POLITICS: PennAve

Terry McAuliffe’s former car company probed by SEC

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Virginia,Steve Contorno,Terry McAuliffe,Campaigns,PennAve,2013 Virginia Governor Race

An electric car company started by Virginia's Democratic gubernatorial nominee Terry McAuliffe is under a federal investigation.

According to a report by the The Washington Post, the Security and Exchange Commission subpoenaed documents in May from GreenTech Automotive, a company for which McAuliffe served as chairman until late last year. The SEC also requested banking information from Gulf Coast Funds Management, a McLean company run by a brother of Hillary Clinton that helped fund GreenTech.

The probe allegedly is focused on whether the company guaranteed returns for its investors, including foreign nationals who were granted visas to the U.S. in exchange for their investments under a federal program called EB-5.

A spokesman for McAuliffe’s campaign said the Democrat “left GreenTech in early December 2012 and has no knowledge of any investigation.”

McAuliffe and Gulf Coast Funds Management drew scrutiny recently during the Senate confirmation hearing of Alejandro Mayorkas, President Obama’s pick for the No. 2 post in the Department of Homeland Security. McAuliffe met with Mayorkas in 2011 to complain about the EB-5 program moving slowly, and Mayorkas is being investigated by an inspector general to determine if he used his official authority to speed the visa process.

GreenTech was supposed to be the proof of his business acumen that McAuliffe intended to show Virginia voters, but instead has repeatedly hurt his campaign. Republican gubernatorial nominee Ken Cuccinelli criticized McAuliffe for building the main production plant in Mississippi instead of Virginia.

The company also has failed to reach McAuliffe’s highly publicized goals for job creation and production.

“Today we are confronted with another news story that raises very serious questions about reckless business practices by Terry McAuliffe and his associates,” Cuccinelli said in a statement Friday.

“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.”

The Virginia governor's race was supposed to be the marquee political contest of 2013, but so far neither candidates has done well under a national spotlight.

Aside from questions about his business dealings, McAuliffe’s lack of experience in Virginia government continues to garner regular scrutiny from Republicans.

Meanwhile, Cuccinelli is bogged down by an ethics scandal involving the state’s current Republican governor, Bob McDonnell, and his close ties to the businessman at the center of that controversy.

Earlier this week, McDonnell volunteered to return thousands of dollars worth of gifts from Star Scientific CEO Jonnie Williams, a politically connected donor who at times paid for Cuccinelli’s vacation and travel.

Cuccinelli also invested heavily in Star Scientific — at one point it was his only stock holding greater than $10,000 — and profited off a well-timed sale of some of the stock.

Star Scientific, a Virginia-based supplement company, is the target of a SEC investigation as well, and it also is embroiled in a legal dispute with the state over unpaid taxes.

Earlier this year, Cuccinelli, the state’s attorney gneral, stepped away from the legal battle with Star Scientific citing a conflict of interest. That incident also prompted him to sell the remainder of his Star Scientific stock at a loss.

Polls so far show a tight race with McAuliffe typically holding a statiscally insignificant leads. McAuliffe and Cuccinelli debated for the first time last month and remain at odds over how many debates to hold before Election Day.

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