Governor unconcerned about financial obligations of GreenTech firm he founded

by WorldTribune Staff, July 17, 2017

Officials in Mississippi are demanding that an electric car company founded by current Virginia Gov. Terry McAuliffe repay more than $6 million in public funds.

In a report released on July 12, the office of Mississippi State Auditor Stacey Pickering said GreenTech Automotive did not come close to creating the 350 jobs it promised and had shrunk to about 10 employees as of early 2017.

Terry McAuliffe, then-chairman of GreenTech Automotive, and former Mississippi Gov. Haley Barbour are seen in GreenTech’s new electric car in July 12 at the company’s plant in Horn Lake, Mississippi. / AP

Pickering demanded that GreenTech pay roughly $6.4 million or risk being taken to court to allow the state to recoup its investment. That amount represents a $3 million incentive loan, a $2 million loan to allow Tunica County to buy land for the GreenTech facility, plus interest and recovery costs.

McAuliffe, a Democrat and longtime loyalist to both Former President Bill Clinton and Hillary Clinton, said his obligations with the firm ended when he left GreenTech in 2012 to run for governor in Virginia, the Richmond Times-Dispatch reported on July 13.

“I left five years ago,” McAuliffe said. “The plant was there before I got there. The new plant was done after I left. So I’m sorry. I left a long time ago. Had nothing to do with building at any of the plants.”

According to the Times-Dispatch report, McAuliffe’s involvement in GreenTech featured prominently in his 2013 race for governor against Republican Ken Cuccinelli.

McAuliffe had indicated that, at some time, he hoped to locate GreenTech’s production facility in Virginia, where its corporate headquarters is still located, but Virginia economic officials passed on the project.

The economic development targets that GreenTech agreed to meet were included in a 2011 memorandum of understanding with the Mississippi Development Authority, while McAuliffe was still with the company.

The company also pledged to invest $60 million in the Mississippi project. Pickering said GreenTech did not provide the auditor’s office with full documentation on its capital investment, but the company said it had roughly 86 private investors for the project, each of whom invested $500,000 for a total of $43 million.

According to the Times-Dispatch report, GreenTech relied heavily on the use of the EB-5 visa program, which allows wealthy foreigners to obtain U.S. green cards by investing $500,000 to create American jobs in rural areas or regions with high unemployment.

To secure the $3 million loan, GreenTech identified assembly equipment and car parts as collateral, but the auditor’s report notes that several invoices for equipment purchases were dated before the Mississippi deal was signed and some of the equipment was shipped to other states.

The Mississippi auditor launched his review of GreenTech in September after the company failed to make its first loan payment last July. The report says the auditor’s office attempted to visit the facility in Tunica in November to review records “clearly under the purview” of the office, but GreenTech employees “refused to provide” them.

The report says GreenTech “failed to perform several critical requirements” of the deal. GreenTech was given 30 days to pay after the July 5 demand letter sent to GreenTech CEO Charles Wang.

In a news release, the auditor’s office said it would have no further comment on the case “due to the potential for litigation.”

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