The dark, disturbing world of the visa-for-sale program

On Nov. 15, 2012, about 100 people gathered in a parking lot near O’Hare Airport in Chicago for a ceremonial occasion: the demolition of a fleabag motel to make way for what was intended to be a world-changing construction project. Next door to a Hooters restaurant, just off the Kennedy Expressway, was to rise a commercial and environmental wonder—the “World’s First Zero Carbon Platinum LEED-certified and 100% Allergen Free convention center and hotel complex.” Lest anyone doubt its global eco-import, the project’s developer was branding it as a “Kyoto Protocol Centre.” At a projected cost of $913 million, it was to include three connected towers—14, 17, and 19 stories tall—containing five upscale hotels with 995 suites and rooms, four levels of convention space, a green roof with a spa and yoga studio, a miniature golf course, and a 1,720-car “automatic robotic” parking garage. All this would be financed with the help of a government immigration program known as EB-5, which allows wealthy foreigners to obtain U.S. citizenship by sinking $500,000 apiece into a venture that creates American jobs. Spellbound by the sales pitch—which included “guarantees” that the project would deliver visas and juicy returns—nearly 300 eager Chinese investors had anted up a total of $147 million. You may never have heard of EB-5, the program that delivered $147 million to Sethi’s convention-center dream. It is one of the least explored of the many dark corners in America’s deeply troubled immigration process. Increasingly, the skilled and the poor are out of luck. But the rich are another matter. The program (EB-5 is short-hand for the government’s fifth employment-based visa “preference”) allows well-heeled foreigners to leap to the front of the line by simply plunking down $500,000. But that powerful objection was overcome with an even more potent counterforce: The program would generate jobs where they’re needed most. Immigrants seeking EB-5 visas must invest their half-a-million dollars in a new business that creates 10 full-time U.S. jobs in a high-unemployment or rural district. (Technically, one can obtain an EB-5 visa for $1 million with no requirement that the jobs benefit a struggling area; in reality, few apply under that provision.) Today EB-5 commands bipartisan support—and it’s booming. Believers tout the program as a “win-win-win” that helps immigrants and U.S. workers, and provides valuable investment in American communities. A trio of billionaires—Warren Buffett, Bill Gates, and Sheldon Adelson—recently endorsed the program in an op-ed column in the New York Times. But because the EB-5 industry is virtually unregulated, it has become a magnet for amateurs, pipe-dreamers, and charlatans, who see it as an easy way to score funding for ventures that banks would never touch. They’ve been encouraged and enabled by an array of dodgy middlemen, eager to cash in on the gold rush. Meanwhile, perhaps because wealthy foreigners are the main potential victims, U.S. authorities have seemed inattentive to abuses...more