McAuliffe campaign demands that PAC shut down negative ad

Virginia gubernatorial candidate Terry McAuliffe (D) has demanded that an Alexandria-based super PAC shut down a negative television ad, according to interviews with the PAC’s head and letters obtained by The Washington Post.

An attorney for McAuliffe’s campaign wrote to WUSA-TV Channel 9 on Monday urging the station to cease running an ad sponsored by the Ending Spending Action Fund because, the campaign says, the ad falsely suggests that McAuliffe had business ties to a company headquartered in a Cayman Islands investment fund.

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The McAuliffe campaign, in a letter written by attorney Marc E. Elias of the firm Perkins Coie, says the purported link between McAuliffe and the Caribbean-based Leaf Clean Energy had mistakenly appeared on McAuliffe’s Web site but has since been removed. The letter says no such link exists between McAuliffe and Leaf Clean Energy and cites FCC licensing requirements and laws against false advertising in urging the TV station to cease airing the ads.

Brian Baker, president and general counsel for the Ending Spending Action Fund, said this week that his group stands by the assertions in the advertisement. Baker said state corporation records and cached screen images pulled down from the Web site of McAuliffe’s own business back up the super PAC’s claims.

“I am more than happy to pull this ad down and apologize to Mr. McAuliffe if he releases eight years of tax returns to show that he had no business interests in the Cayman Islands,” Baker said Monday by telephone. He said the campaign also has written to WTTG-TV in Washington, D.C. and WRLH-TV in Richmond.

The super PAC’s ad says McAuliffe had business ties to Leaf Clean Energy, a fund that is headquartered in the Cayman Islands and invests in renewable energy. Baker said McAuliffe’s own Web site once contained a self-professed connection to the Caribbean fund that now points up his hypocrisy for attacking 2012 GOP presidential candidate Mitt Romney for possibly receiving income from offshore tax shelters and refusing to release his income tax return. McAuliffe has released summaries of recent tax returns but not the returns themselves.

A call to Elias seeking comment wasn’t returned. Messages left with station managers at WRLH-TV in Richmond and WUSA-9 and WTTG-TV in the District also weren’t immediately returned.

“This is a false ad about a company Terry has never had any involvement with whatsoever,” McAuliffe campaign spokesman Josh Schwerin said. “With Ken Cuccinelli floundering in the polls and running out of options, it’s no surprise that his extreme allies are resorting to desperate lies to try to prop up his failing candidacy.”

A Washington Post poll released Tuesday shows McAuliffe has taken a lead over his Republican opponent, Virginia Attorney General Ken Cuccinelli II, in a bitter race dominated by negative advertising.

Ending Spending Action Fund was founded and is largely funded by Todd Ricketts, whose family made a fortune founding Omaha-based stock brokerage TDAmeritrade. The first portion of the super PAC’s ad attempts to cast McAuliffe as a carpetbagger. The ad tells viewers that McAuliffe considered running for governor in New York and Florida before deciding to run in Virginia – an assertion not disputed in the letters from McAuliffe’s attorney.

Though Leaf Clean Energy officials have said McAuliffe has never been connected to the firm, Baker said McAuliffe himself claimed such a connection when he was eager to demonstrate that he was putting together a group of investors to start a wood pellets business, Franklin Pellets, on the site of the shuttered International Paper mill in Franklin.

Elias, the attorney representing McAuliffe’s campaign, says in his letter that the cached Web pages amounted to a “typo” that has since been corrected. Elias also notes that Jim Potochny, Leaf Clean Energy’s chief financial officer, stated earlier this year that McAuliffe has never had a commercial tie to Leaf Clean Energy and that the firm has no involvement in Franklin Pellets.

Baker cited documents posted on McAuliffe’s own Web site earlier this year to bolster his assertion that the former Democratic National Committee chairman claimed a business connection to Leaf Clean Energy. Baker said McAuliffe touted his ties to Leaf Clean Energy for two years until the association became politically inconvenient. Now, Baker said, McAuliffe is working hard to disassociate himself from the firm.

The super PAC president, citing current Virginia State Corporation Commission records, noted that McAuliffe is the registered agent for Capital Management International (CMI), a company headquartered at his home in McLean that invests in renewable energy. Cached Web pages also show that Leaf Clean Energy Co. was listed on CMI’s Web site among “Partners/Affiliates” as recently as July, Baker said.

“His CMI Web site – the company that’s headquartered in his living room -- that company held out LEAF Clean as its business affiliate,” Baker said.

According to the super PAC, CMI’s “About Us” section also listed McAuliffe and Peter O’Keefe as CMI’s principals. O’Keefe is a director on Leaf Clean Energy’s board. O’Keefe is also a friend and advisor to McAuliffe. They are also business partners in Franklin Pellets, a venture that attempted to produce wood pellets and ship them to Europe but has so far not gotten off the ground. O’Keefe also did not respond to a request for comment.

McAuliffe and O’Keefe were both reported in local newspapers as saying Leaf Clean Energy was part of their group of investors seeking to take over part of the International Paper plant. McAuliffe, O’Keefe and the campaign’s attorney said those news reports — which appeared in the Daily Press and the Tidewater News in Hampton Roads — were mistaken.

Baker, citing cached Web pages, said McAuliffe had posted those news reports on his company’s Web site until a few months ago. The super PAC also argued that removal of Leaf Clean Energy was not a “typo” but an intentional scrubbing of inconvenient information.

“The letter from Mr. McAuliffe’s counsel is a desperate attempt to conceal his questionable business background in the lead-up to the election, and to intimidate television stations and outside advertisers,” James E. Tyrrell III, an attorney for the super PAC, wrote in a letter to the stations defending the ads.

Added Baker: “I think the fact that they’re trying to bully the stations and groups trying to exercise their First Amendment rights, shows the kind of governor he would be.”

An e-mail to the super PAC late Tuesday from Steven Genett, general manager at WRLH-TV in Richmond, said that after review by its legal counsel, the ad would remain on the air. The ad is part of Ending Spending Action Fund’s first $200,000 ad buy in the Northern Virginia and Richmond markets.

 
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