Why a Trump-Based Tower Is Being Funded By Chinese
New Jersey building partly funded via controversial visa plan
Video to sell it to investors is subtitled in Chinese
Throughout his presidential campaign, Donald Trump has attacked China and warned about the dangers of deficient immigrant screening.
“They’ve taken our jobs, they’ve taken our money, they’ve taken everything,” he said of China in a speech late last month. He has called for a revamping, even a freezing, of the immigration system, but says he would make an exception for the highly skilled.
Yet no skills are required of the wealthy Chinese being courted by a Chinese-subtitled video to help finance a huge Trump-branded tower in New Jersey. The video leads viewers behind the wheel of a car into Jersey City with scenes of the tower, all to the tune of the theme song from The Sopranos, “Woke Up This Morning.”
The video was produced to help raise tens of millions of dollars through a controversial government program that offers expedited visas to foreign investors overwhelmingly from China. While the program has many supporters who argue it attracts foreign capital and creates jobs at no U.S. taxpayer cost, congressional overseers and Homeland Security have raised sharp concerns. Applicants are sometimes cleared in less than a month and the critics say the government is essentially selling visas to wealthy foreigners with no proven skills, paving the way for money laundering and compromising national security.
Outdoor Pool, Indoor Golf
Trump Bay Street is a 50-story luxury rental apartment building being built by Kushner Companies, whose chief executive officer, Jared Kushner, is married to Trump’s daughter Ivanka. It will have an outdoor pool, indoor golf simulator and sweeping views of Lower Manhattan; it adjoins an existing high rise condo, Trump Plaza Residence. The firm that was hired to seek investors, US Immigration Fund, is run by Florida developer Nicholas Mastroianni, who announced a partnership last year with a Trump golf course in Jupiter, Florida.
The visa program is known as EB-5. In exchange for investing at least $500,000 in a project promising to create jobs, foreigners receive a two-year visa with a good chance of obtaining permanent residency for them and their families. In 2014, the most recent year for which records are available, the U.S. issued 10,692 of these visas — 85% to people from China.
The Jersey City project has raised $50 million, about a quarter of its funding, from loans obtained through EB-5, according to a slide presentation by US Immigration Fund. Mark Giresi, general counsel of US Immigration Fund, said he believed nearly all of the EB-5 investors in the Trump project were from China.
Asked for a comment for this article, a Trump spokeswoman said by email, “This was a highly successful license deal but he is not a partner in the financing of the development.” She did not respond to questions about EB-5. A Kushner spokeswoman said the project was entirely legal and creating jobs.
Verifying Source of Funds
The Government Accountability Office, the investigative branch of Congress, found last year in a general report about the EB-5 program that many applications contained a high risk of fraud, and discovered cases of counterfeit documentation. State Department officials told the GAO that there is “no reliable method to verify the source of the funds of petitioners.”
Giresi of US Immigration Fund says his firm uses “very stringent compliance programs” with a “great amount of due diligence” to look into the background of prospective investors, including hiring private investigators.
Senator Charles Grassley, a Republican who is chairman of the judiciary committee, last month cited a memo from Homeland Security saying that EB-5 visa holders do not clear the same hurdles as other immigrants, like proof of education and work qualifications. Senator Patrick Leahy, a Vermont Democrat, said at the hearing that while he has supported EB-5 over the years, “If the program is to continue, it must be reformed.”
Last spring, a Homeland Security special agent testified that EB-5 applicants from China, Russia, Pakistan and Malaysia “had been approved in as little as 16 days, with files lacking basic law enforcement queries.” And a report last year by the Department of Homeland Security Inspector General found politically connected participants may have received favorable treatment, citing projects involving Virginia Governor Terry McAuliffe and Hillary Clinton’s brother, Tony Rodham.
A spokesman for Governor McAuliffe said the report demonstrates that he, “along with many other bipartisan individuals and businesses,” asked Homeland Security “to fulfill its obligation to adjudicate the applications that were before them in a timely fashion.”
Rodham said in a phone interview that his interaction with Homeland Security was appropriate.
The visa program was intended to create jobs in economically distressed areas but has often turned into a source of financing for high-profile developments in prosperous neighborhoods, such as Brooklyn’s Barclays Center and Manhattan’s Hudson Yards. Audrey Singer, a Brookings fellow, says data collected through the program makes it impossible to track how many jobs get created.
Visas have become an issue in the Trump campaign although he hasn’t addressed the EB-5 program. He has acknowledged using temporary visas for workers at his Mar-a-Lago Club in Palm Beach, Florida. He says he wants to eliminate what he calls “rampant, widespread” abuse of temporary visas for skilled workers and is committed to “institute an absolute requirement to hire American workers first for every visa and immigration program.”
Trump himself has built few buildings in the past two decades. Instead, developers who want to use the name pay him a licensing fee. A Kushner spokeswoman, Risa Heller, declined to comment on the specific arrangement in Jersey City with Trump’s son-in-law. She said, “The money was raised lawfully by the US Immigration Fund consistent with all the requirements of EB-5. This program enabled a development that created hundreds of new jobs in an area with employment needs.”
Kushner Companies is a New Jersey-based real estate firm built by Kushner’s father Charles, a former rainmaker in New Jersey Democratic politics who pleaded guilty to a federal campaign finance violation, filing false tax returns as well as attempts to silence a witness. Charles was sentenced in 2005 to a prison term of two years. He remains active in the company. Jersey City is the first and, so far, only Trump project for the company.
The Trump building, barely a 5-minute train ride from Lower Manhattan, is located in Jersey City’s Powerhouse district, the site of numerous new high rises and other new construction and renovation. The pale yellow tower is expected to be completed this summer.
Before it’s here, it’s on the Bloomberg Terminal.