McAuliffe says he didn’t know SEC was investigating his former company


Democratic gubernatorial candidate Terry McAuliffe campaigns at George Mason University in May. (Linda Davidson/The Washington Post)
August 3, 2013

Terry McAuliffe, the Virginia gubernatorial candidate, issued a statement Saturday saying he had no prior knowledge of a Securities and Exchange Commission investigation of his former company, GreenTech Automotive — and he criticized a Republican senator who has focused on the firm.

The statement is the first formal comment directly from McAuliffe about the inquiry since The Washington Post learned of it last week while reviewing hundreds of documents obtained by congressional investigators.

The documents show that the SEC is examining the way in which the car company and a sister firm, Gulf Coast Funds Management, solicited the participation of foreign investors, mostly Chinese citizens seeking to enter the United States.

“I left GreenTech in early December of 2012 to focus full time on running for Governor,” McAuliffe said. “The first I learned of this investigation was earlier this week when the Washington Post reached out to my campaign.”

GreenTech has sought overseas investors through the federal EB-5 Visa Program, which allows foreign nationals to enter the United States if they agree to invest at least $500,000 to create jobs.

“I find it unfortunate that a Republican Senator from Iowa — who has a long history of support for the EB-5 program — selectively released information for the purpose of partisan attacks instead of getting facts,” McAuliffe said in the statement.

The program had strong support from both parties since it was approved by Congress two decades ago. In recent years, the SEC and other government agencies have stepped up oversight of the investment for visas plan.

Sen. Charles E. Grassley’s staff confirmed Saturday that the senator has been supportive of the EB-5 program for its promise to create jobs. “But when documents from whistleblowers reveal national security concerns and questionable projects that do little for the economy are being approved, there are a lot of reasons to ask questions,” a statement from Grassley’s office said.

In his statement, McAuliffe said he favored a thorough review. “If there are concerns as to whether procedures were properly followed, those concerns should be examined and I’m glad the company said it is cooperating fully.”

The Post first reported that GreenTech and Gulf Coast received subpoenas from the SEC, a sign that a formal inquiry by the agency had begun. Government documents show that subpoenas were sent in May to Gulf Coast, which is run by Anthony Rodham, brother of former secretary of state Hillary Rodham Clinton. Gulf Coast and GreenTech share the same office address in McLean.

GreenTech issued a news statement Saturday confirming that the firm had received an SEC subpoena but said that it had arrived July 12, not in May.

Both firms pledged to cooperate with the SEC.

Ben Pershing contributed to this report.

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