Washington, DC – During a hearing of the Senate Judiciary Committee, U.S. Sen. Jeff Flake (R-Ariz.) urged the committee take up S. 2415, the EB-5 Integrity Act, a bipartisan bill introduced by Flake and U.S. Sens. John Cornyn (R-Texas) and Chuck Schumer (D-N.Y.) that would provide a comprehensive package of important reforms to the EB-5 Regional Center Program. These reforms include significant new agency authorities, measures to enhance accountability and transparency, combat fraud, and protect national security. Flake also used the hearing to stress the importance of strengthening integrity measures within the EB-5 Regional Center Program so that it may continue to bolster the economy.
“The EB-5 program is a valuable program, albeit one that has some issues surrounding it that are imminently solvable,” said Flake. “I agree with my colleagues who say we should amend it, not end it.”
Video of Flake’s opening statement can be viewed here.
A transcript of the remarks can be viewed below.
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FLAKE: Thank you and I want to thank the chair and the ranking minority member for calling this hearing. These are important issues and I appreciate the answers that have been given and the discussion that’s been had.
When you look at the backdrop here that we are discussing this program, or the reform of this program in, it’s a backdrop of an economy that is struggling to recover. The U.S economy isn’t exactly going “gangbusters.” We’ve limped along at about 2 percent growth for a number of years now and to take away a tool like this that can provide and has provided significant investment in the economy, here I think is a wrong approach. So we should mend it not end it.
If we talk about how we shouldn’t be selling visas to the highest bidder kind of thing, if you look at our immigration programs, a number of our programs have to do with strengthening our economy and whether it’s bringing people here to fill gaps in our high-tech economy that we don’t have the people here for, or on the lower skill side as well much of our immigration structure is geared toward benefitting our economy and this is just one of those programs and it has been a very successful one.
I should say in Arizona, we are fortunate to have a number of charter schools that have been funded through the EB-5 program, but as has been mentioned there are a number of reforms that need to be made. We have recognized this and we have promoted these reforms. As Senator Schumer mentioned, during the so called “gang of eight bill” or S. 744 we included a number of very tough reforms and I wish that bill had passed, but it didn’t so we have moved ahead with other reforms. We want to make sure we have a balance here. I think that it is proper and I am glad Senator Schumer is here to instill some “New York values” that we have heard so much about lately. But he is right, you can’t just say, “alright, here is where the investment can be made or can’t be made” and not take into account where individuals are traveling from or where they work because of these investments and the benefit to the economy generally.
I just appreciate what you have said already about the EB-5 Integrity Act and how you believe that it does provide some tools that will be helpful to better insure that we root out any fraud or abuse that is occurring.
Now, let me just ask a question with regard to, I think over the last eight years, the number of denials has increased from 120 to just over 1,000 in the past eight years. But then from 2014 to 2015, the number of denials was down from 178 in 2014 to just a few, 11, so we have seen a dip and fall. Can you give some indication of the number of denials that come – is that a function of applications, or is increased enforcement action on the part of immigration, or the SEC? What can we attribute this fluctuation to?
COLUCCI: I think you can attribute the result of decreased denials due to a couple of things, but first is probably the policy memorandum that we put out in May of 2013. It served to provide our judicators as well as stake holders, a very consistent way that we administered the program. It made a number of clarifications and I think it just served to improve the quality of the applications and the petitions that we received. I’d also mention we have a number of individuals who can represent regional senators and petitioners and they do so for a wide variety of clients and so they are very familiar with the program requirements and so we see better applications now than we did say in 2010.
FLAKE: Do you have any thoughts on that from the SEC’s perspective?
COHEN: No senator, we do not have any role in that aspect of the program.
FLAKE: Alright, well thank you. Well let me just say Mr. Chairman, I hope that we do and we are able to markup legislation. It is not a good thing to just simply see the program reauthorized without the reforms that all of us recognize that are needed. And so, it’s a good time this year to actually move legislation that will reform the program and put in place the measures that we know need to be put in place. Thank you for having this hearing.
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