and for the last few years, they have actively prevented this body from enacting any reforms and needed reforms.

For those who are not aware, I am talking about the EB-5 Regional Center Program. I have been fighting in a bipartisan way for years to reform this corrupt and scandal-clad program. I have been fighting to protect our national security, to ensure foreign investment is going to the most deserving areas, and to make sure that American citizenship isn't sold at rock-bottom prices in order to feed the addiction of New York interests to cheap money. But no matter how hard I fought, each and every time we tried to reform this program, these same moneyed interests have used their political influence and political connections to block any meaningful reforms. This is sickening and is exactly why most American people sometimes question what we do here in Washington, DC.

After more than 3 years of trying to fix this broken and scandal- plagued program, I have finally come to the conclusion that it can't be fixed, and since it can't be fixed, the EB-5 Regional Center Program needs to be terminated. Let me explain to my colleagues and directly to the American people exactly how I have reached that conclusion.

Several years ago, I started working with then-Ranking Member Leahy of the Judiciary Committee on reforms to the EB-5 Regional Center Program. Through the hard work and dedication of our staffers, we discovered the program is riddled with fraud and corruption and poses a real and serious threat to our national security. I will explain some of those things we discovered.

First, investments can be spent before business plans are approved.

Next, regional center operators can charge excessive fees of foreign nationals in addition to their required investments.

Next, none of the jobs created have to be direct or verifiable jobs but rather are indirect and based on estimates of economic modeling; again, not knowing for sure if jobs are created.

Next, investment funds from foreign sources are not adequately vetted. Gifts and loans from anyone are acceptable sources of funds from foreign nationals.

Next, there is no prohibition against foreign governments owning or operating these regional centers or projects. So let me emphasize--that is right--foreign governments can own businesses that sell our citizenship. Now, think about that.

Another problem is regional centers don't have to certify that they comply with security laws.

Next, there are no required background checks on anyone associated with the regional centers.

Just take this example: One need look no further than the indictment last September of two Chinese fraudsters who stole more than $50 million in foreign investment and managed to sell U.S. citizenship to individuals on the Chinese Government's most wanted list.

Next, gerrymandering continues in rural and urban distressed areas and, as a result, lose out.

There is no transparency on how funds are spent and who is paid and what investors are told about the projects they invest in.

The list can still go on and on and on, but I have given my colleagues just some examples. I could literally speak for hours about the corruption of the program.

Faced with this appalling list of fraud, corruption, and national security loopholes, for 3 years, I have been working with Senator Leahy and our counterparts in the House of Representatives to produce real EB-5 reform. Our staffers have spent countless hours, nights, and weekends meeting with congressional colleagues and industry stakeholders to hammer out a compromise that is fair to all sides, but our offers have constantly been rejected by the Big Money industries, and related real estate roundtables, every single time--not just this time. We reached a compromise with the vast differences of views to start out but still ended up with a compromise. Somehow, these powerful interests are able step in and stop it. This time has been no different than at least three previous times we have gotten this far.

Let me explain how we have been doing this. For the last year, my staff, along with Chairman Goodlatte of the House Judiciary Committee, Senator Cornyn, and Senator Flake--these teams have worked around the clock to produce an EB-5 reform package. Everyone made numerous concessions in order to reach a compromise. After more than 20 meetings, and of course countless hours of drafting, we produced a reform package that was fair to all sides. Our reforms would reauthorize the Regional Center Program for 6 years, providing the certainty that industry has long said it craves.

Our compromise would have permanently set aside 3,000 visas for rural and underserved urban areas and would have increased the minimum investment amount to $925,000. In recognition of longstanding industry concerns, we agreed to reduce the investment differential between nonpriority areas and priority areas to a mere $100,000.

Finally, we would have implemented a host of badly needed integrity measures that would have cracked down on investment fraud, cracked down on foreign corruption, and cracked down on bad business practices.

Our reforms had the unanimous support of Invest in the USA, the largest EB-5 trade association. Our reforms had the support of the EB-5 Rural Alliance, a group working to ensure that rural America has a fair shake at attracting EB-5 money.

Why are rural areas such a high concern? Because, quite frankly, way back in the 1990s, that was one of the goals of the EB-5 program--to help economic development in rural America, but these reforms weren't acceptable to the Big Money New York industry stakeholders that currently dominate the program. Because Big Money interests aren't happy with these reforms, we have been told they will not become law.

I have laid out a lot here, letting it sink in for a minute. In spite of the fact that reforms were agreed to by congressional offices and had the support of the largest EB-5 trade association, they will not become law because a few EB-5 businesses, with lots and lots of money and lots and lots of political power, have used their political connections and influence, once again--for the third time; maybe even the fourth time over a period of that many years--to reach some sort of reform on a program we have demonstrated-- I shouldn't say we have demonstrated--we have repeated what the FBI and national security people and people in the Justice Department have said about the shortcomings of this program.

I said, at the beginning of my remarks, I finally realize this program cannot be reformed. I would have to say this for my present ranking member, Senator Feinstein, she has been telling me that for three or four years: Forget about reforming it; we ought to do away with it. The Regional Center Program is simply too corrupted to be saved, and it needs to be ended.

The American people deserve better than what we are seeing as a result of hard-working Members of the House and Senate trying to reform this program and getting nothing done.

So what happens here at the last minute? It will get stuck in an omnibus appropriations bill to extend it again for a period of time with the same bad practices that are going on. Why does that have to happen when it is so obvious what is wrong?

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