Former GreenTech fundraising partner under federal investigation
Published: July 26,2013
One of the fundraising functions for GreenTech Automotive is under federal investigation related to President Barack Obama’s pick for the No. 2 spot at the Homeland Security Department.
Gulf Coast Funds Managament, LLC, serves Mississippi and Louisiana under the EB-5 program, which allows foreign investors to earn permanent resident visas for investing in U.S. economic development projects. Investors have to kick in a minimum of $1 million to qualify; that amount drops to $500,000 if the project is in an economically depressed area, such as Tunica, where GreenTech has plans for a facility to produce electric cars.
GreenTech started building the MyCar, a neighborhood electric vehicle, in Horn Lake last year. The company said last week that construction in Tunica has entered its second phase, which GreenTech was the main building phase.
It will include the construction of GTA’s manufacturing facility, offices and meeting space, and will run through the end of this year. Production is scheduled to start by April.
“After more than a year of planning, testing and site preparation, we are excited for GreenTech’s permanent home to start taking shape in Phase 2,” said Charles Wang, GreenTech chairman and CEO of GTA. “The new facility is being designed for a production capacity of 30,000 vehicles per year. We are looking forward to completing the new facility early next year and continuing to create new jobs in northern Mississippi.”
GreenTech has until the end of 2014 to create a minimum of 350 jobs at its Tunica facility, per the terms of a $3 million loan the Mississippi Development Authority made the company in 2011.
The Tunica news was met with skepticism by opponents of Terry McAuliffe, Virginia’s Democratic gubernatorial nominee who served as GreenTech president until late last year.
The Associated Press in Virginia reported that Obama’s pick for the Homeland Security Department’s No. 2 spot, U.S. Citizenship and Immigration Services director Alejandro Mayorkas, is under investigation for his role in helping a company run by Hillary Rodham Clinton’s brother, Anthony Rodham.
That company, Gulf Coast Funds Management, LLC, is among hundreds of “regional centers” involved in the EB-5 program. Gulf Coast Funds, based in McLean, Va., worked closely with GreenTech when McAuliffe was its chairman.
Republican gubernatorial nominee Ken Cuccinelli and McAuliffe are in a tight race that has become increasingly heated. Last week, Cuccinelli narrowly trailed McAuliffe in a poll conducted by Quinnipiac University. Cuccinelli has had to confront similar ethics questions over ties to nutritional supplements maker Star Scientific and its chief executive, Jonnie R. Williams Sr. The Virginia AP reported that Williams has given $18,000 in personal gifts to Cucinelli.
Cucinell, currently Virginia’s attorney general, told the AP earlier this week that McAuliffe needs “to come forward and answer questions about this serious matter. Virginians deserve to know the truth about McAuliffe and GreenTech’s potentially inappropriate solicitation of EB-5 visas.”
McAuliffe’s campaign spokesman Josh Schwerin said McAuliffe is not a target of the investigation, and “Cucinelli’s attacks are an attempt to distract from his ties to the Star Scientific scandal.”
Emails obtained by the AP show repeated efforts by Virginia Economic Development Partnership officials under Democratic and Republican governors to interest the company in rural Virginia locations, even as the officials expressed misgivings about the company’s financing plans, including its proposed use of the EB-5 program to attract Chinese investment.
The most routine users of the EB-5 program are Chinese investors. According to an undated, unclassified State Department report that the AP obtained about the program, the U.S. Consulate in Guangzhou, China, processed more investor visas in fiscal year 2011 than any other consulate or embassy.
The Associated Press contributed to this report.
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