A Rough Week for Terry McAuliffe in Virginia

Posted: Apr 16, 2013 11:19 AM

Earlier this month, Republican gubernatorial candidate and Virginia Attorney General Ken Cuccinelli experienced a few bumps in the road over a court case involving his application of a somewhat archaic state sodomy law.  We clarified the arcane details of the controversy, then admonished the Cuccinelli campaign that poking culturally-divisive hornet's nests -- even for narrow, practical reasons -- can be risky politics and should be handled with greater care.  Cuccinelli's Democratic opponent, Terry McAuliffe, tried to make hay over the kerfuffle, but was forced to back off shortly thereafter.  His campaign, it turned out, couldn't decide whether their candidate agreed or disagreed with Cuccinelli's action (which happened to involve siding with the dissenting opinion of an Obama-appointed judge).  Last week, it was McAuliffe's turn in the unwanted spotlight -- where he's remained for days.  His campaign announced that months earlier, he'd quietly resigned as chairman of Green Tech Automotive, a perch from which he hoped to burnish his thin credentials as a "Virginia businessman."  Even though McAuliffe severed ties with Green Tech late last fall, he and his campaign made no effort to correct media accounts still identifying him as the company's leader.  In the meantime, the corporation increasingly looks like another taxpayer-subsidized boondoggle, with some legal questions cropping up about its activities.  The Wall Street Journal's Kimberly Strassel chronicles McAuliffe's shifting story:

GreenTech bragged that in its first phase alone it would invest $1 billion, employ 1,500 and produce 150,000 cars annually. Mr. McAuliffe grandly unveiled his signature MyCar last July at a rock-star event attended by Messrs. Clinton and Barbour. Business creds in hand, he then announced his run for governor—and the problems began. Among the first questions he was asked was why, as a proud "Virginia" businessman, he'd located his business in Mississippi. Scrambling, Mr. McAuliffe stated that he had wanted to bring his jobs home but the Virginia Economic Development Partnership "didn't want to bid on" GreenTech—whereas Mississippi had offered incentives. He went so far as to criticize the state for not going after manufacturing jobs like his, suggesting he'd change that. After an investigation, media outlets discovered that Virginia never received enough information from GreenTech to proceed. The Associated Press reported that the state agency worried that "GreenTech lacked brand recognition; had not demonstrated vehicle performance; had no federal safety and fuel-economy certification; no emissions approval . . . no distribution network" and (ouch) "no demonstrated automotive industry experience within the executive management team." Rather than respond to these concerns, GreenTech moved on with Mississippi (which perhaps wasn't asking annoying questions).

Strassel hazards a guess as to why McAuliffe chose to dissolve his formal relationship with his erstwhile company while maintaining the mirage of meaningful business credentials:

Virginia was particularly alarmed by GreenTech's use of an opaque visa program, called EB-5, to fund itself. Part of a 1990 immigration law, EB-5 lets foreigners who invest at least $500,000 in a U.S. company receive green cards. A federal immigration agency approves "regional centers" that administer the program. While these centers can be run by local government, GreenTech proposed running a Virginia center itself. One official at the Virginia development agency wrote to colleagues that she couldn't view Greentech's EB-5 program as "anything other than a visa-for-sale scheme with potential national security implications."

...This is of particular interest, since GreenTech looks to be a lemon. Despite promising production in 2011, there is no evidence the company is manufacturing any cars in volume. It is operating out of a temporary site and has yet to begin building its flagship factory in Tunica. GreenTech is the latest proof (after Solyndra, Fisker, A123 and others) that the political class is adept at hooking up cronies and investors with taxpayer dollars. But creating jobs? No can do. This may explain the latest news bomblet. Mr. McAuliffe continued flogging his GreenTech credentials this year, appearing in January at a trade show under the title "chairman of GreenTech Automotive." Recent media reports have also used that title—with no protest from the candidate. But as the heat mounted, his campaign last week released a letter that claims Mr. McAuliffe had resigned from GreenTech by Dec. 1, 2012. The company, Mr. McAuliffe would now like everyone to know, has nothing to do with him.

 McAuliffe, you see, is a "Virginia businessman" and a "job creator."  But his company was rooted in Mississippi.  And it hasn't created anywhere close to the jobs or inventory he promised.  And it's now facing scrutiny for possibly engaging in a lucrative visa-for-cash laudering scheme.  As the politician moves to extricate himself from his political mess, his former company is suing the watch dog organization that reported the visa-for-sale angle...for $85 million.  That group, run by our friends at the Franklin Center, are standing by their work and vowing to fight on.  The lawsuit certainly smacks of political bullying.