Some of Pat Leahy’s ideas kinda suck

He's had better days.

He’s had better days.

Two of Senator Leahy’s signature initiatives have been in the news lately, and the attention hasn’t exactly been flattering to the quality of our senior solon’s ideas. One is the EB-5 program, which allows wealthy foreigners to buy green cards by investing in job-creating projects; the other is a Homeland Security funding formula that ensures a piece of the pie for small states.

Let’s do the latter first. Late last month, Leahy’s office issued two press releases touting either $6.7 million (July 28) or $6.8 million (July 25) in Homeland Security Preparedness Grants, take your pick. But hey, what’s $100,000 when you’re getting it from Uncle Sam’s sofa cushions?

Both releases brag about Leahy’s role in creating “a formula… that protects smaller states like Vermont” and expands on the point:

Leahy has long championed all-state minimum funding formulas for homeland security grants to ensure that smaller, rural states like Vermont are included and supported by federal resources to thwart and deal with terrorism. Since 2001, Leahy’s all-state minimum has brought Vermont more than $115 million in federal funding to help first responders upgrade equipment, modernize radio systems and offer new training opportunities.

I remember the Congressional debate over this formula. At the time, many thought it was a bad idea. And even though Vermont has benefited, I question its wisdom.

Three points:

— It seems fundamentally misguided. Shouldn’t we be spending Homeland Security money where the risks are greatest, instead of doling it out (and hence diluting its effect) through a formula that has nothing to do with national security?

— The formula creates a universal constituency for Homeland Security budgets. Everybody benefits, nobody wants to stop the money train. It’s hard enough to bring rationality to bear on an issue as fraught as Defending the Homeland without the heady scent of pork turning everyone’s heads.

— A lot of that money has gone to questionable up-armoring of law enforcement agencies that don’t need advanced weaponry, tactical vehicles, and such. And you know what they say: give a man a hammer (or a Hummer) and everything looks like a nail. If you’ve got an eight-ton Lenco Bearcat in your garage, you’ll want to try it out once in a while. If you’ve got riot gear in your locker, you don’t want it gathering dust, do you? Especially when you feel so manly when you’re wearing all that stuff.

The formula is a victory for a small-state Senator with lots of seniority. But is it a wise investment of public funds? I really don’t think so.

Which brings us to the other item, EB-5. The troubles of Bill Stenger’s cornucopia of Northeast Kingdom developments are well-documented, including the recent news of a federal review. Now, Seven Days’ Paul Heintz writes that the feds are looking into dozens of EB-5 projects nationwide. The Government Accountability Office says EB-5 is “uniquely vulnerable to fraud” and that federal regulators have failed to develop ways to effectively oversee EB-5 investments.

As of May 2015, the Securities and Exchange Commission and other federal law enforcement agencies had 59 open investigations relating to EB-5 projects, 35 of which “primarily involved securities fraud issues,” according to the report.

… In its report, the GAO raises concerns about the U.S. Citizenship and Immigration Services’ ability to keep up with “constantly evolving” schemes to defraud investors. …The GAO also questions USCIS’ methodology for tracking the number of jobs created through the program.

In concept, EB-5 is a creative way to funnel investment money into projects that would have trouble attracting investors without the added inducement of a green card. But the program has always struck me as just a little bit fishy. You’re kind of asking for trouble when you commingle money and immigration, aren’t you? And then you add the fact that those wealthy foreigners have to give up many of the legal protections normally offered to investors, and you seem to be holding the door open to fraudsters.

To his credit, Leahy is co-sponsoring an EB-5 reform bill that could fix some of the worst abuses. But if the program is foundationally flawed, is it something we really ought to keep doing?

Pat Leahy’s done a lot of good stuff for the country and for Vermont. But, notwithstanding Peter Freyne’s designation of him as “St. Patrick,” well, nobody’s perfect.

Advertisements

2 thoughts on “Some of Pat Leahy’s ideas kinda suck

  1. Ken Horseman

    As a now retired specialist in Vermont’s Department of Economic Development i worked closely with the Vermont Regional Center. EB-5 has brought hundreds of millions of dollars of foreign investment to Vermont, and the solid oversight of the Vermont projects has held approved projects to the letter of the law in Vermont. Unfortunately that has not been the case around the country. One might not like the concept of EB-5, but that foreign investment is going to go somewhere — and I prefer to see Vermont receive that investment over some other state or country. Now that the Vermont Department of Financial Regulation does all of the financial oversight, Vermont is a model for the nation. If there is an EB-5 program, Vermont should get its share of investments that create badly needed jobs.

    Reply
  2. Fred Woogmaster

    At one time the seniority “system” was a good thing, providing balance. That system now furthers the rampant corruption of the American political system. Although Mr. Leahy has “brought home the bacon”, he has contributed immensely to the fattening of the pig. Hopefully, his days in office are numbered. He has served Vermont well – with distinction. It is time for new energy.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s