All Virginia’s gubernatorial race needs is another investigation for potential wrong-doing. Yet here’s another and it involves Democratic contender Terry McAuliffe.
The U.S. Securities & Exchange Commission is investigating two McAuliffe-connected firms. They are GreenTech Automotive and a sister firm, Gulf Coast Funds Management, according to the Washington Post.
McAuliffe, a veteran entrepreneur, had set up GreenTech to make small, battery-powered cars. He had considered Virginia as a plant site, but ended up moving to Northern Mississippi, which had offered better incentives. After deploying his high-profile charm to push GreenTech, McAuliffe quietly resigned from it in December. He kept his departure quiet until it was revealed during his gubernatorial run several months later.
The Post reports that the SEC is concentrated on allegations that the company guaranteed returns to foreign investors. It also was involved in a 20-year-old program that granted visas to high wealth individuals who promised to invest $500,000 or more in U.S. companies.
The GreenTech affair has several links to Bill and Hillary Clinton, close friends and associates of McAuliffe, who helped bankroll their suburban New York City home after they left the White House. The head of Gulf Coast Funds is Anthony Rodham, Mrs. Clinton’s brother. And when the first electric cars rolled off the line, Bill Clinton was there to cheer them. The plant, which cost about $1 billion, has had some production delays and employs far fewer than originally announced.
The GreenTech project has a heavy involvement of Chinese businessmen and many of the visas were intended for them. Although there are no specifics in the McAuliffe case yet, some lawmakers have worried that the visa program might hurt national security by letting suspect foreigners in the U.S. simply because they have money to invest.
Kenneth Cuccinelli, McAuliffe’s opponent, has been quick to point to GreenTech as a nest of corruption. Yet Cucinelli has had his own problems with ethics, namely the gifts and stock he held in Star Scientific, a Henrico County dietary supplement maker that has led to tons of trouble for Gov. Robert F. McDonnell. A local prosecutor cleared Cuccinelli of legal wrong-doing, but federal and local probes of McDonnell continue.
A wealthy businessman, McAuliffe also has been criticized for his involved in GlobalCrossings, a company created during the IT craze of the late 1990s to link the world with high-speed fiber optic cable. McAuliffe invested $100,000 in the firm and bailed out with a big profit after it went public in 1998. The firm filed for bankruptcy but it later emerged from receivership and an SEC probe of it found no wrong-doing.
So far, McAuliffe has kept a fairly low profile in the campaign. He hasn’t had to do much because of the swarm of negative publicity regarding McDonnell, Cuccinelli, and Jonnie R. Williams Sr., the head of Star Scientific.
But I always wondered what the deal was with GreenTech. When McAuliffe kicked off his campaign last winter, I wanted to tag along, but did not get a warm reception from his staff. I eventually did go on a tour, but McAuliffe seemed reluctant to talk about GreenTech. He hadn’t told the public yet that he had bailed on that one three months before.