In Virginia election year, accountability is lacking
RICHMOND — If you’re feeling that those who govern Virginia or aspire to govern in coming months are less than forthcoming, you’re not alone. Candidates in both parties and the governor they hope to succeed have had accountability about their finances and business dealings forced upon them the past five months by journalists.
First, there was Democrat Terry McAuliffe. He claimed in December that Virginia didn’t want to bid on his company’s prospective electric car factory. That’s relevant because Mr. McAuliffe, a former Democratic National Committee chairman and former master fundraiser for Bill and Hillary Clinton, is running for governor as a job-creation maven whose politics are moderate and business-friendly.
“That’s their choice,” Mr. McAuliffe said in suggesting in December that Virginia gave GreenTech the brush-off. “Other states — I think Alabama, South Carolina, Mississippi — have a very aggressive (effort) to bring manufacturing in. Obviously, Virginia was my first choice.”
Turns out his company, GreenTech Automotive, didn’t get Virginia incentives because it raised as many questions for Virginia economic development officials under two governors — a Democrat and the incumbent Republican — as it answered.
More than 600 pages of documents, e-mails and records obtained in December under the Freedom of Information Act show Virginia officials were interested, often perplexed and ultimately wary of Mr. McAuliffe’s fledgling enterprise and its financing.
A major strategy for enticing large overseas investments, principally from China, was a federal program known as EB-5 that grants permanent U.S. residency for every $1 million of foreign capital, or $500,000 in economically struggling areas. From the start, GreenTech officials urged Virginia officials — including Democratic former Gov. Tim Kaine — to implement the program. Just as quickly, VEDP officials became skeptical.
“This company is a complete start-up venture and it appears the management team has no previous experience in automotive manufacturing,” VEDP’s Mike Lehmkuhler wrote in a Sept. 10 email to Patrick Gottschalk, then Mr. Kaine’s secretary of commerce.
The irrepressible Mr. McAuliffe was undeterred. For the opening of GreenTech’s Horn Lake, Miss., plant last summer, he brought in two old Washington A-List buddies: former President Bill Clinton and former Mississippi Gov. and Republican National Committee Chairman Haley Barbour. Mr. McAuliffe was still touting GreenTech’s economic development prowess in early December with reporters.
In July 2011, Star Scientific, a struggling nutritional supplement maker that had started as a tobacco company, sued Virginia disputing $700,000 in taxes the state Department of Taxation says the company owes. In March, the Associated Press reported that Mr. Cuccinelli allowed his office to handle the case even though Star Scientific is the lone company in which he holds stock and even though he had received about $13,000 in gifts from the company’s CEO, Jonnie Williams.
The story had added resonance because Mr. Cuccinelli had defied a tradition observed by six Virginia attorneys general since 1985 who had resigned as the state’s top lawyer and chief law-enforcement officer to run full time for governor. Then there were further disclosures by The Washington Post that Mr. Cuccinelli had bought additional stock in Star Scientific while his office was battling the company’s legal action in court.
Mr. Cuccinelli vehemently dismissed any suggestion that his actions constituted a conflict of interest, but on April 4, recused his staff from the Star Scientific lawsuit and turned it over to a private law firm.
Star Scientific is also the subject of a federal securities probe.
The past month brought the most nettlesome tangle of conflicts yet, involving the Executive Mansion and inviting unflattering scrutiny of Gov. Bob McDonnell and the first family and the gifts received from a major campaign contributor.