Photo Credit: The Washington Post
UPDATE: Reporters were barred from a second Kushner EB-5 event in Shanghai — details below.
This resource page was created to give you background on the story about the Kushner family’s new project being pitched in China to entice investors through the EB-5 immigrant Visa program.
As the Financial Times reports:
Jared Kushner’s sister appeared at a Beijing sales event at the weekend to pitch Chinese investors on a New Jersey real estate project, an event that touted the Kushner name and “government support” in its marketing materials.
Mr Kushner’s sister Nicole Meyer spoke to a ballroom at the Ritz-Carlton Hotel as part of her company’s effort to raise $150m from wealthy Chinese hoping to obtain green cards through a US investment immigration scheme. Marketing materials for the event touted the Kushner Companies project, located in Jersey City, New Jersey, as “Kushner 1”. In the US, it is known as One Journal Square. The advertisement also refers to “government support” for the project without elaborating.
The EB-5 program itself is a prime example of the kind of elitist globalism that candidate Trump ran against. As EB-5 critic David North has explained the program:
The EB-5 or immigrant investor program offers a family-sized set of green cards (ultimately) to alien investors who place $500,000 in investment pools authorized by, but not guaranteed by, DHS. These investments are supposed to be made in depressed areas, defined as having 150 percent of the nation’s unemployment rate. The program allows for the definition of targeted employment areas (TEAs) by, in effect, the promoters of what usually are urban real estate deals.
What has happened over time is that supine bureaucrats have allowed creative middlemen to draw fanciful TEAs in which the census tract where the project is to be built — usually a glitzy downtown location — is joined to a gerrymandered string of other census tracts that, collectively, meet the 150 percent of unemployment criteria. One day, in about an hour, I created such a tract that would allow an EB-5 project to be built across the street the from the White House, on the grounds that the president’s mansion was in a depressed area, as we reported at the time.
This is a scandal that may bring criticism not from President Trump’s core base of supporters but also from many on the left. Again quoting North from a recent article titled The EB-5 World: Much Ado About a Lot:
Sen. Chuck Grassley (R-Iowa), chair of the powerful Judiciary Committee, who has been valiantly trying to reform the program, has decided that it is beyond redemption and has joined Sen. Dianne Feinstein (D-Calif.) in calling for its termination.
The Washington Post, in a lead editorial the other day, agreed with the two senators.
Grassley said, according to NBC News:
Unfortunately, despite its many flaws, EB-5 proponents are apparently content with the status quo, and that’s unacceptable. I was hoping that it would not come to this point, but absent serious efforts to bring about reforms, we need to take the necessary steps to wind down the program and completely mitigate fraud, abuse, and threats to our security.
The Post, which is routinely pro-migration, said this:
[T]he EB-5 program, which began a quarter-century ago as a well-intentioned plan to attract international capital to the United States, has morphed into a scandal-ridden embarrassment.
I’ve included more of North’s great work on this page below.
Kushner, Trump and the EB-5 Program
May 06, 2017
Washington Post: In a Beijing ballroom, Kushner family pushes $500,000 ‘investor visa’ to wealthy Chinese
Over several hours of slide shows and presentations, representatives from the Kushner family business urged Chinese citizens gathered at a Ritz-Carlton hotel to consider investing hundreds of thousands of dollars in a New Jersey luxury apartment complex that would help them secure what’s known as an investor visa.
The potential investors were advised to invest sooner rather than later in case visa rules change under the Trump administration.“Invest early, and you will invest under the old rules,” one speaker said.
The tagline on a brochure for the event: “Invest $500,000 and immigrate to the United States.”
Nicole Kushner Meyer, the sister of White House adviser and President Trump’s son-in-law Jared Kushner, spoke at an event in Beijing on Saturday. She was marketing a Kushner-owned property in New Jersey — invest in the development and get into the United States on a so-called EB-5 visa.
The EB-5 visa allows immigrants a path to a green card if they invest more than $500,000 in a project that c
Reporters were forced out of the room during the Kushner family’s presentation to wealthy Chinese investors
Representatives for the Kushner family reportedly asked journalists to leave the room during a presentation they were making to wealthy Chinese investors in Beijing, The Washington Post reported on Saturday.
Reporters were initially seated in the back of the ballroom at the Ritz-Carlton, but as the presentation began, The Post said that a PR representative for the family asked its reporter to leave, saying that the presence of “foreign reporters threatened the ‘stability’ of the event.”
In one instance, event organizers grabbed a reporter’s belongings, including a phone and backpack, to try to force that person out, the report said. When the event’s attendees began leaving the ballroom after the presentation was over, organizers reportedly surrounded the event-goers to prevent them from talking to reporters.
When a PR rep was asked why reporters were told to leave the event, she said, “This is not the story we want.”
— NYT Politics (@nytpolitics) May 7, 2017
Organizers barred journalists on Sunday from a publicly advertised event in Shanghai that offered Chinese investors the chance to get U.S. immigrant visas if they put money in a real estate project linked to the family of President Donald Trump’s son-in-law.
“Sorry, this is a private event,” said a man stopping journalists from entering a function room at the Four Seasons Hotel in Shanghai.
Guests at the event said Kushner’s sister, Nicole Kushner Meyer, spoke for about 10 minutes, including about her family’s humble roots.
According to the New York Times, Meyer attended a similar event in Beijing on Saturday and told the audience of about 100 people the project “means a lot to me and my entire family”.
“Mr. Kushner has no involvement in the operation of Kushner Companies and divested his interests in the One Journal Square project by selling them to a family trust that he, his wife, and his children are not beneficiaries of, a mechanism suggested by the Office of Government Ethics,” his lawyer, Blake Roberts of WilmerHale law firm, said in a statement emailed to Reuters by the White House.
Like many American firms that come to China looking for money, Kushner Companies on Sunday tried to woo a Shanghai audience with promises of potentially big returns and a path toward living in the United States.
But for Bi Ting, who attended the event, part of the appeal was political: Jared Kushner is the son-in-law of — and a powerful adviser to — President Trump. Virtually unheard-of in China just months ago, he is now known here as a deeply influential figure in American politics.
“The Trump relationship is an extra point for me,” Ms. Bi said, adding that she and her husband had not decided whether to invest.
The Kushner Companies’ China roadshow, promoting $500,000 investments in New Jersey real estate as the path to a residency card in the United States, moved to Shanghai on Sunday after a similar pitch on Saturday in Beijing. Security was tighter in Shanghai than it had been in Beijing, where reporters for The New York Times and The Washington Post briefly attended the event before being kicked out.
Trump Bay Street Project Developed by Kushner Was EB-5 Funded
Breitbart in 2016: Report: Trump In-Laws Using Chinese EB-5 Visas to Build Tower
Bloomberg reported Monday that Trump Bay Street, a 50-story apartment complex being built in Jersey City by the Kushner Companies, is being partially funded through a controversial immigration program known as EB-5.
The CEO of the Kushner Companies, Bloomberg notes, is Jared Kushner, who is married to Trump’s daughter Ivanka.
The completed project “will have an outdoor pool, indoor golf simulator and sweeping views of Lower Manhattan,” Bloomberg notes.
Under EB-5, foreigners receive a two-year visa in exchange for investing at least $500,000 in the U.S., with enhanced opportunities for permanent residency. Out of 10,000 visas available, Chinese citizens account for about 85% of the total awarded, the Wall Street Journal has reported.
May 12, 2014 09:00AM
Donald Trump’s Trump Organization and his son-in-law’s Kushner Companies are teaming up for their first big project, in conjunction with KABR Group of New Jersey.
The trio is planning a 447-unit rental apartment building in Jersey City, sources involved in the project told the Wall Street Journal. The Kushner-KABR partnership plans to put $38.5 million of its own equity into the deal, and the rest will be paid with a $90 million construction loan and $65M in mezzanine financing tied to a federal government visa program, the Journal reported. The details of the Trump Organization’s involvement were not immediately clear.
March 07, 2016 11:31AM
Nearly all investors were Chinese, despite GOP frontrunner’s rhetoric
GOP presidential frontrunner Donald Trump’s views of immigration and Chinese competition seemingly didn’t affect his son-in-law Jared Kushner’s pursuit of EB-5 financing for his Trump Bay Street project in Jersey City.
Kushner Companies and partner KABR Group raised $50 million in funds through the controversial program for the planned 50-story, 447-unit rental tower at 65 Bay Street, about a quarter of the total financing, Bloomberg reported, citing the U.S. Immigration Fund’s Mark Giresi.
Nearly all the investors were Chinese, Giresi told the news service.
February 16, 2017 04:35PM
The program is also falling far short of its own stated goals, the New York City officials write. Citing the federal government’s own report from October, only 12 percent of EB-5 investment goes to areas with at least eight percent unemployment, a problem that has been exacerbated by “gerrymandering” of the Target Employment Areas (TEAs) that are supposed to bring money into struggling communities.
On top of that, the amount of investment going towards luxury real estate, they argue, will drastically affect real estate values, making affordable housing development more challenging and increasingly the likelihood of tenant displacement.
“The incoming Trump administration has proposed punitive attacks on vulnerable immigrant groups, but has signaled support for the scandal tarred EB-5 Visa Program which benefits only the extremely wealthy” the Senators say.
Brand name New York City developers such as Related Companies, Silverstein Properties, CIM Group and Forest City Ratner have spent big bucks lobbying Congress to reauthorize EB-5. Related Companies, which raised $600 million in EB-5 funds for Hudson Yards, spent over $1.4 million in lobbying for the program since January 2015, the Wall Street Journal reported.
And they count the support of the nation’s most powerful Democrat — New York Senator Chuck Schumer, who has advocated for the program even in cases where it doesn’t appear to directly benefit communities most in need.
Ivanka retains her extensive international clothing, shoe and accessories businesses. That means she and Jared will have to recuse themselves from trade issues and discussions involving these products specifically and textiles more generally, anywhere in the world that might touch on her businesses. The same is true regarding intellectual property protections in trade negotiations. For example, Ivanka is reported to have seven trademark applications pending in China. So she and Jared should recuse themselves from trade issues with China involving intellectual property.
Because issues in trade negotiations are so intertwined, Ivanka’s tangle of international conflicts could in practice require the couple to recuse from any trade discussions with China and other countries with which she does business. And she and Jared will also have to recuse more broadly from any disagreements with those countries the moment trade issues are injected into those disputes.
We have serious questions about how all these recusals can be fully implemented and monitored — and whether they will be. Assistants to the president need to be prepared to advise him on any matter at any time. They should expect to be drawn into more issues rather than fewer. Jared’s expanding portfolio attests to this fluidity. Yet he and Ivanka are legally required to recuse within the broad areas of financial services deregulation, taxes and trade, all of them extremely important to the president
Some Breitbart Coverage of the EB-5 Program
Some people have asked me if Steve Bannon knows about EB-5.
He does and Breitbart articles prove it. https://t.co/NProH35j6r
— Lee Stranahan (@stranahan) May 7, 2017
The EB-5 visa program — wherein foreign investors can be placed on a path to citizenship by investing and creating at least 10 full-time jobs in U.S. — is a scam, University of Chicago Law School professor Eric Posner concludes.
“If you want to find a real scam involving a country that sells citizenship to foreigners, you don’t need to look overseas. Here at home we do just that with a ludicrous program for ‘immigrant investors.’ It’s the worst combination of bad economics, political cronyism, and unfairness—and it has been endorsed by saints of capitalism Warren Buffett and Bill Gates,” Posner writes in a column published at Slate this week.
Posner dissects the problems with the program — which requires a minimum investment of $1 million ($500,000 if the investment is made in a high-unemployment area) as a poorly conceived scheme that foreign immigrants can easily manipulate:
Given the size and liquidity of capital markets, the program has reduced the cost of capital by an infinitesimal amount, basically zero. A tiny reduction in the cost of capital might produce a tiny increase in the number of jobs, but most likely it will produce a tiny increase in profits for other investors or tiny reductions in price for consumers. It’s a bit like saying that you can immigrate to the United States if you buy a few cars from a domestic auto dealer at a price slightly higher than what the dealer is charging.
The GAO reports, however, that the program is a source of unique, constantly evolving risks, that U.S. Citizenship and Immigration Services’ assessments of the economic benefits may not be accurate, and that its data collection methods are incomplete. Further new information systems to collect more data are years away.
Such fraud risks include uncertainties about the sources of investor funds, questions about the legitimacy of EB-5 investment entities, and political favoritism.
The GAO report, released Wednesday, notes that Securities and Exchange Commission officials have identified fraudulent investment schemes and from 2013-2015 “reported receiving over 100 tips, complaints, and referrals related to possible securities fraud violations and the EB-5 Program” with over half resulting in further investigation. As of May, there were 59 open investigations into EB-5 investment schemes.
Senate Judiciary Chairman Chuck Grassley (R-IA), who has sounded the alarm about fraud in the program, reacted to the report saying the “status quo is unacceptable.”
Other examples cited by the Post include a bogus convention center project in Chicago that soaked Chinese investors for a cool $11 million in “administrative fees,” and a $5 million operation that essentially sold EB-5 visas to Mexican, Egyptian, and Nigerian investors, but never delivered the desired documents.
The punch line to this example of our ramshackle immigration system is that no one in the U.S. government really does anything to verify the investment plans are legitimate. The whistle doesn’t get blown until someone yells fraud, and with huge construction projects, it can take a while before it becomes evident that work is more than just “behind schedule.”
Columnist Michelle Malkin has a full chapter on EB-5 abuse, which she dubs “America’s disastrous Cash-for Citizenship racket,” in her new book Sold Out: How High-Tech Billionaires & Bipartisan Beltway Crapweasels Are Screwing America’s Best & Brightest Workers. A full review of the book can be found here.
David North from The Center for Immigration Studies on EB-5
For more reading on EB-5, David North is a great place to start. Mr. North has done noteworthy work on the EB-5 program and you can find a long list of his stories here.
…some provisions of the immigration law are more likely to attract lawbreakers than others, and this is particularly true of the immigrant investor program, as it currently operates.
Some 85 percent to 90 percent of each year’s cohort of EB-5 visa holders are from mainland China. The principal visa holder in each family must bring $500,000 to the United States in order to qualify for the program. China has a ceiling on the amount of money one of its citizens can take out of the country each year — it is $50,000.
So how does an individual investor get 10 times that much money over its border and into the hands of the EB-5 program? How can someone get from China to here under this program without breaking at least the Chinese law? There would seem to be two different, equally unattractive alternative methods:
• The individual investor, in fact, violates the law, or
• The Chinese government colludes with the individual to meet some state objective.
If one uses either of these methods, one is a lawbreaker; in the first, the government defines the action as such, and in the second the government joins the conspiracy.
One of my growing collection of Chinese informants thinks that the second of the two techniques is more likely. He points out (and I am trusting his information) that China is one of those nations that has migrant exit control. If you leave the country, that country knows about it, as one of its people checks every passport of everyone leaving. If it bears the EB-5 visa, then there is a sure indicator of the departure of the $500,000