As the general manager of the Jay Peak ski resort, Bill Stenger rose most days around 6 A.M. and arrived at the slopes before seven. He’d check in with his head snowmaker and the ski-patrol staff, visit the two hotels on the property, and chat with the maintenance workers, the lift operators, the food-and-beverage manager, and the ski-school instructors—a kind of management through constant motion. Stenger is seventy-five, with white hair, wire-rimmed reading glasses, and a sturdy physique that makes him look built for fuzzy sweaters. He told me recently, of skiing, “I love the sport. It’s a dynamic sport, and, if it’s properly taught, it is life-changing.” On April 13, 2016, he had finished his morning rounds and was drinking coffee with the head of the snow-grooming department when his assistant called. “You need to come over to the office right away,” she said, sounding nervous. “Some folks from the S.E.C. are here.”
Stenger shows an ability to cling to optimism even when the facts don’t warrant it. He didn’t panic at first. “For all I knew, they were coming to take a tour of the place,” he told me. He drove down to the cluster of trailers that served as the resort’s administrative hub and noticed five or six black S.U.V.s in the parking lot. Inside the office, his staff was standing around awkwardly. A lawyer named Jeffrey Schneider told Stenger that the Securities and Exchange Commission was seizing the resort from Stenger’s business partner, Ariel Quiros. It was also seizing Burke Mountain, another ski hill owned by Quiros, an hour away. At that moment, Quiros’s office in Miami was being raided by S.E.C. agents. Schneider handed Stenger an eighty-one-page document alleging that Stenger and Quiros had committed fraud.
Jay Peak sits at the northern end of Vermont, twenty minutes from the Canadian border, and has one of the heaviest snowfalls in the region. It was, for many years, an obscure hill known for deep powder and glade skiing, visited primarily by locals, Canadians, and hard-core enthusiasts. “You could look around at the guests and see people with a lot of duct tape on their equipment,” Mark English, a real-estate agent in the area, told me. “Someone who was addicted to skiing, but didn’t necessarily have a lot of money—that’s who came to Jay Peak.” The area was relatively poor, and jobs were scarce. But, in the early two-thousands, Stenger developed a scheme to expand the resort and create jobs. He raised money using the EB-5 visa program, which aimed to channel foreign investments into businesses that created jobs for Americans, especially in rural or economically depressed parts of the country. For five hundred thousand dollars (the amount has since risen to nine hundred thousand), foreign investors and their families became eligible for green cards, so long as that money succeeded in creating at least ten jobs. “On balance, it’s a good program,” Stephen Yale-Loehr, a law professor at Cornell, said, “in that projects that couldn’t find traditional bank financing have been able to use EB-5 money to get their projects off the ground.”
Stenger persuaded Quiros to back his plan to use EB-5 funding to transform the property into a four-season resort, with a golf clubhouse, an ice rink, an indoor water park with a retractable glass roof, and a wave pool. Quiros later bought Burke Mountain, and hoped to develop that property as well. At Stenger’s urging, he had also acquired a plot in the town of Newport, where Stenger lived, with plans to build a vast biotech facility that would manufacture sophisticated medical products, including dialysis machines and artificial organs (such as portable heart-lung pumps and synthetic livers). They predicted that, all together, the projects could create about ten thousand new jobs. Stenger flew around the world, wooing foreign investors with the promise of a green card. In total, he raised three hundred and fifty million dollars. “Had the plan I was working on been completed, it would have transformed this community forever,” he said.
The S.E.C. accused Stenger and Quiros of perpetrating a “massive” fraud, misusing more than half the money raised. Quiros had allegedly funnelled much of it through a variety of shell companies, and back into his own pocket—pilfering fifty million dollars, for example, to pay his taxes and to buy a condominium in Trump Place, in Manhattan, among other things. Stenger was not accused of stealing money himself. But, according to the S.E.C., he had presented fraudulent job and revenue projections for the projects to encourage further investment, and then looked the other way as Quiros enriched himself. Peter Shumlin, Vermont’s then governor, who had once described Stenger and Quiros as “miracle-makers,” held a press conference at the statehouse, and said, “We all feel betrayed.”
As Stenger read the document from Schneider, federal agents fanned out across the resort, and experts secured the computer systems. Jay Peak was handed over to a court-appointed “receiver,” who would safeguard the property for investors while the case proceeded. The staff was instructed to continue in its duties as normal, and guests didn’t seem to notice anything unusual. After Stenger finished reading the complaint, he stood up and slammed it on the table. “I don’t know anything about this,” he said, adding, “I need to call my wife.” Schneider recalled that Stenger seemed shocked, and that his eyes started to water. Stenger, he told me, “was either very surprised by what he was reading, or he was acting very surprised by what he was reading.”
Rural Vermont is not alone in its struggle to create jobs. Population density is an important factor in generating economic prosperity, putting more remote areas at a disadvantage. In the past fifty years, major metropolitan regions such as Austin and New York have benefitted from a virtuous cycle. The presence of educated workers attracts employers, and vice versa, creating diverse and well-paying jobs. In rural areas, and even in smaller cities such as Detroit and Buffalo, globalization has led key employers—auto or textile manufacturers, say—to leave, prompting more businesses to close, ushering in a downward spiral. In the late nineties and the two-thousands, for example, the influx of cheap furniture from Asia caused half the jobs to disappear from North Carolina’s furniture-manufacturing industry. Robeson County, in the south of the state, once hosted thriving factories; the poverty rate there is now more than twice the national average. Throughout the country, the widening wealth gap between rich city dwellers and everyone else has created, in a sense, two parallel societies, helping to fuel political polarization. During the last Presidential election, Joe Biden won fewer than five hundred counties, but, according to one estimate, they together represented about seventy per cent of America’s economic activity; Donald Trump won five times as many counties, but they represented only about thirty per cent of the nation’s economic activity.
Once an area is in decline, the trajectory is hard to change. Arthur Woolf, a retired economics professor at the University of Vermont, pointed to Hardwick, a town of three thousand people in central Vermont, which fostered an artisanal-food-based economy that local leaders hoped would bring business to the area. A premier cheese producer, Jasper Hill Farm, is there, and the surrounding area hosts several fancy breweries, an organic-vegetable purveyor called Pete’s Greens, and several farm-to-table restaurants. One local wrote a book called “The Town That Food Saved,” which described how the model could be replicated elsewhere. But five years ago Woolf researched the claims of Hardwick’s boosters, and found that the effort hadn’t made a substantial difference to local employment in the previous fifteen years. “These are long-term structural factors that are really hard to reverse,” he told me.
The idea behind the EB-5 program was that visa-seeking foreigners might be more willing to pour money into low-income areas than domestic investors. After the program was signed into law, in 1990, ten thousand green cards were set aside each year for people willing to invest. Doug Bereuter, then a Republican congressman, framed the law as a violation of American values, noting that he was saddened to learn that American citizenship was “for sale to the highest bidder.” But the arrangement also had its fans. “The EB-5 program, in a nutshell, is a job-creation program,” Matt Gordon, who runs the E3 Investment Group, which advises foreign investors, told me. “You have wonderful people who are immigrating to America, and they’re investing their capital with U.S. entrepreneurs.”
In the first decades of the program, a tiny fraction of the visas were used. But, over the years, a few changes made it more attractive. Congress allowed for pooled investments—the combining of funds to finance larger, potentially more lucrative developments. It also made the job-creation requirement more flexible: a foreign investor could now claim that jobs were created “indirectly” because of the money. After the 2008 financial crisis, banks and other institutions pulled back on their lending, leaving entrepreneurs desperate for cash. Those familiar with the EB-5 program saw this as an opportunity. An army of middlemen—legal advisers and brokers—began scouting for projects in need of funding, recruiting foreign investors, and, when the deals went through, earning finders’ fees amounting to tens of thousands of dollars per investor on a given project. Initially, some of these middlemen were former federal immigration officials. Harold Ezell, a former commissioner for the Immigration and Naturalization Service who became an immigration consultant, told the Times, “We’ve done a great job with boat people, and I think that a few yacht people are not going to hurt America.”
Soon, brokers were holding meetings for investors at fancy hotels around the world. “People like to have a second passport,” Gordon told me. China has been the largest source of investors, and, recently, Gordon has noted an increase in demand. When I asked why, he said, without hesitating, “Oh, fear,” and noted that China’s President, Xi Jinping, has, in the past decade, been “at war with the wealthy class, and people are genuinely afraid.” EB-5 funding has supported worthy projects. In rural West Virginia and Pennsylvania, it helped create two opioid-addiction treatment centers. A development at the Sugarbush ski resort, in Warren, Vermont, ran out of conventional funding in 2008, but was completed with EB-5 funding, saving an estimated eight hundred and sixty jobs. “We paid back the investors in about a decade,” Sugarbush’s former owner told me.
Over time, though, people began to put the program to more creative uses. In 2015, the developers behind Manhattan’s Hudson Yards raised at least $1.2 billion in EB-5 financing for a project that included a luxury shopping mall, condos, and an office tower. It was the most expensive real-estate development in U.S. history. The Times described it as a “vast neoliberal Zion.” In order to qualify for the most favorable tier of EB-5 financing, available only to areas with high unemployment, New York’s economic-development agency hired an economist to create a map with a string of census tracts that awkwardly stretched to include Central Park as well as a cluster of housing projects at the northern end of the city. “They called it ‘the Snake,’ ” Michael Gibson, an EB-5 investment adviser, told me. “The minute they figured out they could do this census-tract manipulation—really gerrymandering—all of this blew up.”
Other projects employed the same strategy. A hundred-and-fifty-million-dollar Waldorf-Astoria was completed in Beverly Hills using a redrawn map of twelve connected tracts. A Chinese-themed hotel complex and casino called Resorts World went up in Las Vegas, financed through almost a billion dollars in EB-5 funding. In 2016, Jared Kushner’s family used the program to build a fifty-story Trump-branded luxury-apartment building in New Jersey. The following year, Kushner’s sister Nicole Kushner Meyer pitched another such development to a ballroom full of potential investors in China. An ad for the event read, “Invest $500,000 and immigrate to the United States.”
Bill Stenger lives in a comfortable two-story house in Newport, Vermont, overlooking Lake Memphremagog. The space is lined with dark wood and crammed with candles, flowers, and a painted sign that reads, “A Day at the Lake with Friends & Family . . . Priceless.” When I visited him there recently, the two of us sat at the dining table, which was covered with files from his years marketing Jay Peak. Stenger grew up in Corning, New York, where he spent his childhood winters coasting down hills on wooden skis. In 1964, he went to Mont Tremblant, in Quebec—his first experience at a real ski resort. Stenger said, of his first run, “When I got to the bottom and looked back up and saw the fresh tracks, I had such a rush that I’ll never forget.” In 1975, he began working in the ski industry. He taught his wife, a nurse named MaryJane, to ski at Killington, one of Vermont’s better-known ski areas.
Stenger has trouble containing his passion for the sport. He cites a theory advanced by John Kitchin, a neurologist who left medical practice to spend his days rollerblading blissfully on the San Diego boardwalk. Kitchin believes that lateral movement of the sort involved in rollerblading and skiing stimulates the otolith, a piece of calcium carbonate that sits on a person’s inner ear and triggers feelings of flow and euphoria. Stenger said, of ski slopes, “People are there to have a wonderful time with their families, their kids. There’s nothing negative about it.”
In 1984, Jay Peak’s owner, Jacques Hebert, brought Stenger on as the resort’s general manager. Jay Peak was beloved, but it lacked proper snowmaking equipment, and the lifts required upgrades. “I was excited to go to a place that needed help,” Stenger said. Close to the mountain, there were few places to stay, and this restricted the number of people who could visit. Stenger always hated the month of April, the end of the season, when he had to lay off hundreds of people. Virgil Starr, a diminutive seventy-three-year-old maintenance worker, told me that his wife, mother, daughter, and all four of his brothers had worked at the resort in some capacity. Each spring, when Starr was laid off, he took a job at a local plywood factory, but he preferred laboring outdoors at Jay Peak. He said, of the resort, “Working here kept me young and spry and occupied.”
In the nineties, Stenger started sketching out an ambitious redesign that would make the resort viable year-round. “The thing I loved about this master plan was that it would allow me to keep my employees,” he said. He shopped for potential backers, starting with some of the Canadian bankers who skied on the mountain. Joseph Gresser, the editor of the Barton Chronicle, a local paper, told me that every few years Stenger would announce that he’d found someone to help transform Jay Peak into a four-season resort. “And, every time, something happened,” Gresser said. “They looked at the underlying numbers and decided it wasn’t a good investment. There was a recession. Whatever.” Jay Peak is in a part of Vermont known as the Northeast Kingdom. Tom Kavet, an economist for the Vermont state legislature, told me, “There have been many state programs that have tried to bring jobs to the area, but nothing really worked.”