President Trump’s personal lawyer collected a referral fee for helping block a crucial reform of America’s broken immigration system that lets the top 1% of wealthy emigrants buy green cards that come with a path to citizenship.
The Kushner family has been an especially frequent, high-profile user of EB-5 visa based financing, which is also known as the “Golden Ticket” visa.
Michael Cohen referred his client U.S. Immigration Fund (USIF) – which is run by a convicted felon with a tangled past – to former employer Squire Patton Boggs, which perpetrated a mysterious but effective campaign to block legislation that would reform the corrupt EB-5 visa program, which is sometimes refered to as the “crack cocaine of real estate financing.”
A Republican Senator was actually trying to fix the “Golden Ticket” program’s unintended loopholes, which are hurting housing affordability in America’s largest cities. But Trump’s personal lawyer took a handsome fee to kill the reform effort, and to protect his client’s $700 million New York real estate deal pipeline, which is worth $35 million in USIF commissions. The AP reports:
When Nicholas Mastroianni II hooked up with Cohen last year, his business was threatened by a looming regulatory crackdown on the federal EB-5 program…
Cohen put Mastroianni in touch with a lobbying firm that was paying him for referrals. And although it’s not clear exactly what the firm did, the proposed crackdown on the visa program collapsed and Mastroianni’s business — U.S. Immigration Fund — is now set to pocket tens of millions in fees for acting as a visa broker in a string of ongoing projects.
Michael Cohen’s client, USIF, is a Florida immigration law firm but really acts more like a bank whose source of funds is strictly the sale of immigration rights.
Their business model is to broker Golden Ticket visas to international buyers who purchase an expedited five-year path to citizenship, in exchange for that big commission on investments that yield below-market returns.
USIF runs a shady scheme common among Wall Street firms by pooling large groups of wealthy immigrants buying who are buying EB-5 visas, each of whom invests $500,000 in a large US business or real estate deal.
For example, Jared Kushner used Golden Ticket financing from USIF only a few years ago, and he still has a personal ownership stake in the Trump Bay Place development in New Jersey, which used $50 million in Chinese cash to erect a 50-story tower.
The Kushner family and USIF even got caught marketing the Golden Ticket program and their White House ties last March in China, before hiring Cohen.
Congress targeted the program at areas which have 150% of the typical unemployment rate to try to prevent Golden Ticket investors – who are buying citizenship – from crowding out other market-based projects.
But a loophole has become so corrupt that even a Republican Senator wanted to end the Golden Ticket’s real estate gerrymandering practices, which let real estate developers focus EB-5 financing in affluent areas, according to the AP:
Companies raising money in upscale neighborhoods are allowed under the law to engage in a bit of gerrymandering, and so they’ve been creating odd-shaped maps that string together census tracts with low unemployment where they intend to build with other tracts with much higher rates.
Senator Chuck Grassley (R-IA) took the Senate floor recently to propose ridding the program of middlemen and their gerrymandering entirely, calling that part of it “too corrupted to be saved.”
Tragically, the overuse of EB-5 funds in affluent neighborhoods is a significant driver of housing shortages as the developers over-build in the luxury market – for example in Miami – but won’t invest in the more impoverished areas where affordable housing is needed.
The President’s personal lawyers clients were not the only interested party lobbying Congress to keep the loophole open, but Senator Grassley specifically told the AP the measure died because of “big-moneyed New York City real-estate interests.”
Just compare the EB-5 visa buyer’s clear path to citizenship with the disturbing tale of a pizza delivery man who is the sole breadwinner for his American family, but facing deportation for bringing pasta to a New York army base. (They ate the pasta.)
The US immigration system is riddled with iniquities, but the most unfair part is that it completely tilts the playing field in favor of rich foreign nationals in the business of being owners over the kind of hard-working immigrants who’ve come to America for generations looking to work for a better life.
Now, Michael Cohen’s clients USIF just got an enormous free pass to make big bucks as middlemen to literally sell American citizenship on the international market and to pour the cash into luxury high rises, while working Americans struggle to find affordable housing in major cities.