A 2009 Private Placement Memorandum designed to raise $50 million for GreenTech Automotive, the company where Virginia Democratic gubernatorial nominee Terry McAuliffe served as chairman from March 2010 until December 2012, stated that the startup company’s electric and hybrid vehicle operations are a “good business opportunity” due to the expectation that stricter emission standards will be enacted in the United States.
This new revelation supports the perception that McAuliffe is not the entrepreneur he claims to be, but is instead a major beneficiary of “Clintonism”–the use of government programs and powers for the self-enrichment of a small group of insiders. As Bill Clinton’s chief fundraiser and former Chairman of the Democratic National Committee, McAuliffe is the ultimate Clinton insider.
In December, 1999, Bill Clinton’s EPA Administrator, Carol Browner, announced severe auto emission standards, which she claimed was the first time a President “actually set emission standards; previously, Congress had done all the work.”
As Secretary of State Hillary Clinton, who reportedly will be campaigning in Virginia with McAuliffe within the next several months, supported even tougher standards for gasoline powered automobiles as well. In a 2012 speech on energy and foreign policy at Georgetown University she emphasized the Obama administration’s commitment to higher emission standards. “The transformation to cleaner energy is central to reducing the world’s carbon emissions and it is the core of a strong 21st century global economy,” she said. She also promised that “[n]ew auto standards will double how far we drive on a gallon of gas, and for the first time, we’ve introduced fuel efficiency standards for heavy trucks, vans and buses.”
McAuliffe’s close connections to the Clinton family is on display in the financing plan for his GreenTech Automotive venture. Gulf Coast Funds Management, the EB-5 regional center which Hillary Clinton’s brother Anthony Rodham now heads, was identified as the fund manager in the August 2009 Gulf Coast Automotive Investment Fund A-1 Private Placement Memorandum (PPM) that sought to raise $50 million from foreign nationals participating in the EB-5 program. The PPM stated that “GreenTech Automotive believes that increasing emission standards will present a good business opportunity for new hybrid cars.”
According to the PPM, “emission regulations have become increasingly stringent. For instance, on December 17, 2008, the European Parliament voted to adopt a strict emission regulation, which limits on the fleet average of CO2 (carbon dioxide) to be 130 grams per kilometer (g/km), and will impose sliding scale penalties on the manufacturers for excessive emission starting from 2012. It is expected that similar emission standards will be required in the near future by the US government.”
It is precisely this juxtaposition between U.S. government regulations, political contributions, and investment in GreenTech Automotive through the controversial EB-5 investment program that is fueling supporters of Republican nominee Ken Cuccinelli, who criticize McAuliffe as a “crony capitalist” and a “wheeler-dealer” who got rich by leveraging his political connections to Bill Clinton and other influential elected officials.
Though McAuliffe’s business relationship with GreenTech Automotive was not formalized until March 2010, when he became chairman and a significant equity owner of the company, his political ties to GreenTech Automotive’s founder Charles Wang and the predecessor companies Mr. Wang was involved in stretches back to 2008.
GreenTech Automotive has raised an unknown amount of capital through the EB-5 investor program, which allows foreign nationals to obtain temporary and permanent green card visas by investing at least $500,000 in an American company.
According to United States Citizenship and Immigration Services (USCIS) documents recently released in a FOIA request, the first foreign national who invested at least $500,000 in The Gulf Coast Automotive Fund A-1 through the EB-5 program submitted an I-526 petition for a temporary green card visa in June 2009, and was approved to receive that temporary visa by the USCIS in July 2009. All 31 investors who have been approved to participate in the program are Chinese nationals.
As chairman, it appears that McAuliffe continued to promote investment in the August 2009 Gulf Coast Automotive Investment Fund A-1, and also promoted a second investment fund, GTA Fund A-2, LLC, which was put together around March 2010 and sought to raise an additional $50 million for GreenTech Automotive. A third investment fund, GreenTech Automotive Partnership A-3, was launched in January 2012 and sought to raise an unknown amount of capital.
Elements of the political controversy surrounding McAuliffe’s involvement with GreenTech Automotive were captured recently in a web graphic ad designed by a Republican research group called America Rising that wondered out loud about the product McAuliffe was selling during his days as the company’s chairman. The graphic ad, which can so far be seen only on one small site, claims that “Terry McAuliffe’s GreenTech Has Imported More Chinese Nationals Than It Has Sold Cars.”