(AP) Documents: SEC probing McAuliffe former e-car firm
By BOB LEWIS
AP Political Writer
The electric-car company headed until last fall by Democratic Virginia gubernatorial candidate Terry McAuliffe and a sister company led by the brother of former Secretary of State Hillary Clinton are under federal scrutiny over how they used a foreign investor visa program.
Nearly 100 pages of newly released documents reveal the Securities and Exchange Commission in May subpoenaed records of GreenTech Automotive and Gulf Coast Funds Management, a partner in GreenTech’s efforts to establish plants in Mississippi. The inquiry is related to their use of a Department of Homeland Security program that grants permanent residency to foreign investors who invest $500,000 or more in economically struggling areas for ventures that create American jobs.
McAuliffe is a former chairman of the Democratic National Committee and close friend and chief fundraiser for the presidential campaigns of Bill and Hillary Clinton. He was a co-founder and chairman of GreenTech until he quietly resigned after announcing his candidacy for governor in November.
Gulf Coast’s chief executive and president is Anthony Rodham, the brother of the former first lady.
There was no reply to telephone messages the AP left Friday afternoon at GreenTech’s McLean, Va., headquarters and at Rodham’s home.
SEC spokesman John Nester declined to comment on the investigation.
GreenTech, with the aid of Gulf Coast, used what is known as the EB-5 program to attract overseas capital, particularly from China where the company has its roots. Gulf Coast is one of hundreds of “Regional Centers” that pool investments from foreign nationals looking to invest in U.S. businesses or industries as part of the foreign investor visa program.
Documents posted on the website of Sen. Charles E. Grassley, R-Iowa and the ranking member of the Senate Judiciary Committee, show that the SEC’s subpoena sought unspecified documents from GreenTech and banking records from Gulf Coast. The documents also indicate that GreenTech impermissibly guaranteed investors returns on their money.
The documents include a 12-page letter from Grassley to Alejandro Mayorkas, director of U.S. Citizenship and Immigration Services which oversees the EB-5 program, accusing Mayorkas of providing unusually preferential treatment to the politically connected McAuliffe and Rodham to expedite EB-5 applications from foreign investors.
Among documents Grassley references is an email from McAuliffe in which he complains about the deliberate pace of USCIS staff in approving an application and drops the name of Virginia’s senior U.S. senator, Mark R. Warner, to drive home his point.
Mayorkas, testifying last week on his appointment before a skeptical Senate Homeland Security Committee, denied ever exercising undue influence on the outcome of a case.
McAuliffe, in the gubernatorial campaign, touts his stewardship at GreenTech as an example of his prowess at creating jobs. Last year, he said he located a start-up plant for the tiny, all-electric, two-seat MyCar in the Memphis, Tenn., suburb of Horn Lake, Miss., because Virginia economic development officials would not bid on the factory.
Years’ worth of emails and other correspondence between McAuliffe and other GreenTech executives and Virginia Economic Development Partnership first reported by AP in December showed that VEDP staff under Democratic and Republican governors showed company officials a variety of sites in economically depressed Virginia regions. But the Virginia officials never got answers to questions about company operations and became skeptical of the investments-for-visas EB-5 program as a cornerstone of GreenTech’s financing.
Senate Judiciary Committee documents (Grassley): http://1.usa.gov/1cmhM8c