An electric-car company co-founded by Virginia gubernatorial candidate Terry McAuliffe (D) is being investigated by the Securities and Exchange Commission over its conduct in soliciting foreign investors, according to law enforcement documents and company officials.
In May, the SEC subpoenaed documents from GreenTech Automotive and bank records from a sister company, Gulf Coast Funds Management of McLean. The investigation is focused, at least in part, on alleged claims that the company “guarantees returns” to the investors, according to government documents.
GreenTech has sought overseas investors through a federal program that allows foreigners to gain special visas if they contribute at least $500,000 to create U.S. jobs. Gulf Coast, which is run by Anthony Rodham, the brother of former secretary of state Hillary Rodham Clinton, seeks investors for GreenTech and arranges the visas.
In recent months, the SEC has stepped up its scrutiny of companies that use the visa program, largely over concerns that investors may have been misled or defrauded by the companies seeking their money. The visa program has also raised national security concerns from some lawmakers worried that suspect individuals are using it to gain entry into the country.
The full focus of the SEC investigation into GreenTech and Gulf Coast is not known, and SEC officials declined to comment.
A spokesman for McAuliffe’s campaign said that the candidate “has no knowledge of any investigation,” which appears to have started in early 2013, according to Homeland Security Department documents. McAuliffe resigned as chairman of GreenTech in late 2012 as he began his run for governor, although he did not publicly reveal that he had done so for several months.
Some of the details about the SEC’s concerns are contained in nearly 100 pages of internal DHS documents and e-mails that were obtained by Sen. Charles E. Grassley (R-Iowa), a critic of the visa program.
Representatives of GreenTech and Gulf Coast, which share office space in Tysons Corner, confirmed Thursday that they had received subpoenas from the SEC for documents and said they planned to cooperate with the investigation. They declined to elaborate.
The new issues surrounding GreenTech are likely to create fresh political problems for McAuliffe, who launched the company after his failed 2009 bid for governor in part to burnish his credentials as a businessman and job creator.
McAuliffe initially pledged to build a factory “right in the heart of Virginia,” but the company instead set up shop in Mississippi after getting generous incentives from that state and local governments. Joining McAuliffe for the July 2012 ribbon-cutting were a top DHS official, then-Mississippi Gov. Haley Barbour (R) and president Bill Clinton.
McAuliffe’s close ties to the Clintons have fueled his political career — during the Clinton presidency, he was often referred to as “first friend.”
McAuliffe said last year that he thought GreenTech could build 10,000 cars in 2013. A fraction of that number has been built, and McAuliffe rarely mentions the company on the campaign trail.
The company’s struggles, its reliance on foreign investors and government help, and its location have become regular lines of attack by Republican gubernatorial candidate Ken Cuccinelli II. At a debate last month, for instance, Cuccinelli said to McAuliffe that the Democrat “walked right over the people of Martinsville on your way to Mississippi.”
Cuccinelli responded to news of the SEC investigation Friday by reiterating his calls for McAuliffe to be more transparent about his dealings with GreenTech.
“Instead of coming forward and addressing this matter head on, McAuliffe has refused to provide Virginians answers on a list of questions that is only growing longer and more serious by the day. . . . Virginians deserve answers and deserve them right now,” Cuccinelli said in a statement.
Aside from the SEC investigation, the newly obtained documents show greater communication between McAuliffe, Rodham and DHS officials than was previously known, as well as concern over a potential GreenTech investor tied to a Chinese firm that has raised national security concerns.
The documents counter the impression left last week by a top U.S. immigration official, Alejandro Mayorkas, who testified in front of a Senate panel that he met with McAuliffe on one occasion, “and that was the extent of the interaction.”
The documents show that Mayorkas and other senior DHS officials had a dozen e-mail and telephone contacts with McAuliffe, Rodham, and other representatives of GreenTech and Gulf Coast.