Not long before he became governor of Virginia, Democrat Terry McAuliffe received special treatment on behalf of his electric-car company from a top official at the Department of Homeland Security, according to a new report from the department’s inspector general.
McAuliffe was among several politically powerful individuals from both parties, including Sen. Harry M. Reid (D-Nev.), seeking special visas for foreign investors through a program administered by the department. But intervention on behalf of McAuliffe’s GreenTech Automotive company by Alejandro Mayorkas, now the department’s No. 2 official, “was unprecedented,” according to the report.
The long-anticipated report found no evidence of law-breaking. But members of the department’s staff perceived Mayorkas’s actions as “politically motivated,” and the report concluded that he had “created an appearance of favoritism and special access.”
The report is likely to stir up renewed scrutiny of the department’s management of the EB-5 visa program, which allows foreign nationals who create jobs in the United States to obtain green cards. And it is likely to rekindle examination of McAuliffe and GreenTech, which at the time of Mayorkas’s actions was under investigation by the Securities and Exchange Commission over its conduct in soliciting foreign investors.
Initially popular with lawmakers from both parties, the visa program has prompted accusations from detractors that it puts visas up for sale — and doesn’t provide sufficient oversight to ensure that the promised jobs materialize.
Homeland Security Secretary Jeh Johnson expressed full confidence in Mayorkas following the report’s release Tuesday afternoon. But in his statement, Johnson called for a new internal “protocol” for future decision-making in the visa program.
The report focuses primarily on Mayorkas’s actions between 2010 and 2013, when he led the department’s Citizenship and Immigration Services (USCIS) agency. It also provides extensive details of Mayorkas’s dealings with McAuliffe and GreenTech, the electric-car manufacturing firm that McAuliffe owned at the time.
McAuliffe’s company had partnered with Gulf Coast Funds Management, a firm that specializes in obtaining EB-5 visas for investors. Gulf Coast was led by Anthony Rodham, brother of then-Secretary of State Hillary Rodham Clinton.
McAuliffe and Gulf Coast were seeking a faster review of his firm’s request for more than 200 visa approvals that he thought were moving too slowly. Like many others, he was distressed with delays in the program. Unlike most others, his complaints got top-level attention at the department.
Mayorkas called a staff meeting to convey his disagreement with a decision to reject Gulf Coast’s petition, according to the report. That, in turn, allowed McAuliffe to push ahead for the visa approvals, some of which have since gone through.
McAuliffe resigned his position with GreenTech in late 2012 but continued to complain into 2013, when he was running for Virginia governor. He responded to the report Tuesday through spokesman Brian Coy: “This report demonstrates that Governor McAuliffe, along with many other individuals and businesses, asked DHS to fulfill its obligation to adjudicate the applications that were before them in a timely fashion.”
In an extended response included in the report, Mayorkas described McAuliffe as persistent and even belligerent as he objected to actions taken by lower level staff in the department, who balked at requests to approve some visas.
“I recall that over the course of many months I received several voice messages from Mr. McAuliffe complaining about USCIS’s handling of the . . . case. The messages were caustic. I remember in particular one voice message that I played, as it was laced with expletives at a high volume. I recall one occasion on which Mr. McAuliffe complained to me directly over the telephone.”
Efforts to reach both GreenTech and Gulf Coast were not immediately successful.
Mayorkas’s handling of the EB-5 program was questioned publicly in 2013, when he was under consideration for the No. 2 spot at the Department of Homeland Security. Half a dozen whistleblowers had complained to the inspector general and to Sen. Charles E. Grassley (R-Iowa) in 2012 and 2013 about favoritism in the granting of the visas. After contentious hearings, Mayorkas was confirmed in December 2013.
Tuesday’s report noted the upsetting effect that Mayorkas’s interventions had on the department’s staff members, who were concerned about politicization of the process and about possible security issues. The report drew no conclusions about Mayorkas’s motivation for the intervention.
In addition to the case involving McAuliffe’s car company, the inspector general focused on actions Mayorkas took on behalf of a film project in Los Angeles that was backed by former Pennsylvania governor Ed Rendell, and on the construction of a casino in Las Vegas supported by Reid, who was Senate majority leader at the time.
Mayorkas told investigators that in all of those cases, “he intervened to improve the EB-5 process or to prevent an error,” the report said.
Kristen Orthman, a spokeswoman for Reid, said Tuesday that the casino project created thousands of jobs. “Senator Reid considers it part of his basic responsibility as Nevada’s senator to ensure that projects that benefit Nevada get fair and timely consideration from the federal government,” Orthman said.
A request seeking comment from Rendell was not immediately successful.
Mayorkas issued his own statement Tuesday promising to absorb lessons from the experience.
“While I disagree with the Inspector General’s report,” he said in the statement, “I will certainly learn from it and from this process. I appreciate and embrace Secretary Johnson’s decision to create a new protocol to ensure the EB-5 program is free from the reality or perception of improper outside influence.”
In the case of GreenTech, department staff had highlighted “a number of flaws” in an application to allow Gulf Coast to sponsor the GreenTech plans to build an electric-car factory in Mississippi. Adjudicators wrote that “the case is not approvable as filed.”
The report provides new details on the pressure applied by McAuliffe. It said that on Dec. 15, 2010, McAuliffe wrote a letter to DHS Secretary Janet Napolitano complaining about the denial of Gulf Coast’s request and asking for her assistance to speed consideration of the more than 200 investor petitions.
In addition to McAuliffe, Mississippi Republicans also pressed DHS officials for more rapid approval of the visas.
The report, based on 50 interviews and a review of 1 million e-mails and related files, drew a mixed response from Congress.
Republicans expressed concern over the allegations, which Grassley labeled “disturbing.” Rep. Michael McCaul (R-Tex.), chairman of the House Homeland Security Committee, quickly scheduled a hearing for Thursday at which the inspector general will testify.
Democrats focused on the report’s inconclusive nature. “The Inspector General provided no definitive determination of wrongdoing and instead found that Deputy Secretary Mayorkas’ hands-on and reform-minded leadership style may have been misinterpreted,” Rep. Bennie Thompson (Miss.), the top Democrat on the House Homeland Security Committee, said in a statement. The ranking Democrat on the Senate Homeland Security Committee, Sen. Thomas R. Carper (Del.), lauded Mayorkas in a statement as someone who “has worked tirelessly to change the Department for the better.”
Mayorkas was criticized in the 1990s for his role in President Bill Clinton’s commutation of the prison sentence of the son of a Democratic Party donor from California. Mayorkas testified in 2009 that “it was a mistake” to talk to the White House about the commutation request for Carlos Vignali.
In his role as deputy secretary, Mayorkas has broad responsibility in the department, including overseeing a recent review of the operations of the Secret Service and advising its new director during a newly launched congressional investigation of the agency.
On Tuesday, Mayorkas allies around the country came to his defense.
“He was a stellar partner. I trust him absolutely; impeccable integrity,” said A.B. Culvahouse, former counsel for President Ronald Reagan who worked with Mayorkas at a prestigious Los Angeles-based law firm. Culvahouse chaired the firm at the time. He called the allegations “much ado about nothing. Having served in government — people finding appearance issues where they have found no bad conduct is always a cheap shot that can be taken.”
“I would take him right back today, and any other partner in the firm would,” he said.
Laura Vozzella contributed to this report.