Trump Family Grifters-- No Apples Fall Far From The Orange

Back in 2014, Peter Elkins and Marty Jones, presaged many a scandal with a piece in Fortune, The dark, disturbing world of the visa-for-sale program. Scamming money out of this one was once the domain of two bit GOP governors; now it's front and center in the White House. Welcome to Trumpland-- Home of The Grifters. The EB-5 visa program is described as "one of the least explored of the many dark corners in America’s deeply troubled immigration process. Scientists and engineers highly coveted by technology companies may be getting thrown out of the country but rich businessmen-- overwhelmingly criminal businessmen-- who understand how to spread around the bribes... welcome, स्वागत हे, welcome, 歡迎, welcome, أهلا بك, welcome, добро пожаловать, welcome...

Increasingly, the skilled and the poor are out of luck. But the rich are another matter. The program (EB-5 is short-hand for the government’s fifth employment-based visa “preference”) allows well-heeled foreigners to leap to the front of the line by simply plunking down $500,000.

From the law’s inception in 1990, selling potential citizenship to the rich struck many as a corruption of American ideals. “Have we no self-respect as a nation?” asked Texas congressman John Bryant on the House floor that year. “Are we so broke we have to sell our birthright?”

But that powerful objection was overcome with an even more potent counterforce: The program would generate jobs where they’re needed most. Immigrants seeking EB-5 visas must invest their half-a-million dollars in a new business that creates 10 full-time U.S. jobs in a high-unemployment or rural district. (Technically, one can obtain an EB-5 visa for $1 million with no requirement that the jobs benefit a struggling area; in reality, few apply under that provision.)

...[B]ecause the EB-5 industry is virtually unregulated, it has become a magnet for amateurs, pipe-dreamers, and charlatans, who see it as an easy way to score funding for ventures that banks would never touch. They’ve been encouraged and enabled by an array of dodgy middlemen, eager to cash in on the gold rush. Meanwhile, perhaps because wealthy foreigners are the main potential victims, U.S. authorities have seemed inattentive to abuses.

And that brings us to the First Family of Grifters-- Trumpanzee's machatunim: Kushner-in-law and all his vile, insect-like, familial New Jersey garbage. These week they were hawking visas in Beijing.

Slide shown during Kushner event in Beijing identifying the father-in-law as the "key decision maker" on EB-5 investor visa program

The Kushner family came to the United States as refugees, worked hard and made it big-- and if you invest in Kushner properties, so can you.

That was the message delivered Saturday by White House senior adviser Jared Kushner’s sister to a ballroom full of wealthy Chinese investors, renewing questions about the Kushner family’s business ties to China.

Over several hours of slide shows and presentations, representatives from the Kushner family business urged Chinese citizens gathered at the Ritz-Carlton hotel to consider investing hundreds of thousands of dollars in a New Jersey real estate project to secure what’s known as an investor visa.

The EB-5 immigrant investor visa program, which allows foreign investors to invest in U.S. projects that create jobs and then apply to immigrate, has been used by both the Trump and Kushner family businesses.

But President Trump’s vow to crack down on immigration, as well as criticism from members of Congress, has led to questions about the future of a program known here as the “ golden visa.”

The EB-5 has been extremely popular among rich Chinese who are eager to get their families-- and their wealth-- out of the country, though the fact that some move their money out illegally has made the program unpopular with the Chinese government, too.

In the ballroom of the Ritz-Carlton on Saturday, Chinese investors were advised to invest sooner rather than later in case the rules change. “Invest early and you will invest under the old rules,” one speaker said.

The woman identified as “Jared’s sister” was believed to be Nicole Kushner, who is involved in the family business, not Dara Kushner, who generally stays out of the spotlight. But the woman’s face was not clearly visible from the back of the ballroom, where reporters were told to remain.

Saturday’s event in Beijing was hosted by the Chinese company Qiaowai, which connects U.S. companies with Chinese investors. The tagline on a brochure for the event: “Invest $500,000 and immigrate to the United States.”

Qiaowai is working with Kushner to secure funding for Kushner 1, a real estate project in New Jersey. Promotional materials tout the buildings’ proximity to Manhattan and note that the project will create more than 6,000 jobs.

“This project has stable funding, creates sufficient jobs and guarantees the safety of investors’ money,” one description reads.

Although there was no visible reference to Trump, the materials noted the Kushner family’s “celebrity” status. Wang Yun, a Chinese investor who attended the event, said the Kushner family’s ties to Trump, via son-in-law Jared, were a part of the project’s appeal-- but also a source of concern.

“Even though this is the project of the son-in-law’s family, of course it is still affiliated,” Wang.

Wang reasoned that the link to Trump would be a boon if the presidency goes well but could be disastrous if it does not: “We heard that there are rumors that he is the most likely to be impeached president in American history. That’s why I doubt this project.”

Many of the people who attended the event declined to be interviewed, citing privacy concerns, or they were blocked by organizers from speaking to the news media.

Indeed, though the event was publicly advertised in Beijing, the hosts were exceptionally anxious about the presence of reporters.

Journalists were initially seated at the back of the ballroom, but as the presentations got underway, a public relations representative asked The Post to leave, saying the presence of foreign reporters threatened the “stability” of the event.

At one point, organizers grabbed a reporter’s phone and backpack to try to force that person to leave. Later, as investors started leaving the ballroom, organizers physically surrounded attendees to stop them from giving interviews.

Asked why reporters were asked to leave, a public relations representative, who declined to identify herself, said simply, “This is not the story we want.”

China-- Danced With Wind And Danced With Fire

In June my friend Qiao Li explained the concept of China's Naked Officials for us:

"Naked officials" (裸体官员) are Chinese bureaucrats who send their family members overseas with the illegal assets they amassed through corruption and graft. These officials are “naked” as they are the only ones left behind, working hard to accumulate and funnel capitals overseas under the names of their relatives to popular destinations like the U.S., Canada and the U.K, investing their transferred funds in financial, real estate, energy, and other lucrative sectors. Banking on bribes to allow forced demolition, business deals, black jails, and news cover up, these “naked officials” not only use their wealth and power to sideline competing business interests, their immense economic clout obtained through official capacity also allows them to defeat other political factions within the party.

…The number of "naked officials" might be a small bunch, but they play an important role in the larger picture of global inequality. Since post-reform, Capitalism has become the new secular religion in China. While the government brutally cracks down on other popular religions and is fast to demolish Christian churches, no officials dare to criticize the wrongs done by unchecked Capitalism. The fleeing of these “naked officials” is a testament that China’s impressive growth will not sustain if inequality is left unaddressed.

The Wall Street Journal's Andrew Browne would have done well to take a look at Qiao Li's analysis of "naked officials" before his own piece on The Great Chinese Exodus this weekend. I'm sure many are leaving for "cleaner air, better schools and more opportunity," by corruption figures into the calculus her far more than Browne acknowledges. "A recent report," he wrote, "showed that 64% of China's rich are either migrating overseas or have plans to leave the country." And of the 100 million Chinese-- including tourists on vacation, of course ("the Chinese have overtaken Americans to become the world's biggest tourist spenders…The international hotel industry is increasingly tailoring its service to Chinese tastes")-- who left China last year, "rapidly growing numbers are college students and the wealthy, and many of them stay away for good. A survey by the Shanghai research firm Hurun Report shows that 64% of China's rich-- defined as those with assets of more than $1.6 million-- are either emigrating or planning to.

The decision to go is often a mix of push and pull. The elite are discovering that they can buy a comfortable lifestyle at surprisingly affordable prices in places such as California and the Australian Gold Coast, while no amount of money can purchase an escape in China from the immense problems afflicting its urban society: pollution, food safety, a broken education system. The new political era of President Xi Jinping, meanwhile, has created as much anxiety as hope.

Another aspect of this massive population outflow hasn't yet drawn much attention. Whatever their motives and wherever they go, those who depart will be shadowed by the organs of the Leninist state they've left behind. A sprawling bureaucracy-- the Overseas Chinese Affairs Office of the State Council-- exists to ensure that distance from the motherland doesn't dull their patriotism. Its goal is to safeguard loyalty to the Communist Party.

This often sets up an awkward dynamic between Chinese arrivals and the societies that take them in. While the newcomers try to fit in, Beijing makes every effort to use them in its campaign to project its political values, enhance its global image, harass its opponents and promote the use of standard Mandarin Chinese over the dialects spoken in Taiwan and Hong Kong.

…A college professor, who insisted on anonymity altogether ("Just call me an intellectual," he says), takes a darker view of China's prospects as he prepares to emigrate to the U.S., joining his two children, who both have postgraduate degrees from U.S. colleges.

Like many Chinese academics, the professor has a business or two on the side, although he hardly looks the part of an executive, unshaven and with crumpled pants riding 6 inches above his open sandals. In China, he pronounces, "Once you get rich, they arrest you."

That is an exaggeration, of course, but there is a propensity for entrepreneurs who appear on lists of the richest Chinese to end up in jail.

His real concern is that to get ahead, he's had to make compromises with his principles (he doesn't say bribes, but that is what he means). "I've been forced to prostitute myself," he says, and now he worries that it could all be snatched away. In China, a weak, corrupt legal system may sometimes work in favor of entrepreneurs while they're clawing their way up, cutting corners along the way, but it is almost always a liability once they've made it.

First-generation businessmen-- the ones who powered China's economic rise-- now dream of a secure retirement. That means legal safety in places like the U.S. and Canada.

…The flight of the rich recalls similar outflows from Hong Kong before the 1997 handover of the then-British colony to China and from Taiwan in an earlier period when its own future seemed imperiled. In those cases, businesspeople parked their families in places like Vancouver and Seattle and shuttled back and forth to Asia for business.

That is often the strategy in today's China, which has entered an uncertain transition. The economy is off the boil; property prices are sliding. Mr. Xi has amassed more power than any Chinese leader since Deng Xiaoping and is using it to crack down on corrupt officials while going after human rights lawyers, bloggers and civil society activists. That is ridding China of the kind of individual its government doesn't want but is also scaring away the creative types it needs.

Last year, the U.S. issued 6,895 visas to Chinese nationals under the EB-5 program, which allows foreigners to live in America if they invest a minimum of $500,000. South Koreans, the next largest group, got only 364 such visas. Canada this year closed down a similar program that had been swamped by Chinese demand.

Some of the wealth sluicing out of China is undoubtedly ill-gotten gains. The Chinese central bank estimates that corrupt officials may have siphoned off as much as $123 billion since the mid-1990s.

Still, he has more to say about "family holidays to destinations such as Kenya, Patagonia and Alaska at $10,000 per head" and how "Chinese are now the third-largest group of nationals landing in Antarctica, where tourists zip around the ice floes in Zodiac inflatables to watch penguins," than about the Naked Officials phenomena which is actually driving real economic dislocation in China-- not to mention another housing bubble America, especially on the West Coast, NYC, and Inside-the-Beltway. Earlier today, also in the Wall Street Journal Esther Fung repotted that (corrupt) Chinese officials are stampeding out of the luxury home market. Ostentation for public officials is supposedly out now.

"Officials are focused on selling their homes quickly, so they are willing to sell at 5% to 10% cheaper than the average prices of comparable homes," says Zhang Yan, a manager at Shanghai Centaline Property Consultants, who says he sells three to four homes to officials every quarter on average. Party members usually find a buyer within two weeks, he said, while most other sellers find buyers in about a month, waiting for a higher price.

…In one case late last year, an Inner Mongolia political leader named Wu Zhizhong was convicted of corruption, accepting bribes and embezzling public funds. Investigators said Mr. Wu owned 33 properties in China and one house in Canada. Xinhua, China's official news agency, said the keys to all of his homes could fill up an entire handbag.

Cai Bin, a former Guangzhou official dubbed "Uncle House" on social media, was also convicted last year for accepting bribes. Investigators said he and his family owned more than 20 homes.

Those cases, and others like them, have raised alarm bells among local government leaders.

…And it comes at a bad time for China's property market, which is facing a slump that many economists say poses the greatest risk to the country's economy. Housing sales in the first seven months this year fell 10.5%, according to official data issued last week.

According to real-estate agents, government officials make up as much as 20% of owners in the luxury housing market, and the agents say they simply aren't buying much anymore.

"A major way to corrupt an official is to give him a house as a gift," says Yan Jirong, a professor at the Peking University School of Government. "The anticorruption campaign is sending a signal" that such tactics should be stopped, he said.

Housing corruption is rampant in China. In June, the authorities in Guangxi Autonomous Region issued a statement warning civil servants "in possession of excess homes" to turn them in, though it left vague where and how to surrender such property.

…In a study from the University of Pennsylvania, economists found that Chinese government officials buy larger and more lavish homes than nonbureaucrats, despite earning typically 14% less in monthly income. Some officials also receive a price discount of nearly 4%, according to the study, which said that the size of the discount appears related to the power the official wields among local developers.

Bureaucrats in the study accounted for 7.1% of buyers-- a much higher percentage compared with the 0.86% proportion of bureaucrats in China's total population.

Many officials mask their homeownership by using the IDs of their chauffeurs, relatives or surrogate buyers, according to real-estate agents.

China's Naked Officials

-by Qiao Li

As a young, aspired citizen, I try to fulfill my share of "American dream" by working to become a homeowner in Pasadena, California. It didn’t take long for us to realize that our meager savings limited what we can buy, but what surprised me more was the number of "cash-offer" deals that out-bided us everywhere! How did we get accustomed to cash-only offers? And how could our housing market possibly be affected by corruption in China? The outsourcing of China’s "naked officials" might help to explain why.

"Naked officials" (裸体官员) are Chinese bureaucrats who send their family members overseas with the illegal assets they amassed through corruption and graft. These officials are “naked” as they are the only ones left behind, working hard to accumulate and funnel capitals overseas under the names of their relatives to popular destinations like the U.S., Canada and the U.K, investing their transferred funds in financial, real estate, energy, and other lucrative sectors. Banking on bribes to allow forced demolition, business deals, black jails, and news cover up, these “naked officials” not only use their wealth and power to sideline competing business interests, their immense economic clout obtained through official capacity also allows them to defeat other political factions within the party.

Like the outsourcing of jobs in America, "naked officials" are a growing threat to China’s outsourcing of wealth. According to a 2005 Ministry of Commerce report, between 1978-2003, 4,000 “naked officials” left China with $50 billion. From 2007 to 2012, on average, corrupted officials sent abroad 5 million yuan ($800,460) per person.

Perhaps one of the most famous cases was the fall of politburo member Bo Xilai-- a senior party official sentenced to life in prison for embezzlement and abuse of power. His wife, Gu Kailai, was given a suspended death sentence for poisoning her British business collaborator, Neil Heywood. While in power, the couple owned luxury properties around the world, and their relatives held key positions in several state-owned enterprises. After the tumbling of Bo’s dynasty, many local officials mysteriously committed "suicide." Officially, these victims were reported to have suffered from mental illness or depression, but many speculate that such killings are an act of power struggle. Since the launch of the latest anti-corruption campaign by President Xi Jinping last year, along with the purge of prominent senior officials, such as Bo Xilai and his family, Chinese “naked officials” increasingly find themselves under pressure to relocate their money and family abroad, to places with more stability, cleaner air, better education, and higher quality of life.

China’s blind focus on economic growth as the only form of development produced generations of bureaucrats who are power hungry and money driven; tragically, they ignore the plight of the people, and are unwilling to address the massive and growing wealth inequality within the country. In the age of globalization, nothing is impervious to the destruction brought forth by unregulated Capitalism.

The number of "naked officials" might be a small bunch, but they play an important role in the larger picture of global inequality. Since post-reform, Capitalism has become the new secular religion in China. While the government brutally cracks down on other popular religions and is fast to demolish Christian churches, no officials dare to criticize the wrongs done by unchecked Capitalism. The fleeing of these “naked officials” is a testament that China’s impressive growth will not sustain if inequality left unaddressed, and what it all means for Americans is that we must rethink what is the meaning of development. How can economic development actually harm the most vulnerable? And what kinds of social development are we lacking? Privatizing public goods, cutting public services, and supporting the "race to the bottom" business model will destroy our democracy-- just look at Sheldon Adelson and his casino-backed money from Macao and Singapore that goes to support the Republican Party. We must move away from our existing neoliberal paradigm, and prepare an alternative plan for when the trickle down theory doesn’t work for all. For now, I will have to re-appropriate my “American dream” to fit a less ambitious reality.