Washington Post: McAuliffe's GreenTech Venture Deserves Scrutiny

Image: Washington Post: McAuliffe's GreenTech Venture Deserves Scrutiny

Thursday, 15 Aug 2013 09:04 AM

By Lisa Barron

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Virginia Democratic gubernatorial candidate Terry McAuliffe should come clean with the details of a controversial electric-car company he launched shortly after his failure to win the party's nomination for governor four years ago, The Washington Post said.

The company, GreenTech Automotive, "remains a fledgling, unproven venture with a modest payroll of 100 people and no significant production capacity; whether it takes off in the coming year, as company executives insist it will, is anyone's guess," the Post said in an editorial Tuesday, raising questions about whether the venture is a serious attempt to create a legitimate business or a "scheme" to attract investors to support McAuliffe's political campaign.

"GreenTech relies heavily on financing from wealthy foreigners, many of them Chinese, who pony up at least $500,000 each through a federal program designed to attract overseas investors. In return for their investments, they receive U.S. visas and may become eligible for permanent residency green cards," the editorial said.

"The EB-5 visa program is legal; it’s been operating since 1990 with bipartisan support. The troubling question is whether GreenTech, as conceived by Mr. McAuliffe, is a serious and viable automotive enterprise or mainly a scheme to attract foreign investment capital and serve Mr. McAuliffe’s political agenda."

The fact that production has been so slow, turning out just a few hundred golf-cart-sized electric cars, and has prompted a federal investigation focusing on whether a senior official at the Department of Homeland Security gave McAuliffe special treatment in approving EB-5 visas for GreenTech investors, adds to the suspicions, the Post noted.

"Equally disconcerting is GreenTech's refusal to allow journalists to tour its factory in Mississippi," the editorial said. "According to former GreenTech employees who spoke to The Post, the plant is a Potemkin manufacturing facility, where managers stage a semblance of production for the benefit of visitors. Company officials deny that. If it's untrue, they should allow journalists to see for themselves."

McAuliffe, who resigned as GreenTech's chairman in December but remains its biggest shareholder, has drawn fire in the governor's race from his Republican rival, Virginia Attorney General Ken Cuccinelli, about his involvement with the company.

The Post editorial dismissed most of Cuccinelli's complaints against McAuliffe's handling of the company as "nonsense." But it noted that one complaint, which has prompted a Securities and Exchange Commission investigation, is fairly serious.

The SEC reportedly is looking into whether GreenTech made improper promises to investors by suggesting they would receive guaranteed returns on their investments.

"Mr. McAuliffe is a renowned fundraiser and a wealthy man. He's leveraged his extensive political network with some of his money-making ventures, and he tried to do the same with GreenTech," the Post charged.

"That's not particularly disturbing. But if the company is mainly smoke and mirrors — if it is little more than a visa mill launched to serve Mr. McAuliffe's political ambitions — that is disturbing. Virginians are right to press him for answers."

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