How did Terry McAuliffe, the Democratic Party's choice to run for governor in Virginia in 2013, get so rich? His first job out of college was with President Carter's 1980 re-election campaign where he rose to be national finance director at the age of 22. Then, after graduating from law school, McAuliffe helped found the Federal City National Bank in 1985. Three short years later, the bank's board elected McAuliffe chairman, making him the youngest elected chairman of a federally chartered bank in the history of the United States.
Now why would a tiny young bank elect a campaign-worker-turned-law student with no banking experience president of the operation? Maybe it was because McAuliffe immediately roped in big business from politicians like then-presidential candidate Richard Gephardt, then-House Majority Whip Tony Coelho and then-Speaker of the House Jim Wright.
By 1992, McAuliffe was inducing Democratic-friendly union pension funds into investing millions of union member dollars in his Florida real estate company. Not all those loans got repaid, however. After McAuliffe's real estate company failed to pay one $6 million loan from the International Brotherhood of Electrical Workers, the Department of Labor sued. It claimed the pension trustees improperly invested with McAuliffe since they should have known the loan would never be repaid. In 2001, those trustees were forced to pay the union $4.95 million in restitution. McAuliffe got off scot-free.
McAuliffe's big payday arrived after he became President Clinton's top fundraiser in the 1990s. A self-described "hustler," McAuliffe was able to not only sell wealthy businessmen access to Clinton but also cut many lucrative side-deals with them for his own benefit.
But not every government agency has been so willing to be a conduit for McAuliffe's political get-rich schemes. During the closing days of then-Democratic Gov. Tim Kaine's tenure in 2009, McAuliffe sought approval from the Virginia Economic Development Partnership, or VEDP, to help create an Immigrant Investor Regional Center in Sussex County. A Regional Center designation would have allowed McAuliffe to raise money for his new GreenTech electric car company from Chinese nationals, who would then receive visas to live in America after they invested in McAuliffe's company.
But the director of business development at the VEDP apparently knew a hustler when she saw one. Citing McAuliffe's complete lack of "management expertise" and "market preparation," she concluded that his company was nothing more than a "visa-for-sale scheme with potential national security implications." Her supervisor agreed. The VEDP did not grant McAuliffe his Regional Center designation, so McAuliffe took his business to Mississippi, where one was already established.
Except GreenTech has not been doing much actual business since setting up shop in Mississippi. The company was supposed to begin producing tens of thousands of electric-powered cars a year by 2011. That didn't happen. In fact, Tunica County, Miss., has since pursued GreenTech for not paying taxes in 2012. GreenTech tried to claim that it had a deal with the state exempting it from local property taxes, but the county countered by noting that that tax break only applied if GreenTech was producing cars. It is not. So GreenTech was forced to pay up.
McAuliffe very quietly left GreenTech last December without any public notice by him or GreenTech. He now claims he left the company to focus on his run for governor in Virginia and has no clue about any unpaid taxes or visa-for-sale scheme. That isn't a good enough answer. The Virginia Economic Development Partnership rejected Terry McAuliffe's brand of crony capitalism in 2009, and Virginia voters should do the same in 2013.