You may recall reading a story recently about Jared Kushner’s sister soliciting investments in Kushner real estate deals at a meeting in Beijing, where she promised that investors of at least $500,000 would get a green card in exchange. Investing in charter school construction is another way in which the EB-5 visas are up for grabs.
This story from South Carolina demonstrates how foreign investors are buying green cards by investing in charter school construction, and the middlemen are raking in money at exorbitant interest rates.
A handful of S.C. charter schools — finally in new school buildings — are poised to pay out millions in taxpayer dollars to middlemen, developers and foreign investors who want green cards.
The money, paid in the form of high-interest rent payments on the new school facilities, has some critics saying that the state’s taxpayers are getting duped. Money they believe is paying for S.C. students’ education is instead going to this relatively new network of out-of-state players who are charging high interest rates, as well as wealthy Chinese nationals searching for a quicker path into to the country.
And it’s all happening with federal government approval.
“They were taken for a terrific ride and are paying this high interest rate. It’s remarkable,” said David North, a fellow with the conservative Center for Immigration Studies in Washington, D.C., “They could end up paying more in interest than the (cost to construct the school).”
Figuring out just who is getting paid what is complicated and is not readily available in one place. Take, for example, Lowcountry Montessori School in Port Royal, a charter school that serves about 400 students in preschool through the 11th grade.
Through a controversial federal program called EB-5, the school received $1.5 million from three foreign investors to build its school building that opened last school year on Broad River Drive.
Critics have long charged that the program allows rich immigrants to buy their way into the country. And in recent years, cases of fraud and concerns about national security have also plagued the program.
The Port Royal school’s financial arrangement was put together by American Charter Development, a Utah-based company, that secured another $4 million for the new building and constructed the school.
The school is now leasing its $5.5 million building from ACD at a whopping 9 percent annual rate of the school’s construction costs. If the school were to make only the minimum payments over the course of the 20-year lease, $5.6 million of its $10.3 million in lease payments would be interest, according to the school’s most recent audit.
Worked into those lease payments is another key player — Utah-based Education Fund of America, a for-profit company which is receiving a 7.3 percent annual fee on the $1.5 million it secured in EB-5 funding for the school.
And then there are the three unnamed foreign entrepreneurs who actually invested the $1.5 million. The school will pay them back as well, likely including a small return on their investment of around 1 percent, say those familiar with the EB-5 program. The repayment is also included in the lease arrangement.
By comparison, the Beaufort County School District is paying just 1.6 percent interest on its construction bonds for its new May River High School that opened last year.
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