Former Democratic National Committee Chairman Terry McAuliffe hopes to be the next governor of Virginia, but first, he may have to contend with a Securities and Exchange Commission probe into GreenTech Automotive, a startup electric car company he co-founded and previously ran.
According to the Washington Post, GreenTech is under investigation for its conduct in soliciting foreign investors, particularly on alleged claims that it "guaranteed returns" on investments. The full depth of the SEC probe is not yet known.
GreenTech sought those investors through its "sister company", Gulf Coast Funds Management, which helped issue special visas under a Dept. of Homeland Security program to foreigners provided they contribute at least $500,000 to create U.S. jobs in struggling areas.
That company has also drawn SEC scrutiny over claims that it duped these investors while taking their money and "selling visas." Adding to the drama is the fact that Gulf Coast is run by Anthony Rodham, brother of Hilary Rodham Clinton, as well as McAuliffe's own political connections.
Back to GreenTech, for now. McAuliffe launched the company after losing the Virginia governor's race in 2009 to try and bolster his job creator credentials. GreenTech was originally a Chinese corporation that McAuliffe and his partners purchased.
He said last year that he hoped to build 10,000 of the electric, Smart Fortwo-sized runabouts called "MyCar" at a new plant in Horn Lake, Mississippi in 2013. The MyCar was to cost $18,000 apiece, but only a few have been built. The company received $5 million in loans from the state of Mississippi.
According to ABC News, GreenTech says they are working on a new production facility in Tunica, Mississippi, which they say will produce a new electric sedan with help from "a leading Chinese automotive manufacturer." They say they intend to produce 30,000 cars annually.
As the Post notes, McAuliffe resigned from GreenTech in December 2012, though he didn't mention that fact for months, and he rarely talks about the company on the campaign trail. McAuliffe denied any knowledge of an investigation.
Besides the SEC probe and their ties to Gulf Coast, GreenTech is also under fire for possibly receiving special treatment from top U.S. immigration official, Alejandro Mayorkas. Mayorkas has denied any wrongdoing.
The issue is something that McAuliffe's GOP gubernatorial candidate Ken Cuccinelli II has seized on during the campaign trail. Again from the Post:
“Instead of coming forward and addressing this matter head on, McAuliffe has refused to provide Virginians answers on a list of questions that is only growing longer and more serious by the day. . . . Virginians deserve answers and deserve them right now,” Cuccinelli said in a statement.
So the GreenTech issue could get pretty ugly for McAuliffe. Given who ran Gulf Coast, it could also be potentially bad news for Hilary Clinton, a strong contender to run for president in 2016.
Either way, it's something we'll be keeping an eye on.
Photos credit AP