Federal officials: GreenTech's missed targets damaged company's credibility (McAuliffee boondoggle)

Terry McAuliffe, then-chairman of GreenTech Automotive,and former Mississippi Gov. Haley Barbour took a spin inGreenTech’s new electric car in July 2012 at the company’s plant in Horn Lake, Miss.

ROANOKE — Tens of thousands of electric cars were to be rolling off assembly lines by now at a Mississippi factory funded by millions of dollars in foreign money. But last year, GreenTech Automotive, the company Terry McAuliffe co-founded and described as “part of a rebirth for American manufacturing,” produced just 25 vehicles and sold none, according to federal records.

A total of 75 people worked at the plant in rural Tunica County and at the company’s Virginia office — less than a fifth the number of employees the company projected in 2011. The operation lost money from 2009 to Aug. 31, 2015, the records state.

A GreenTech business plan pledges better days to come, but the federal agency that decides whether the company’s foreign investors get green cards doesn’t buy it. Company projections, a federal official wrote, are “not credible by the preponderance of the evidence.”

That conclusion helped prompt officials to reject an EB-5 green card application filed by a GreenTech investor from Inner Mongolia, China, according to a 34-page U.S. Citizenship and Immigration Services decision obtained by The Roanoke Times. The document provides a rare and deep look inside the struggles of the company McAuliffe left behind in December 2012 to concentrate on his successful run for governor.

His foreign business dealings before taking up residence in the Executive Mansion are being investigated by the federal Department of Justice, James Cooper, an attorney for the governor, said last week. The governor has not been accused of wrongdoing.

Cooper has said officials have mentioned the Foreign Agents Registration Act, which requires people to register if they are seeking to influence the domestic or foreign policy of the United States on behalf of a foreign entity. CNN has reported that the Department of Justice investigation into McAuliffe began roughly a year ago. Federal authorities have declined to comment.

An inspector general’s report published March 24, 2015, said McAuliffe received favorable treatment from former immigration services chief Alejandro Mayorkas in 2011, when the GreenTech chairman and future governor sought help getting EB-5 visas approved for foreign investors in his fledgling car company. Cooper said in an email to The Roanoke Times that McAuliffe’s lobbying of Mayorkas is not a focus of the probe. The governor’s lawyer could not be reached for further comment on whether GreenTech is part of the investigation .

Asked earlier this month about GreenTech, McAuliffe replied: “I’ve been out of the company 3½ years and I have no idea what they’re doing today.”

Several months after losing the Democratic gubernatorial primary in 2009, McAuliffe advocated for GreenTech to Virginia economic officials, who raised concerns about the company’s reliance on EB-5 money.

Under the federal program, foreign nationals who have invested at least $500,000 in a domestic business venture may receive green cards if they show their investment generated at least 10 jobs or comparable economic value. An investor seeking a green card may present either tax records of 10 qualifying new employees or a company business plan that demonstrates a need for 10 new employees and lists their likely hiring dates.

Nicholas Colucci, chief of the federal immigrant investor program, signed the decision that said companywide payroll at GreenTech, which operates an office in McLean in addition to the Tunica factory, totaled 75 people. The decision also dismissed a company projection that GreenTech would employ 125 people this year, 175 next and 250 in 2018.

GreenTech said three years ago it had lined up almost 150 EB-5 investors; the company would have needed to create at least 1,500 jobs, or exhibit the potential to do so, for those petitioners to win green cards.

That number seemed possible in the fall of 2009, shortly after McAuliffe joined Xiaolin “Charlie” Wang in founding GreenTech. The company touted plans to Mississippi officials to bring to the state a $1 billion plant employing 1,500 people.

A former Wall Street securities lawyer raised in China, Wang led the firm with McAuliffe, a Democratic fundraiser who guided longtime friend Hillary Clinton’s unsuccessful 2008 bid for the party’s presidential nomination. Following his earlier gubernatorial defeat, McAuliffe turned his pitchman skills to GreenTech, describing it as part of a wave that would reshape American manufacturing as well as automobile travel. A new line would feature two-seat, low-speed electric vehicles with ranges of 50 to 115 miles per charge.

GreenTech, McAuliffe predicted, would produce “thousands” of high-quality manufacturing jobs starting with the factory in Mississippi and possibly including a second plant in Virginia.

“I want to create jobs here that will be around for the next 20, 30, 40 years,” McAuliffe told an interviewer in 2011.

A site near Martinsville was included among potential locations for a GreenTech plant when McAuliffe first queried state officials about locating in Virginia. But GreenTech never came through when asked to provide Virginia economic officials with more information. Tunica County, in Mississippi’s northwest corner, embraced GreenTech, hoping to diversify an economy built on agriculture until the 1990s, when casinos came to the region. A March 2013 GreenTech prospectus described investments of $73 million by 146 EB-5 investors. And the company sought more.

In mid-2011, state and local officials in Mississippi packaged loans, tax rebates, exemptions and other support worth at least $8 million for GreenTech, which agreed to invest $60 million and create 350 jobs paying at least $35,000 annually apiece by the end of 2014. A temporary plant in Horn Lake, Miss., hosted a celebration attended by former President Bill Clinton and then-Mississippi Gov. Haley Barbour in summer 2012.

Five months later, McAuliffe left the company. In fall 2014, with McAuliffe in the Executive Mansion and his GreenTech shares sold, the company finally opened its Tunica factory. The plant was smaller than expected. Hiring moved slowly. By the end of the year, GreenTech had reached neither its investment nor jobs goals, said Jeff Rent, a spokesman for the Mississippi Development Authority.

Last year, GreenTech asked officials to renegotiate its 2011 incentives deal, Rent said.

“At this time,” Rent said, “there is not a modified agreement, but the state of Mississippi is working with the company to best protect its investment and to keep Mississippians working at the plant.”

Local officials are undaunted. “When you come in and start a new business,” Tunica Mayor Chuck Cariker said, “there’s always setbacks that you don’t foresee. As long as you’re working to meet the goal and obligation, I’m glad they’re here.”

In a year when new-vehicle sales in the U.S. hit a record 17.5 million, GreenTech records showed that as of December 2015, the company had produced 25 vehicles — 10 for demonstration, 10 for engineering and testing and five for marketing, according to the Colucci decision. GreenTech business plans submitted in the company’s early years turned out to be unattainable.

“The projections for this company have gone from, in July 2009, a factory, machine shop, office building, museum and residential housing while having the expectation of being able to produce 1 million vehicles a year, to the December 2015 business plan where GTA has produced 25 vehicles,” the decision said.

Past struggles cast a shadow over company forecasts, Colucci wrote, describing GreenTech as experiencing a “general lack of credibility from the failure to meet any projected timelines.” Colucci raised doubts about the company’s production targets of 2,050 vehicles in 2016, 6,200 in 2017 and 12,400 in 2018.

Regulators said they had yet to see proof of a market for the company’s products, which include a gasoline-engine pickup and van and the electric MyCar, which is 5 feet shorter than a typical 14-foot American sedan, specifications show.

Neither federal immigration officials nor a lawyer named in Colucci’s decision would comment on the document. The investor whose visa application was rejected could not be reached for comment.

Investors rejected for EB-5 visas can appeal but must have federal approval to enter and remain in the country. A GreenTech financial prospectus says investors denied green cards may request repayment of their investment.

Immigration services spokesman Steve Blando said investor petitions are judged on a case-by-case basis and denied “for failure to meet specific eligibility requirements.” He declined to summarize agency rulings on GreenTech investor petitions or to address the outcomes for other GreenTech investors who relied on the company meeting its business plans to back their visa applications.

Asked if he still wished GreenTech had located in Virginia, McAuliffe said: “It’s not fair for me to talk. I’m not part of the leadership of the company.”

Wang did not respond to multiple requests for comment left at his McLean office and another left at his Great Falls home. Minnie Xin, Wang’s assistant, said Wednesday that he was out of the country on business. She said she did not know when he would return.

Xin said she could not locate a representative of Gulf Coast Funds Management, GreenTech’s fundraising affiliate, to talk to a reporter. Gulf Coast is based in the same McLean office as GreenTech. The firm formerly was headed by Tony Rodham, Hillary Clinton’s brother, who traveled across China with Wang seeking EB-5 investors. Eighty-five percent of EB-5 green card applicants in fiscal year 2015 were from China, according to the State Department.

Virginia economic officials have softened their resistance to EB-5 since McAuliffe took office, according to emails obtained by The Roanoke Times.

In 2015, a Shanghai law firm posted a Facebook ad soliciting EB-5 money for China-based UniTao Pharmaceuticals a few months after the company said it was idling a Petersburg project into which it planned to invest $22.5 million and hire 376 people. McAuliffe helped broker that deal, meeting with company officials in China to discuss a project in Virginia and approving a $1 million grant for the company. UniTao did not collect the grant.

Signed into law in 1990, EB-5 was largely obscure until the recent recessionary credit crunch sent investments under the program soaring. Concerns also began rising.

In April, the U.S. Securities and Exchange Commission accused two men and their companies of misusing portions of $350 million raised from EB-5 investors to build a ski resort and biomedical research plant in Vermont. A civil complaint outlined what regulators called “a massive, eight-year fraudulent scheme.”

Sen. Patrick Leahy, D-Vt., a longtime EB-5 supporter, said the case proves the need for reform. Congress has authorized EB-5 to continue until Sept. 30 while lawmakers debate fixes. Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, has said the program is “deeply flawed” and lacks “adequate oversight.”

I looked at the picture and red the article at link. I don’t think Americans want to drive modified golf carts as our transportation.
If they could invent a battery to go at least 400 miles and be able to recharged quickly, 15 minutes max, then you could be competitive.
Plus get rid of any ethanol in diesel or gasoline. It’s killing my small machines, being chain saws, pressure washers, lawn mowers, weed wackers, generators.
Please let’s kill ethanol and get back to 100% gas/diesel.
That’s competitive to electric vehicles.

Mr. Trump, when you win and you will. Will you please reverse your thinking on adding more ethanol to our gas/diesel, please.

It’s a proven fact that taking corn for ethanol takes away from human and animal feed which, ultimately leads to much higher feed prices.

Mr. Trump, like you I grew up in an area very similar to Queens in the Northeast, but I’ve lived in Texas now and there is a whole different world here than those cities. Believe it or not many out here in the rural areas are for Trump and let’s face it folks, contrary to what everybody says, he is gonna win.

As a Texan, I will press my Senator Cruz, to get rid of the 10% and now Obama’s 15% ethanol added to gas/diesel.

Xin said she could not locate a representative of Gulf Coast Funds Management, GreenTech’s fundraising affiliate, to talk to a reporter. Gulf Coast is based in the same McLean office as GreenTech. The firm formerly was headed by Tony Rodham, Hillary Clinton’s brother, who traveled across China with Wang seeking EB-5 investors. Eighty-five percent of EB-5 green card applicants in fiscal year 2015 were from China, according to the State Department.

Is this part of flipping Terry McAuliffe...

Mr. Trump, when you win and you will. Will you please reverse your thinking on adding more ethanol to our gas/diesel, please.

It’s a proven fact that taking corn for ethanol takes away from human and animal feed which, ultimately leads to much higher feed prices.

As a Texan, I will press my Senator Cruz, to get rid of the 10% and now Obama’s 15% ethanol added to gas/diesel.

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