Sen. Chuck Grassley Denounces ‘EB-5’ Giveaway to China Hidden in India Outsourcing Bill

WASHINGTON, DC - SEPTEMBER 04: Committee Chariman Sen. Chuck Grassley (R-IA) speaks as Sup
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Iowa Sen. Chuck Grassley is throwing a flag on the stealth push by technology investors to expand the unregulated U.S.-India outsourcing economy.

The business-backed bill to expand the binational outsourcing economy, titled HR.1044, quadruples the supply of valuable green cards to Indian workers who agree to take college-level jobs from American graduates. On July 10, it passed the House, 365 to 65. The Senate version has yet to be approved by the Senate Judiciary Committee.

But the Indian outsourcing was packaged with language that allows real estate investors to get a fast track for the annual delivery of almost 10,000 EB-5 green cards to lenders from China, Indian, and other countries.

Grassley’s office told Breitbart News he opposes the House’s EB-5 language because it does not include any reforms for the controversial EB-5 program: “Senator Grassley won’t support any version of the legislation that allows the EB-5 industry to continue to recruit new investors, especially without addressing the rampant fraud, abuse, and national security vulnerabilities in the program.”

The Senate bill, S.386, includes similar EB-5 language.

Grassley’s opposition is a significant factor in the clubby GOP caucus, not least because he has held up the green card giveaway bill for ten years. His opposition to the House’s EB-5 language — as well as the many other problems in the HR.1044 outsourcing push — may persuade Majority Leader Mitch McConnel and other GOP senators to stop the S.386 bill from getting a vote in committee or on the Senate floor.

Early this year, Grassley lifted his decade-long opposition to an earlier Senate version of the bill. Grassley raised his opposition after Utah GOP Sen. Mike Lee agreed to include some minor reforms of the H-1B outsourcing program, which keeps at least 900,000 lower-wage foreign workers in U.S. white-collar jobs.

The Senate bill, S.386, is being pushed by Lee and Sen. Lindsey Graham, the chairman of the Senate Judiciary Committee.

Grassley is also touting the White House’s long-delayed regulatory reform of the EB-5 citizenship-selling program. The Office of Management and Budget approved the regulation in late June, but it has been delayed at the last moment as it awaits final approval from White House officials.

On July 1, Grassley tweeted his frustration about the White House’s delay to the EB-5 reforms:

He tweeted, “BIG progress by @realDonaldTrump + admin 2bring real reforms &accountability to flawed eb5 investor visa program New regs cleared by OMB wld bring needed integrity 2program scarred by abuse +natl security problems NEED TO PUBLISH NOW!”:

He also argued that the program has been gamed by the EB-5 industry to redirect the foreign loans away from less-developed Heartland regions towards many high-developed coastal sites, such as New York. Grassley tweeted:

eb5 program was designed 2help create jobs in rural/struggling parts of US but its been hijacked by BIG $$$ INTERESTS 2fund extravagant projects in wealthy cities NOT WHAT CONGRESS INTENDED Trump admin taking important steps 2 restore purpose of prgm

The pending White House regulation is intended to shift more of the EB-5 money away from coastal projects over to Heartland projects, for example, from affluent New York City to underdeveloped Ohio neighborhoods.

Under existing rules, developers in New York, Dallas, and Silicon Valley may get a larger share of the EB-5 funds by claiming their projects will serve underdeveloped zones in large cities. The developers justify their claims by creating a custom-designed “Targeted Employment Area,” which includes the development site and nearby underdeveloped sites.

“A lot of the developers are gerrymandering these target areas, these underserved areas, so they can build a Manhattan skyrise. … That siphons money from rural and underdeveloped areas,” a source told Breitbart News.

Also, Grassley has argued that the EB-5 program is plagued by corruption and is being used by Chinese groups to undermine U.S. security.

for yrs ive led bipartisan fight 2fix disastrous eb5 prgrm 2address rampant fraud+abuse but US Chamber+ big $$ groups want 2keep status quo of syphoning $ from areas that need it most ENOUGH IS ENOUGH @realDonaldTrump can notch another big win 4rural US like iowa w eb5 regs

U.S. investors like the EB-5 program because it allows them to get low-interest loans from foreign people, who get their money back — and a green card — years later.

The EB-5 program is stalling because the caps on Chinese receipts of EB-5 ensure that the next Chinese buyers must wait perhaps 20 years to get their green cards. This delay makes it difficult for real estate investors to sell green cards to the next wave of potential Chinese lenders. The current caps are also threatening to hurt the sale of green cards to the new waves of Indian and Vietnamese customers.

If the law passes, all EB-5 lenders would be placed in the same line for green cards. That would shorten the wait time for existing Chinese lenders, would set a standard global delay for all future lenders that would ease sales to prospective Chinese lenders.

However, any delay is risky for lenders because commonplace disruptions in the real estate sector can push the lenders out of the program and wipe out their loan, according to reports in an expert blog on the EB-5 program,

Lobbyists persuaded the House leader of the HR.1044 bill, Democratic Rep. Zoe Lofgren, to remove the country caps from the House EB-5 bill. Lofgren represents a district in Silicon Valley:

But the country caps are also causing a problem for Silicon Valley investors who are using green cards to rewards the Indian graduates who take U.S. jobs — at low wages — from American graduates.

American and Indian companies have nominated so many imported Indian workers for the annual supply of 120,000 green cards that the backlog has grown to 300,000 Indian workers and 3000,000 Indian family members. This backlog deters other Indians from agreeing to work for low wages in the United States, via the various uncapped H-1B, OPT, L-1, and other work permit programs.

The various work permit programs employ roughly 1.5 million white-collar workers in the United States, as well as about 300,000 Indian workers who have gotten green cards in the last ten years. That huge population is twice as large as the 800,000 young Americans who graduate each year from colleges with skilled degrees in health care, business, engineering, science, math, or computers:

On July 18, Breitbart News reported:

Tech billionaires and Silicon Valley investors are trying to snatch a valuable prize from President Donald Trump’s hand before he can win pro-American immigration reforms in 2021.

The prize is the removal of “country caps” on the award of green cards to company-picked foreign workers — and it is likely worth tens of billions of dollars to investors.

Follow the Money

Each year, the government provides green cards to 120,000 foregin college-graduate workers nominated by companies.

Silicon Valley and U.S. investors uses this giveaway to recruit and motivate a resident domestic army of at least 8o0,000 low-wage foreign workers — plus roughly perhaps 550,000 foreign spouses and children —  who are imported to the United States via the H-1B visa program.

Roughly 500,000 of these H-1B foreign graduates are using three-year work permits to work in a very wide variety of promising jobs. But the companies have boosted the resident workforce by nominating 300,000 additional H-1B workers for green cards, so allowing them to stay once they reach the apparent six-year limit in the H-1B program.

Most of these imported workers are Indians because U.S. companies have gradually created a bi-national outsourcing economy with Indian companies and the Indian government.

This little-recognized joint outsourcing economy is huge — and is very beneficial to the Indian government and to Wall Street investors — precisely because it has forced down wages for many U.S. professionals, and especially for American software experts.

It is good for business, in part, because U.S. workplace rules are rarely enforced in Indian-dominated workplaces throughout the United States, many U.S graduates and Indian workers tell Breitbart News. Qualified American applicants from prestige universities who seeking jobs in major U.S. companies are routinely passed over while Indian recruitersand Indian managers trade stolen resumesfake interviewsunder-the-table payments, and job offers with underqualified Indians from favored caste or regional groups — in the United States and in India, the Indians and American workers say.

The H-1B outsourcing industry also concentrates U.S. economic growth in a few states and cities, and prevents heartland states and smaller cities from using their local graduates to attract new investment from the investors living in major cities in California, New York, or Texas. For example, few technology jobs are created in Kentucky or Indiana partly because California investors can easily hire just-arrived Indian “students” for jobs in nearby Silicon Valley. Similarly, many of the H-1B jobs in Rep. Ken Buck’s 2nd Colorado district are in the Boulder suburbs, not in the smaller towns throughout the rest of his district.

A key feature of this outsourcing economy is the existence of a hidden yet huge U.S. government subsidy — the promise of government-provided green cards to compliant foreign workers.

U.S. and Indian companies dangle this valuable prize before their Indian employees to ensure they work long hours at for low-wages for many years — and also quietly endure Indian-style working conditions without changing jobs.

But this size of this subsidized outsourcing economy is compressed by little-understood “country caps” in U.S immigration law.

The “country caps” limit the award of green cards to people from each country to just 7 percent of the 120,000 green cards delivered by companies each year. The goal is to diversify the award of green-cards to people around the world. In practice, complex rulesmean that Indian workers and their families get about 23,000 green cards each year. or roughly 20 percent of the cards.

U.S. and Indian companies have ignored those country caps as they competed to recruit and expand their Indian workforces with excessive promises of green cards.

Since 2010, these companies and Indian workers have jointly created a huge backlog of roughly 300,000 workers and 300,000 family members. The backlog is so huge that an Indian worker nominated for a green card today may have to wait more than five, 15 or even 150 years, depending on their category. Before the companies created this backlog, Indians could get their green cards in a few years. In June 2019, for example, the government provided green cards to Indians who were nominated in 2015 or 2009.

The growing backlog is bad for the U.S.-India outsourcing economy because fewer Indians are willing to take the low-wage U.S. jobs if they can not also get green cards.

The pending legislation would remove the country caps and so allow companies to quadruple the supply of green cards to Indians in the outsourcing economy.

The extra green cards would supercharge the outsourcing economy partly because there are no U.S. limits whatsoever — in any way, shape or form – on the number of Indians who are allowed to take college-level jobs throughout the United States.


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