Thursday, December 17, 2015

Moving Forward in EB-5 Reform

(Source: Jeff Campion, Pathways EB-5) So here we are.  We are expecting an extension of the EB-5 Regional Center Program until 9.30.16 once the Omnibus bill passes.  Now the real work begins.  But before moving forward, it is helpful to understand what took place and how we got here.  Context frames this dialogue moving forward. 

I have heard that it said that if you don’t make your voice known, you are to blame.  If that is the case, many of us are to blame – RCs, migration agents, intermediaries, developers, attorneys, and other professional service providers.  Initially the legislation that was on the table was introduced by Senate Judiciary Chairman Chuck Grassley (R-IA) and Senate Judiciary Committee Ranking Member Patrick Leahy in June 2015.  The initial draft was then revised (somewhat) due to comments from both EB-5IC and IIUSA.  A new draft was provided in November 2015. 

IIUSA put forth a “compromise” position and asked its members to vote.  A very small percentage of its members voted -- 24 % (121 out of 510).  I voted “no.”  After its vote, IIUSA informed members of Congress that the industry had a compromise. 

I believed that there was no such compromise from the industry I knew.  Moreover, EB-5IC’s Board and Steering Committee did not believe that the changes suggested in the draft bill adequately balanced reforms that are necessary with the practical business of EB-5.  Reforms are needed, but there must be time for open comment and analysis on the impact of changes prior to reforms.  Otherwise, the reforms could accidentally hurt the very stakeholders they were meant to protect. 

Many of the industry leaders met the week before Thanksgiving with the hope of reaching a consensus position on five (5) major reform points, which verbally was reached.  And, while a letter was drafted that reflected such consensus, it was not signed.  Shortly thereafter, on December 2, 2015 a revised draft of the legislation was sent out.  The draft legislation still was not workable. EB-5IC, IIUSA, the Chamber of Commerce, and the Real Estate Roundtable were asked to meet with staff members to review the latest draft, which they did from Friday through the weekend and lasting until Monday.   EB-5IC continued to suggest changes to the legislation that would make it workable.  Thereafter, there was another iteration on December 7th.  This iteration was not workable for business.  

The EB-5IC board convened the week of December 8 to further discuss the proposals, strategies for the benefit of the industry, unintended consequences of the proposals, and their practical business effects on membership, and the communities they serve in the entire United States.   In addition, I flew to Washington D.C. to meet (with Jeff Carmichael) many of the Chiefs of Staff and Chief Counsel of members of the Senate Judiciary and the House.  These meetings were invaluable.  We were able to explain how the provisions needed improvement to make the bill workable. At the same time, Laura Reiff was also meeting with other key members of Congress.  Industry always wanted a four (4) or five (5) year bill that balanced the interests of legislators and business.  In the end, there simply was not enough time to make all the changes necessary. 

Our champions – Senators Cornyn, Flake, and Schumer and Congressman Pete Sessions – refused to give up.  They refused to allow us to have a bill that would have unintended consequences.  I applaud their resolve.  Please thank them through an email or a phone call because without them, there would be no extension. 

How do we move forward?  We begin by accepting responsibility.  As I started out, many of us are to blame.  Many of us waited far too long to make our voices heard.  No more.  Do not wait to have your voices heard.  Ten (10) months is a very short period of time.  If you want to protect your interests, you must speak up.  There are several ways to have your voices heard.

If you are a member of EB-5IC, you can let the Board of Directors know your position.  If you are not, you can become a member.  If you don’t want to join an organization, you don’t have to.  You can travel to D.C. and meet with Senators and members of Congress and express your concerns.  If you can’t travel, you can write emails or letters.  If you don’t want to write you can call.  Now is the time to unite and be heard.  But, if you do nothing, you are to blame.       

No comments: