Over on the home page, I take a look at why Virginia officials were so skeptical about assisting Terry McAuliffe’s GreenTech Automotive back in 2009. Besides the usual risks of investment, at least two officials with the state business-recruitment agency feared the company was a “visa-for-sale scheme with potential national security implications.”
What is the purpose of GreenTech Automotive?
The company, founded by Terry McAuliffe, is now a top issue in this year’s Virginia race for governor. Until recently, the controversy over the company centered on the firm’s October 2009 decision to build a plant in Mississippi instead of Virginia. McAuliffe contended that he wanted to build a plant in Virginia, but the Virginia Economic Development Partnership (VEDP) — the state’s business-recruitment agency — wouldn’t play ball.
“We had sites, we had meetings, and they chose that they weren’t going to bid on it,” McAuliffe declared. PolitiFact looked at the paperwork and rated that assertion false, concluding that “VEDP asked GreenTech to address its concerns and waited in vain for replies.”
But internal communications from VEDP now reveal that the state agency didn’t merely think that McAuliffe’s company had a risky business model. At least two high-ranking officials actually suspected that the company’s real aim was to make money by selling U.S. residency visas to wealthy foreigners.
In an e-mail dated November 17, 2009, Liz Povar, then the director of business development at VEDP, wrote to her colleagues:
Sandi et al. Even if the company has investors “lined up”, I maintain serious concerns about the establishment of an EB-5 center in general, and most specifically based on this company. Not only based on (lack of) management expertise, (lack of) market preparation, etc. but also still can’t get my head around this being anything other than a visa-for-sale scheme with potential national security implications that we have no way to confirm or discount. . . .
This “feels” like a national political play instead of a Virginia economic development opportunity. I am not willing to stake Virginia’s reputation on this at this juncture.
The e-mails were revealed pursuant to a Freedom of Information Act request filed by PolitiFact; 79 pages of documents were posted online in January.
As I lay out in the piece, companies and the Regional Centers that work with them are not allowed to sell the U.S. visas, but they are allowed to point out that investment in their projects may qualify a foreign citizen for a residence visa, and they may appear to suggest that one directly leads to the other. For example, at the top of the website for Gulf Coast Funds Management LLC, the Statue of Liberty’s torch is next to the slogan, “Invest in your future with EB-5.”
Of course, Virginia had a lot of good reasons to be wary of giving special assistance to GreenTech:
On October 22, 2009, Mike Lehmkuhler, the vice president of business attraction at VEDP, assessed GreenTech’s hurdles in withering fashion:
The sales forecasts suggest a completely successful start-up, despite
- no brand recognition
- no demonstrated vehicle performance
- no safety and fuel economy certification from the National Highway Traffic Safety Administration
- no emissions approval from the EPA
- no established distribution network
- no demonstrated automotive industry experience within the executive management team
All of this was to manufacture a product with a quite limited market. Almost no media coverage of GreenTech mentioned the limits of the GreenTech Automotive product:
MyCar is a Neighborhood Electric Vehicle in the U.S., but can be adapted to 45mph for in [sic] Europe. NEVs are low-speed vehicles; and depending upon the state you live in are limited, by law, to 25–35 mph. No highway driving, please.