McAuliffe is tied to executive of Chinese firm accused of spying; senator demands answers on visas

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A businessman seeking to invest in the sister firm of Virginia gubernatorial candidate Terry McAuliffe’s former green car company in exchange for U.S. legal status is a top official at Huawei Technologies Co., a Chinese telecommunications giant recently accused of spying.

The disclosure came in documents released Wednesday by Sen. Chuck Grassley, Iowa Republican, who is demanding answers about the federal EB-5 program, under which people can invest $500,000 to $1 million in certain U.S. companies are rewarded with visas and, potentially, citizenship.

PHOTOS: Eye-popping excuses in American political scandals

President Obama’s nominee for the No. 2 post at the Department of Homeland Security was accused this week of ramming through a Chinese investor’s visa application on behalf of a company owned by Anthony Rodham, brother of former Secretary of State Hillary Rodham Clinton.

Alejandro Mayorkas, currently head of U.S. Citizenship and Immigration Services, is scheduled for a Thursday confirmation hearing in the Senate.

The documents released Wednesday said that as recently as March, 21 pending visa applications associated with Mr. Rodham’s company, Gulf Coast Funds Management LLC, were being scrutinized by the federal government because of fraud or national security concerns.

Gulf Coast is the fundraising arm of Mr. McAuliffe’s GreenTech Automotive Inc., and the companies share the same McLean, Va., address. Mr. McAuliffe founded GreenTech in 2009 and revealed in April that he had resigned from his role as company chairman at the beginning of December.

In a letter dated July 23 and addressed to FBI Director Robert S. Mueller III, Mr. Grassley tied the Chinese technology company, Huawei Technologies Co., to Gulf Coast.

“I have obtained e-mails which indicate that one of the investors in Gulf Coast is a vice president of Huawei Technologies Co., whose connections to Chinese intelligence have been documented by the House Intelligence Committee,” Mr. Grassley wrote.

[Corrected paragraph:] The investor was identified in an email attachment to Mr. Grassley’s report as Zhenjun (Richard) Zhang.

According to an October report by the House Permanent Select Committee on Intelligence, Huawei failed to cooperate with a yearlong investigation and to adequately explain its U.S. business interests and relationship with the Chinese government, and cautions the U.S. government and private companies in the U.S. from doing business with Huawei.

The report found Huawei “cannot be trusted to be free of foreign state influence and thus pose[s] a security threat to the United States and to our systems.” It also warned private companies “to consider the long-term security risks associated with doing business” with the company.

Huawei has denied such charges.

More seriously, former Central Intelligence Agency Director Michael V. Hayden earlier this month accused Huawei of providing sensitive information about foreign communication systems to Beijing.

“These tired, unsubstantiated, defamatory remarks are sad distractions from real-world concerns related to espionage, industrial and otherwise,” Huawei spokesman Scott Sykes said in an email reported by Bloomberg News.

Mr. Grassley also wrote a letter to Homeland Security Secretary Janet A. Napolitano this week asking her to explain in detail “the actions taken by you and your office in response to the inquiry submitted by Terry McAuliffe related to any USCIS appeal filed by Gulf Coast,” among other questions.

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