McAuliffe’s business partners under scrutiny amid federal inquiry into GreenTech

(Rogelio V. Solis/ Associated Press ) - In this July 6, 2012, file photograph, former Mississippi Gov. Haley Barbour, left, and then-GreenTech Automotive chairman Terry McAuliffe take a drive through the plant after the unveiling of the company's new electric MyCar in Horn Lake, Miss. Today, the place where the plant was to be remains mostly vacant except for a temporary construction trailer.

(Rogelio V. Solis/ Associated Press ) - In this July 6, 2012, file photograph, former Mississippi Gov. Haley Barbour, left, and then-GreenTech Automotive chairman Terry McAuliffe take a drive through the plant after the unveiling of the company's new electric MyCar in Horn Lake, Miss. Today, the place where the plant was to be remains mostly vacant except for a temporary construction trailer.

As federal investigators probe whether top U.S. government officials gave special treatment to Terry McAuliffe’s company GreenTech Automotive, the controversy has shed light on lobbying efforts by McAuliffe and two of his Northern Virginia business partners.

One is Anthony D. Rodham, a brother of former secretary of state Hillary Rodham Clinton. The other is GreenTech co-founder and chief executive Xiaolin “Charles” Wang, a lawyer with expertise in trade law and foreign investment who said he has second thoughts about going into business with a politician.

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Much of the public scrutiny of the GreenTech investigation has centered on McAuliffe because he is running for Virginia governor this year. But the investigation has also shone a light on the company itself — and on other people associated with it, including Rodham and Wang.

The Department of Homeland Security’s inspector general has launched a preliminary investigation into whether U.S. Citizenship and Immigration Services (USCIS) Director Alejandro N. Mayorkas improperly intervened on behalf of GreenTech and other firms as they sought to raise capital from foreign investors.

Separately, the Securities and Exchange Commission is investigating the conduct of GreenTech and Gulf Coast Funds Management — a sister company owned by Wang — in soliciting foreign investors, according to government documents.

Attorney General Ken Cuccinelli II, the GOP’s gubernatorial candidate, has argued that GreenTech’s dealings fit a pattern of shady ventures by McAuliffe since his days as a top fundraiser for President Bill Clinton. McAuliffe, Cuccinelli’s Democratic opponent, has challenged the Republican’s ethics for his failure to initially report thousands of dollars of gifts from the same political donor whose largesse has tarnished Gov. Robert F. McDonnell (R).

McAuliffe has denied seeking special treatment and said he was not aware of the investigations into GreenTech until they became public. Wang and other company officials have acknowledged the SEC investigation and said they were cooperating.

Meanwhile, new details have emerged about McAuliffe’s and Wang’s efforts to lobby the DHS. In written explanations submitted to a Senate committee, Mayorkas wrote that McAuliffe had called him on several occasions as recently as this year to complain about delays.

“In early 2013, Mr. McAuliffe walked past me in a crowd and said something like, ‘Your agency is killing the project,’ and kept walking,” Mayorkas wrote. His explanations were provided by the office of Sen. Charles E. Grassley (R-Iowa), who also provided a letter he sent to the director late last week accusing him of being less than forthcoming in previous Senate testimony about his contact with McAuliffe.

Mayorkas is President Obama’s nominee to become the deputy secretary of homeland security; his nomination has stalled while his dealings with GreenTech and other firms remain under preliminary investigation.

The DHS and SEC investigations involve a 23-year-old program, known as EB-5, that grants conditional visas to foreign entrepreneurs who invest at least $500,000 in the United States. The program, which is managed by Mayorkas’s agency, permits investors to eventually receive permanent resident visas, known as green cards.

In December 2010, McAuliffe wrote to Department of Homeland Security Secretary Janet Napolitano urging reconsideration of a request by Gulf Coast Funds Management to expand its use of the EB-5 program to Virginia, where McAuliffe had been trying to create GreenTech’s manufacturing plant.

A year later, Wang and McAuliffe met with Mayorkas; Napolitano’s chief of staff also sat in. Wang said he and McAuliffe were seeking to overturn the denial of an effort to expand into Virginia. E-mails released by Grassley show that GreenTech and Gulf Coast officials also were complaining — as other EB-5 firms had done — that their business venture had been put in jeopardy by delays in the approval of dozens of foreign investors.

“Terry was the guy talking about a need to create American jobs,” Wang recalled. But Wang said the USCIS director seemed cool to McAuliffe’s pitch, which made Wang to worry that the high-level meeting might do more harm than good. It was something he had seen before in his native China, Wang said.

“If you go over a government official’s head, the government official will find more than a thousand ways to screw it up,” Wang said. “After walking out of that meeting, I didn’t feel good.”

Wang said he didn’t know who arranged the meeting. But as it wound down, Wang said, Napolitano dropped by to greet McAuliffe, who was then GreenTech’s chairman.

“They knew each other,” Wang said.

Napolitano said through a DHS spokesman that she was not involved in the planning of the meeting or the meeting itself. She also said that it was not out of the ordinary for her to visit meetings and that she did not intercede on GreenTech’s behalf in any way.

The spokesman also said it was not unusual for her chief of staff to attend meetings with stakeholders because of the importance of the agency’s work with the private sector.

Mayorkas, in testimony before Congress, acknowledged meeting with McAuliffe two years ago but denied taking any improper actions. Wang, in an interview, noted that their appeal to expand into Virginia was ultimately denied.

McAuliffe’s campaign spokesman said that McAuliffe has been very public about his unhappiness with the pace of DHS decision making. Those feelings continued even after McAuliffe left GreenTech in early December 2012, which is why he expressed his unhappiness in a personal way in 2013, said campaign spokesman Josh Schwerin.

Grassley has repeatedly challenged Mayorkas’s testimony, saying whistleblowers and agency e-mails suggest that he was involved in GreenTech’s case. A USCIS employee’s e-mail cited by Grassley complained about “political pressure” to rewrite a draft decision denying Gulf Coast’s expansion request. “Give it to me, I’ll write the [expletive] thing myself,” Mayorkas allegedly told agency employees, according to Grassley’s letter to Mayorkas.

Mayorkas has emphatically denied favoring any applicant, saying he intervened only in matters of law and policy but never out of favoritism. He also told Congress that his lack of intervention is borne out by e-mails showing that GreenTech and Gulf Coast officials continued to complain this year.

Since its founding by McAuliffe and Wang in 2009, GreenTech’s business plan has depended heavily on EB-5 financing. Gulf Coast received USCIS certification to pool foreign investors’ funds for ventures in Louisiana and Mississippi, including GreenTech. Gulf Coast is based in the same Tysons Corner complex that houses GreenTech’s corporate offices, and Rodham is its chief executive.

Wang said that McAuliffe introduced Rodham but that Wang decided to hire him because of Rodham’s experience putting together international business deals.

“The guy is very humorous. He doesn’t seem to have any ego,” Wang said. He also said Rodham agreed to work for Gulf Coast for a smaller salary than several other executives.

Rodham has been the subject of previous controversies over his political connections. For instance, in 2001, Rodham acknowledged asking Clinton to grant a presidential pardon to former employers convicted of bank fraud.

Wang said Rodham accompanied him on trips to China to open doors with investors but that sometimes Rodham’s political stature worked against them, particularly when recent tensions between the United States and China fanned lingering resentment over the Clinton administration’s bombing of the Chinese embassy in Yugoslavia.

Rodham, who lives in Vienna, has not responded to questions submitted to him through Gulf Coast general counsel D. Simone Williams.

Wang, 47, who obtained his law degree at Duke University and has worked with the EB-5 program since 2007, dismissed critics who have accused GreenTech and Gulf Coast of being a “visas for money” scheme.

“People who say that are really ignorant of EB-5,” Wang said. “You look at the EB-5 history. It created a lot of jobs and generated a lot of investments.”

Wang, who lives in Great Falls, is a majority owner — through his stake in British Virgin Islands-based Capital Wealth Holdings — of GreenTech, according to Mississippi records. Through Wang’s Virginia-based American Immigration Center, he also owns Gulf Coast, according to him and Virginia records.

Beginning in 2009, Wang and McAuliffe set up several entities using the GreenTech name, while McAuliffe focused on trying to establish a manufacturing plant in Virginia.

“He is a high-level guy,” Wang said. “He has a vision. He gave strategical inputs, but he does not really participate in daily management.”

On the advice of attorneys, he and McAuliffe have not spoken to each other since the investigations came to light, Wang said.

Jennifer B. Jenkins contributed to this report.

 
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