Aaron Grau, Executive Director of the industry’s only trade association, has a clear and urgent message: support the Grassley and Leahy EB-5 Integrity and Reform bill. It offers five-year reauthorization, protects good-faith investors and industry players — and is the only path to more visas in the future. Unlinked from regular budget legislation, EB-5 now stands alone to be examined by lawmakers — and will expire June 30, 2021 without reauthorization. Grau counsels that if we support reform, “this crisis becomes an opportunity.”
Aaron Grau does not mince words: “Be clear about this. If the EB-5 Regional Center program is not reauthorized before June 30th, it will cease to exist.”
He is not panic-mongering. As EB-5 is no longer coupled with standard budget legislation, it no longer has the typical sunset date at the end of the fiscal year. Instead, it was extended for only six months until June 30, 2021.
The EB-5 Reform and Integrity Act, which IIUSA negotiated with Senators Grassley and Leahy, was not finalized in time to be part of the last omnibus bill. The implications of this are huge.
EB-5 now stands on its own for lawmakers to review, and potentially reject, or support with reauthorization. And make no mistake about it; though the program has bipartisan support, it also has many critics in Congress who see it as rife with abuse and fraud.
Grau tells us that though we’ve gotten used to short-term reauthorizations in the recent past, it’s different this time. EB-5 no longer has the “safe haven of being part of bills that must, and always eventually do, pass.”
Reform and integrity measures, written into law, are no longer merely to be wished for but necessary for the survival of EB-5.
If the EB-5 regional center program that has, between 2008 and 2015, injected $20.6 billion into the U.S. economy and created thousands of U.S. jobs, is not reauthorized, the program will end; and the consequences will be dire. Thousands of investors and economic developments projects across the country will be thrust into limbo — at a time when the U.S. most needs economic stimulus.
Grau knows that the industry has many other issues it hopes will be addressed: Targeted Employment Area regulations, investment amounts, more visas, and processing efficiency. And he knows that many stakeholders question why the EB-5 Reform bill does not include any of them.
The answer is simple: Senators Grassley and Leahy mandated that the only issues that could be negotiated at the time would be integrity reforms and long-term reauthorization. This was the senators’ rules of engagement.
IIUSA simply could not hope to include other vital issues until integrity measures and reform were finalized. “Reforming the EB-5 program is necessary to achieve any other significant legislative goal. With integrity reforms enacted and a long-term reauthorization in place, the industry can pursue other legislative objectives.”
Still, there are EB-5 stakeholders who don’t like this answer. Why couldn’t IIUSA hold out on offering reform until these other issues were addressed? The answer is simple. Leverage, or lack thereof. IIUSA and EB-5 as an industry doesn’t have the clout required to negotiate a “grand bargain” of all the EB-5 issues.
Grau speaks frankly in reminding us that EB-5’s leverage has waned in Congress and will continue to do so until reform is enacted. To try to negotiate everything at once is counter-productive as it will hit a wall of “long-standing differences” predicated on resolving the integrity issues of the program. Such unproductive debate would take far too much time. “Time,” Grau tells, “is a luxury we do not have.”
This bill should not be supported merely to ensure the survival of EB-5; it should be embraced for how it helps investors and the industry.
Grau declares, “its language reflects the best integrity package the industry has seen in all the years of negotiating with Congress on integrity reforms.” The bill protects honest investors, regional centers, and new commercial enterprises — all under “reasonable” oversight.And, vital to the industry’s concerns moving forward, a five-year reauthorization, gives the industry the time it needs — without the question of integrity looming over its head — to negotiate the issues that EB-5 needs to address to thrive going forward.
IIUSA and Aaron Grau want you to know this. They want you to support the bill that is the “best and perhaps only path to reauthorization.”
And they want Congress and the country to know that EB-5 can be a vital component of the economic stimulus and job creation the country needs at one of its darkest periods in recent history.
This is not rhetoric. It’s a question of survival — and then thriving. Call IIUSA, support the EB-5 Reform and Integrity Act, 2021. Be part of the solution for the industry and the nation.
Read Aaron Grau’s release “State of the EB-5 industry and its path forward.”
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