Kushner Family Tells Rich Chinese: Invest $500,000 and Immigrate to the United States

By EconMatters

I was debating whether to put this post on our sister site Asia Pop Culture, but decided EconMatters.com seems a more appropriate place.  

Washington Post journalists attended the last Saturday presentation at the Ritz-Carlton Hotel in Beijing saw and heard the pitch to the rich Chinese -- They could obtain EB-5 investor visas to the U.S. if they invested at least $500,000 into one of the Kushner family’s development projects.

The presentation was reportedly delivered by Nicole Kushner Meyer, sister of Jared Kushner. As you know, Jared Kushner is the presidential adviser and son-in-law, husband of Ivana Trump.

Now what is EB-5 visa exactly? Wikipedia explains that the EB-5 visa provides a method of obtaining a green card for foreign nationals who can invest from $500,000 to one million dollars in a "new commercial enterprise" in the United States. The program has been criticized as akin to “U.S. citizenship for sale,” and it has come under scrutiny after a series of fraud and scandals.

According to the Post, the tagline on a brochure for the event:

“Invest $500,000 and immigrate to the United States.”

The New York Times reported that during the presentation, there was a slide describing Donald Trump as a "key decision maker" about the future of the EB-5 program.  So the potential investors were then 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.

A slide displaying President Trump as the key decision maker in the EB-5 program (graphic source: New York Times)

The highlight of the event was Meyer, a principal for the company, who was described in promotional materials as Jared Kushner"s sister.  Meyer told the audience of about 100 wealthy Chinese investors that the project "means a lot to me and my entire family."

The Post said it well in a nutshell:

".....the session Saturday demonstrated that the [Kushner] company is perceived as enjoying close ties to the Trump administration. Ethics laws prohibit government officials from profiting personally from their public-sector work."

Can this be any more obvious a ploy to cash in and take advantage of the Kushner family new proximity to power?

I"m not a legal and ethics expert....  But since Jared Kushner has indicated that he has divested from the family business, the loophole of the so-called Ethics Law could be that Jared"s sister is not exactly a "government official"?  So if the sister"s company benefits, it will not be on Jared?  I"m pretty sure the money will eventually find Jared.....

Anyway, I guess we will wait to see how the spin doctors will find a way out of this "incredibly stupid and highly inappropriate" mess as described by Richard Painter, the former chief White House ethics lawyer in President George W. Bush’s administration.  Well that is how the rich gets richer, and ........  

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Chinese Elites Scramble To Apply For US 'Golden Ticket' Visa

As members of Congress in Washington debate raising the minimum required to obtain a U.S. immigrant investor visa from $500,000 to $1.35 million, Bloomberg reports concern about the hike has set off a scramble among wealthy would-be participants in China.

China’s wealthy, using not-always-legal means to skirt capital controls to get their money out and at the same time gain residency in the U.S., are continuing to dwarf all others as the largest participants in the EB-5 program, despite heightened measures by the Chinese government.

Chinese investors, several thousand a year, have made up as much as 85 percent of the annual EB-5 investor total, according to U.S. data provided by Rosen Consulting and the Asia Society. In 2015, China overtook Canada as the biggest foreign buyer of U.S. homes.

Because Chinese individuals are limited to exchanging $50,000 worth of yuan a year, a 10th of what the EB-5 program requires, Bloomberg reports that some agents are advising clients who don’t already have assets offshore to use a means nicknamed "smurfing" to move their money.

"Our suggestion to the client is to open three to four personal accounts in the U.S. or line up three to four friends’ accounts, so they can split the money and wire it to different personal accounts without being put on a blacklist by the Chinese authorities," said a Shanghai-based real estate agent who gave the surname Dong.

"It may require a trip to the States to do so to facilitate the process."

While the government in Beijing spent much of 2016 working to stop its citizens sending money abroad in order to stabilize its declining currency and foreign reserves, Chinese investors’ use of EB-5 continued anyway, totaling $3.8 billion in the fiscal year that ended Sept. 30, according to data from the U.S. State Department.

EB-5 started decades ago as a way to create jobs in needy U.S. neighborhoods by attracting foreign investment. But it has run into political opposition amid charges the program is benefiting billionaire developers and being dominated by wealthy Chinese.

"EB-5 has been a key program for capital flight that has been abused by Americans and Chinese people seeking to game the system," said Andrew Collier, an independent analyst in Hong Kong and former president of Bank of China International USA.

While there’s no suggestion of wrongdoing by developers that receive funding from EB-5 (including the family of Jared Kushner, President Donald Trump’s son-in-law and senior adviser, who is seeking $850 million in EB-5 fundingrefinance and reconstruct its New York office building at 666 Fifth Avenue), a series of Securities and Exchange Commission cases against EB-5-linked immigrant investor centers led the U.S. Citizenship and Immigration Services to announce last week that they would audit the centers amid concern about fraud.

Changes to the EB-5 minimum would affect property developers who rely on the program as a funding channel, said Michael Shaoul, chief executive officer at Marketfield Asset Management in New York.

"Any interruption of the program or reduction in Chinese participation would have a meaningful effect on a development cycle that is already showing signs of strain in certain key U.S. cities," he said by email.