This investigation could fizzle… or it could have big repercussions:

President Barack Obama’s nominee to be the Homeland Security Department’s No. 2 official is under investigation over alleged intervention to obtain approval for a company run by a brother of Hillary Clinton to participate in a program that provides U.S. visas for foreign investors, according to an email the department’s inspector general sent to lawmakers Monday night and obtained by NBC News.

The investigation into Alejandro Mayorkas – who currently serves as director of U.S. Citizenship and Immigration Services (UCIS), an agency within Homeland Security – was opened in September 2012 based on a referral from an FBI counterintelligence analyst, according to the email. The inspector general probe was first reported by The Associated Press.

“At this point in our investigation, we do not have any findings of criminal misconduct,” the email from the Homeland Security inspector general states. “We are unaware of whether Mayorkas is aware that we have an investigation.”

The probe is based on allegations that Mayorkas personally intervened to win an approval for Gulf Coast Funds Management, a financing company headed by Clinton’s brother Anthony Rodham, after USCIS officials rejected its application, according to an aide to GOP Sen. Charles Grassley, who had received internal USCIS emails about the matter from a department whistleblower.

If Gulf Coast Funds Management sounds familiar, it’s because one of its clients is its client is… GreenTech Automotive, the electric car company that Virginia Democratic gubernatorial candidate Terry McAuliffe headed up until recently. (UPDATE:  According to Gulf Coast Funds Management’s Form I-924A filed with the U.S. Customs And Immigration Services, GreenTech is GCFM’s only client. This was the case back in 2009, too. )

Let’s walk through this slowly. Gulf Coast Funds Management is a Regional Center, meaning a government-approved private organization that aims to help economic growth in a particular geographic area and that is authorized to line up foreign investors with application slots for federal EB-5 visas.

Congress created the federal EB-5 program in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. To qualify, a foreigner must invest at least $1 million, or $500,000 in either a rural area or an area with high unemployment. The investment must “create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years.” The government makes 10,000 EB-5 visas available each year, with 3,000 administered through the Regional Centers. According to one advocate for the program quoted in the Memphis Commercial Appeal, three out of every four visa recipients come from China.

It would be wrong and false to say that a Regional Center sells U.S. visas, or that there is any court-admissible evidence that its actions or its clients’ actions constitutes a visa-for-sale-scheme. (Hello, GreenTech Autmotive lawyers contemplating a libel suit, like the one you filed against the Franklin Center! Notice the careful wording in that previous sentence!) Nonetheless, at least two Virginia state officials examined GreenTech Automotive’s proposals and reacted with great skepticism:

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. 

While the Regional Centers are not allowed to sell the U.S. visas, 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.”

Gulf Coast Financial Management needed approval from USCIS to expand its regional center to include Tennessee and Virginia parts of “Project Mastiff,” GreenTech Automotive’s plan to manufacture parts in Virginia, build a warehouse facility in Tennessee, and build an assembly plant in Mississippi. The effort to reverse that initial rejection appears to be connected to the inspector general’s investigation into “alleged conflicts of interest, misuse of position, mismanagement of the EB-5 program, and an appearance of impropriety by Mayorkas and other USCIS management officials.”

While  Alejandro Mayorkas is still being investigated, we know McAuliffe was also making efforts to get the Department of Homeland Security, urging them to get U.S. Citizenship and Immigration Services, urging them to reverse their decision on Gulf Coast Funds Management. Terry McAuliffe, in December 2010, writing directly to Janet Napolitano. Watchdog.org noted that McAuliffe was insisting to DHS that the EB-5 funding that their decision impeded was “crucial” to his company , while telling the public “we are in great shape financially.”

And according to NBC News’ report,  DHS officials acknowledged that the politically-connected McAuliffe and his allies were pushing hard for the decision to be reversed:

In a letter to Homeland Secretary Janet Napolitano released Tuesday night, Grassley asked for details about the department’s handling of the company’s application and quoted from an internal agency email about Gulf Coast describing it as a “politically…well connected company” and noting the involvement of Rodham and McAuliffe. However, the author of the email — who is not identified — added after noting the firm’s political connections, “not that I think it matters because it shouldn’t impact how we do our job.” 

Again, the Inspector General could conclude that nothing illegal occurred. We’ll just have to wait and see.

And wonder if the investigation will be resolved before November of this year.

From the last Morning Jolt until July 1:

Oh, Terry.

McAuliffe is at it again, hoping you don’t pay any attention to anything but what he says.

While McAuliffe is viewed by many as an entrepreneur and businessman, the Republican campaign has been quick to point out two of McAuliffe’s ventures, GreenTech and new energy firm Franklin Pellets, have shown sluggish growth.

McAuliffe conceded the businesses haven’t taken off as rapidly as he’d hoped during a visit to nearby Loudoun County on June 14.

“I’ve been involved in starting two very 21st-century innovative businesses. They’re both start-ups. They’re both successful today at different elements in what they’re doing. They take time, maybe they take longer than we’d hope,” he said.

Define “successful.”

An upstart electric car company made the promise of providing hundreds of new jobs in North Mississippi almost one year ago. Taxpayers helped foot the bill to land Greentech Automotive, and now they want a return on their investment.

When a company commits to creating hundreds of jobs, it gets people’s attention.

Now model cars are gone from outside of the plant. The only evidence Action News 5 investigators found of any electric car production were a couple of cars whizzing around the parking lot after our crew started filming.

Based on last year’s announcement this facility should be booming by now.

For months, the Action News 5 Investigators asked to get back inside Greentech to see the operation and the Mid-Southerners hired to fill those promised positions. Greentech Vice President Marianne McInerney denied our requests each time, but share 78 employees worked inside.

Ryan Nobles of NBC’s Richmond, Va., affiliate is definitely a reporter to keep an eye on in this governor’s race. First he and his colleagues did a fantastic, fair, tough report on GreenTech Automotive and the plant that it built in Mississippi, and now he has a ten-minute on-camera interview with Terry McAuliffe about his car company.

The interview begins with some top-shelf “word salad” in response to a direct question:

Nobles: If you had to pin down one reason why the company ended up moving to Mississippi instead of starting a manufacturing plant in Virginia, what would you pin as the primary reason for that happening?

McAuliffe: Uh, listen, we tried to put it in Virginia, we had several meetings here. It is what it is. It didn’t work out here. Businesses have to make a decision based upon their own business plans, what they want to do. Every business is unique. We tried, we looked at it, but businesses have got to make decisions what they think their own best interest [sic].

Notice that nothing in that answer says why the company settled in Mississippi. McAuliffe goes on to say, “I never blamed Virginia at all” for the decision to base their operations in Mississippi, but back in December, McAuliffe said, “We wanted to, it was their decision, VEDP, they decided they didn’t want to bid on it.”

Back in December, addressing Virginia reporters, McAuliffe appears to say “we have a thousand employees.” (About 40 seconds into this video; perhaps he means he would like to have a thousand employees.) Earlier this month, Marianne McInerney, a GreenTech vice president, told the Washington Post “the company employs about 10 employees in McLean and 78 in Mississippi.”

You’ll also hear McAuliffe say, “I want a governor who has tried many different things in the field of business.” Funny how that sort of expectation didn’t seem to come into play in the presidency, considering McAuliffe’s strong support for Bill Clinton, Hillary Clinton, and Barack Obama, none of whom “tried many different things in the field of business.”

Finally, McAuliffe says he owns a car that is currently parked at GreenTech headquarters. Apparently he once claimed he drove it from his home in McLean to GreenTech’s headquarters in Tyson’s Corner. Presuming McAuliffe takes Route 123, his MyCar’s top speed is in fact the speed limit, 35 miles per hour.

Over on the home page, I have a look at Terry McAuliffe’s (former, as of December) firm, GreenTech Automotive, and their libel suit against the Franklin Center and Watchdog.org.

GreenTech Automotive makes the “MyCar.”

MyCar is a Neighborhood Electric Vehicle in the US, but can be adapted to 45mph for in 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.

The GreenTech web site showcases the car in the plant:

The MyCar comes in eight colors: Hello, Atomic, Crush, Race, Mist, Rally, Electric, and Mystic. To the untrained eye, those colors resemble light yellow, darker yellow, purple, red, gray, green, blue and white.

The Republican Party of Virginia is having some fun this afternoon.

Here’s Terry McAuliffe in September 2011, discussing Solyndra on a Virginia-based public television program:

McAuliffe says, “I’m proud to always say of all my businesses and the one I’m doing now with the auto, I do it all with private capital. I use my own money and investor money, I just don’t want the government in my business.”

Strangely enough, that’s the exact month that McAuliffe’s company, GreenTech Automotive, accepted a $3 million loan from the Mississippi Development Authority, acting on behalf of the state of Mississippi. The contract can be found here. Separately, the MDA loaned another $2 million to Tunica County to purchase the site for the factory.

Terry McAuliffe’s car company, GreenTech Automotive, is suing the investigative-journalism nonprofit Watchdog.org for libel, seeking $85 million in damages.

“Specifically, as a direct and express result of the articles published by Defendants … investors are wavering in their commitment to provide $25 million in investments already promised to GTA,” the lawsuit said. “GTA … intended to raise $60 million in capital, (and) is now in significant danger as a direct result of the loss of investor confidence in GTA arising from the publication of Defendants’ articles.”

Watchdog.org cited the same documents I did yesterday, with one difference; they quoted an expert who used the term “fraud.”

From Watchdog.org:

Attorneys for GreenTech have contacted us and asked for a retraction of our April 1 and April 3 articles. In particular, they object to the use of the term “fraud” in our reporting. Lest there be any confusion about the point of our articles, we have updated them. To be clear, our articles were not intended to (and did not) accuse GreenTech of committing fraud. Instead, the articles pointed out that the federal EB-5 visa program — which trades U.S. green cards for business investments and which GreenTech has used as a source of capital — has lax oversight, is prone to abuse and fraud, and cannot possibly deliver on its promises to taxpayers and investors. Our articles also quoted sources who criticized GreenTech’s reliance on the EB-5 program — the same criticism that Virginia officials leveled against the company in 2009. We stand by our reporting about the EB-5 program and will continue to investigate this important story. — Editors

If you had a cynical mind, what would you suspect about this lawsuit?

If you wish to help out the good folks at the Franklin Center and Watchdog.org, you can do so here.

UPDATE: GOP lieutenant-governor candidate Pete Snyder moved fast, issuing the following statement regarding the decision by Terry McAuliffe’s GreenTech to sue Watchdog.org over a blog post:

No one should be surprised that Terry McAuliffe and his sputtering company are blaming their business failures on a non-profit organization for scrutinizing their mismanagement. It’s exactly the kind of thing you’d expect from a Washington insider. Thanks to an amazing team, I’ve been able to build two very successful businesses based in the Commonwealth and create hundreds of good-paying Virginia jobs. I’ve also raised capital and dealt with investors — and trust me, it’s not a blog post that scared investors from GreenTech, it’s McAuliffe’s mismanagement and the fact that GreenTech hasn’t lived up to his hype or created the jobs and cars he promised. Terry is out of his league playing CEO, and clearly he would be out of his league trying to play Chief Executive of Virginia. Just like Terry’s lost investors, Virginia voters see Terry’s management skills as a risky investment.

I wonder if GreenTech’s lawyers will sue over that.

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.

In Virginia’s gubernatorial race, Republican Ken Cuccinelli’s campaign is making a big deal about one of Terry McAuliffe’s companies, GreenTech Automotive.

In 2009, electric-car company GreenTech Automotive decided to locate its manufacturing plant in Mississippi instead of Virginia — pledging to bring at least 1,500 jobs to that state.

Asked why McAuliffe’s company picked Mississippi instead of Virginia, the Democratic candidate contended that officials at the Virginia Economic Development Partnership — the state’s business recruitment agency — weren’t interested. “They decided they didn’t want to bid on it.”

PolitiFact Virginia extensively reviewed the state records and came to the opposite conclusion:

Records showed VEDP staff were interested in the project and were in the process of its due diligence when GreenTech moved ahead with a plant in Mississippi.

VEDP had “grave concerns” about GreenTech’s business plan. The agency said GreenTech Agency officials had no “demonstrated experience” in manufacturing cars. It doubted the company’s job estimates. It questioned the ethics of GreenTech’s plan to raise money from foreign investors in exchange for U.S. residency.

The record shows that VEDP asked GreenTech to address its concerns and waited in vain for replies. Without those answers, VEDP would not negotiate monetary support for that, or any, project.Contrary to McAuliffe’s claim, there is no evidence the state agency decided not to bid on the project.

Emails show VEDP took GreenTech officials on a tour of potential sites and contacted the company about coming to Virginia almost two years after GreenTech announced it was building a plant in Mississippi.

We rate McAuliffe’s statement False.

The topic may or may not turn out to be a big deal in the year ahead, but McAuliffe was asked about it and is now offering a new spin — it wasn’t his fault, somebody else made the decision.

“They made the decision, the company made the decision,” McAuliffe told a radio host Friday.

McAuliffe must be the most strangely powerless chairman of a company ever.