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| $50m Trump residential development relied on immigrant visa funds | |
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| The first residential Trump-branded development to open since Donald Trump’s election victory last month opened for business in Jersey City, New Jersey, this week. | The first residential Trump-branded development to open since Donald Trump’s election victory last month opened for business in Jersey City, New Jersey, this week. |
| The gleaming Trump Bay Street complex, a luxury rental project completed under the direction of Jared Kushner, son-in-law and would-be White House adviser to the president-elect, sits across the Hudson river, minutes from Manhattan’s financial district by train or ferry. | The gleaming Trump Bay Street complex, a luxury rental project completed under the direction of Jared Kushner, son-in-law and would-be White House adviser to the president-elect, sits across the Hudson river, minutes from Manhattan’s financial district by train or ferry. |
| The project was built by the Kushner family’s Kushner Co operation, which boasts of completing more than $7bn in acquisitions under Kushner, its CEO, since 2007. | The project was built by the Kushner family’s Kushner Co operation, which boasts of completing more than $7bn in acquisitions under Kushner, its CEO, since 2007. |
| The 50-storey building is not lacking in Trumpian grandiosity. Renters are promised a top-hat wearing concierge and furnishings chosen by Kushner’s wife, Ivanka’s personal decorator, in conjunction with the home furnishing superbrand Restoration Hardware. | The 50-storey building is not lacking in Trumpian grandiosity. Renters are promised a top-hat wearing concierge and furnishings chosen by Kushner’s wife, Ivanka’s personal decorator, in conjunction with the home furnishing superbrand Restoration Hardware. |
| But critics say Trump Bay Street, which uses the Trump name under licence and is now leasing apartments starting at $3,100 a month, is also a showcase for something else: the misuse of an controversial immigrant visa program originally designed to promote economic investment to disadvantaged areas through the sale of visas that can ultimately be converted to citizenship. | But critics say Trump Bay Street, which uses the Trump name under licence and is now leasing apartments starting at $3,100 a month, is also a showcase for something else: the misuse of an controversial immigrant visa program originally designed to promote economic investment to disadvantaged areas through the sale of visas that can ultimately be converted to citizenship. |
| Kushner’s development, with its chef’s dining tables and elaborate health and sports facilities, was completed with upwards of $50m raised through EB-5 financing, according to a slide presentation by US Immigration Fund. | Kushner’s development, with its chef’s dining tables and elaborate health and sports facilities, was completed with upwards of $50m raised through EB-5 financing, according to a slide presentation by US Immigration Fund. |
| The EB-5 program is popular with Chinese nationals with $500,000 or more to invest in US development projects. In 2014, the most recent year for which records are available, the US issued 10,692 of these visas – 85% to people from China, according to the Department of Homeland Security. | The EB-5 program is popular with Chinese nationals with $500,000 or more to invest in US development projects. In 2014, the most recent year for which records are available, the US issued 10,692 of these visas – 85% to people from China, according to the Department of Homeland Security. |
| But Trump Bay could soon become a focal point not only of efforts to reform EB-5 but also of the incoming Trump administration’s unresolved family business conflicts. | But Trump Bay could soon become a focal point not only of efforts to reform EB-5 but also of the incoming Trump administration’s unresolved family business conflicts. |
| “EB-5 is an extremely complicated, corruption-prone way to bring foreign investment into the US,” says David North, a Fellow of the Center for Immigration Studies, “and in this case it is part and parcel of the conflict of interest issues that are flying around the incoming administration.” | “EB-5 is an extremely complicated, corruption-prone way to bring foreign investment into the US,” says David North, a Fellow of the Center for Immigration Studies, “and in this case it is part and parcel of the conflict of interest issues that are flying around the incoming administration.” |
| North estimates that more than 60% of all EB-5 investment in the US comes into Manhattan and surrounding areas while the majority of applications originate in China. | North estimates that more than 60% of all EB-5 investment in the US comes into Manhattan and surrounding areas while the majority of applications originate in China. |
| In recent months, the EB-5 program has been the subject of bipartisan criticism in Washington, with opponents including Senator Dianne Feinstein, Democrat of California, vowing to end the system when it comes up for renewal in Congress this month. | In recent months, the EB-5 program has been the subject of bipartisan criticism in Washington, with opponents including Senator Dianne Feinstein, Democrat of California, vowing to end the system when it comes up for renewal in Congress this month. |
| On the Republican side, Senator Charles Grassley of Iowa, Chairman of the Senate Judiciary Committee, has described the program as “riddled with corruption and national security vulnerabilities”. | On the Republican side, Senator Charles Grassley of Iowa, Chairman of the Senate Judiciary Committee, has described the program as “riddled with corruption and national security vulnerabilities”. |
| In August a report issued by the Government Accountability Office said it could not be sure that the money used for EB-5 was not coming from “the drug trade, human trafficking or other criminal activities”. | In August a report issued by the Government Accountability Office said it could not be sure that the money used for EB-5 was not coming from “the drug trade, human trafficking or other criminal activities”. |
| Critics of the system say not only is the $500,000 investment threshold too low but the funds the program raises frequently go toward luxury developments in New York or Miami and not, as originally stipulated, to disadvantaged areas as the scheme originally intended. | Critics of the system say not only is the $500,000 investment threshold too low but the funds the program raises frequently go toward luxury developments in New York or Miami and not, as originally stipulated, to disadvantaged areas as the scheme originally intended. |
| A New York University study found that EB-5 investment was largely financing luxury developments, including a Chinese-style casino in Las Vegas, a Waldorf Astoria hotel in Beverly Hills and the redevelopment of the Hudson rail yards in Manhattan. | A New York University study found that EB-5 investment was largely financing luxury developments, including a Chinese-style casino in Las Vegas, a Waldorf Astoria hotel in Beverly Hills and the redevelopment of the Hudson rail yards in Manhattan. |
| “It’s hard for smaller states and cities to compete with the glitzy hotels and luxurious condo projects,” Grassley argued at a congressional hearing. | “It’s hard for smaller states and cities to compete with the glitzy hotels and luxurious condo projects,” Grassley argued at a congressional hearing. |
| But supporters, including the Democrats’ incoming Senate minority leader Chuck Schumer, who represents New York, claim EB-5 has pumped almost $9bn into the economy and created more than 35,000 jobs since it was created in 1990. | But supporters, including the Democrats’ incoming Senate minority leader Chuck Schumer, who represents New York, claim EB-5 has pumped almost $9bn into the economy and created more than 35,000 jobs since it was created in 1990. |
| The future of the EB-5 program could now be colored by Donald Trump’s campaign promises to crackdown on immigration. | The future of the EB-5 program could now be colored by Donald Trump’s campaign promises to crackdown on immigration. |
| In September, Congress passed a resolution keeping the program alive to 9 December. Legislators will now have to agree on a reform for the program or let it expire. | In September, Congress passed a resolution keeping the program alive to 9 December. Legislators will now have to agree on a reform for the program or let it expire. |
| But some believe Trump will not simply back maintaining EB-5 but expanding it. | But some believe Trump will not simply back maintaining EB-5 but expanding it. |
| “His strong stance is against illegal immigration,” said former New York governor George Pataki at a forum in Shanghai soon after Trump’s election in November. “And EB-5 is a legal immigration program. He understands the need for capital, the need for investment.” | “His strong stance is against illegal immigration,” said former New York governor George Pataki at a forum in Shanghai soon after Trump’s election in November. “And EB-5 is a legal immigration program. He understands the need for capital, the need for investment.” |
| With Congress being lobbied to extend EB-5 indefinitely, one of the options open to the president-elect could be to back raising the investment bar and introducing reforms that ensure investment capital flows to disadvantaged areas at the expense of New York or other wealthy areas. | With Congress being lobbied to extend EB-5 indefinitely, one of the options open to the president-elect could be to back raising the investment bar and introducing reforms that ensure investment capital flows to disadvantaged areas at the expense of New York or other wealthy areas. |
| But North, for one, was not holding his breath for that. | But North, for one, was not holding his breath for that. |
| “The way the program works now is as an asset transfer program for rich Chinese investors to line the pockets of rich New York developers. The administration could make the program less useful to the rich of New York and more useful for the rest of us. They’re unlikely to do that.” | “The way the program works now is as an asset transfer program for rich Chinese investors to line the pockets of rich New York developers. The administration could make the program less useful to the rich of New York and more useful for the rest of us. They’re unlikely to do that.” |