By Tori Richards and Earl Glynn | Watchdog.org
The parent company of a “green” car venture with ties to the Obama administration and Democratic Party leader Terry McAuliffe is incorporated in the tax shelter country of the British Virgin Islands, Watchdog has learned.
Yet just nine months ago McAuliffe, former Democratic National Committee chairman and part owner of GreenTech Automotive Inc., blasted Mitt Romney over allegations the presidential candidate had an offshore bank account.
“You’re running for president,” McAuliffe told the Daily Caller. “People just don’t get that. I mean, why do you have an offshore bank account? So we’ve got a long way to go.”
Fledgling GreenTech was founded in 2009 by Chinese businessman Charles Wang, who owns Capital Wealth Holdings (CWH), an investment company incorporated in the British Virgin Islands.
According to court documents, GreenTech is a subsidary of CWH and McAuliffe obtained 25 percent of the stock. GreenTech’s headquarters were then incorporated in Virginia and its manufacturing plant was located in Mississippi. Next, it started recruiting outside investors – primarily from China – through a program called EB-5 that grants visas to foreign citizens in exchange for minimum $500,000 investments in U.S. companies.
“The Chinese government has the U.S. auto industry in its cross hairs and is using every ploy possible to get into the business via U.S. politicians and struggling entrepreneurs in the ‘green car’ industry,” said economist Greg Autry, who lectures on China and authored the book “Death By China – Confronting the Dragon.”
“A company wants to be in the BVI for one reason: TO AVOID PAYING US INCOME TAXES,” Autry said in an email exchange with Watchdog.
Further, the BVI has no taxes on foreign companies that put money there; no mutual treaties with the U.S. or anyone else to report income or assets; and has a very strong tradition of client privacy and asking no questions about the source of funds, Autry added.
The British Virgin Islands is the second largest source of capital investment flowing into China, an investigation by the International Consortium of Investigative Journalists has found.
CWH and GreenTech are private companies, but Watchdog learned through public documents that a third businessman planned to pour $6.5 billion into the green car venture. Court documents state that he spent $15.6 million before a falling out that led to the lawsuit.
At one point, GreenTech had 10 billion outstanding shares of stock, which were set to be sold at a penny a piece.
A professor at Chapman University in California said it’s curious that GreenTech filed public documentation of its mergers given the companies are private.
“We can only speculate what they are trying to do,” said Fadel N. Lawandy, director of the C Larry Hoag Center for Real Estate and Finance. “It’s weird that they’re very transparent in what they are doing. What the holding companies are all about and why they are based out of the British Virgin Islands; that would be speculation.”
But the documents appear to be “very straightforward” and clear that 25 percent of GreenTech belongs to McAuliffe.
“When two companies merge together (filing a stock share exchange document) is a method” of co-ownership, Lawandy said. “We can do it in cash where I give you cash or I can give you shares. There is no real common way of doing it. “
Either way, GreenTech apparently has the funds to pay for top talent. It has employed Obama aide Rick C. Wade as its Head of China Operations. Wade was assistant chief of staff at the U.S. Department of Commerce until he quit in 2011 to serve simultaneously as spokesman for Obama’s presidential campaign and work at GreenTech.
The green carmaker’s presidential connections don’t stop with Obama. Last year Bill Clinton attended the opening launch of its Mississippi car plant and his brother-in-law, Anthony Rodham, helps solicit EB-5 funds through Rodham’s company Gulf Coast Management. Both Gulf Coast and GreenTech share an office suite.
Obama’s crusade against Romney didn’t stop with the British Virgin Islands – his lead campaign adviser Robert Gibbs questioned investments in Bermuda.
At one point GreenTech’s majority owner Charles Wang was also director of Compass Pacific Holdings, a Hong Kong company incorporated in – where else? Bermuda. One of Compass Pacific’s missions was to pursue a hybrid car project.
“It was reported that Mitt Romney has taken pretty extraordinary steps to hide the fact that he has a shell corporation in Bermuda,” Gibbs said during an MSNBC interview. “We’ve got to know why he has that money there. The American people deserve to know if he’s sheltering this money somewhere or, quite frankly, is not paying the taxes that he owes.”
Contact Tori Richards at firstname.lastname@example.org or on twitter @newswriter2.
Please, feel free to “steal our stuff”! Just remember to credit Watchdog.org. Find out more
- VA: As he runs for governor, McAuliffe wheels and deals electric cars in Mississippi
- VA: Media echo Watchdog exclusive on McAuliffe’s electric car maneuvers
- No news here: PolitFact brands Terry McAuliffe’s electric-car claim ‘false’
- Experts question source of McAuliffe car-company funding
- Terry McAuliffe on business ventures: ‘Some work, some don’t’
- How McAuliffe’s car company failed the Virginia test, landed in Mississippi
- Virginia official wants probe of McAuliffe company ‘visa-for-sale’ program
- McAuliffe car company sues Watchdog in libel claim
- Barack Obama’s GreenTech connection: Rick Wade
- Silence, secrecy, cops follow GreenTech’s China deal
- McAuliffe hones China’s crony-capitalism model in U.S.
- Promises keep Tunica County afloat
- McAuliffe company’s China hook-up: Will it work?
- McAuliffe car lags in Domino’s delivery
- McAuliffe car co. parent in off-shore tax shelter
- Lawmaker gives feds one more week for EB-5 answers
- Bolling: McAuliffe’s Mississippi package ‘attractive’
- Inside, execs knew McAuliffe plan had ‘substantial risk’
- Union darling McAuliffe and his non-union car company
- Did Clinton aid the birth of ‘McAuliffe’ car company?
- McAuliffe feels heat over GreenTech resignation
- TV report: One year later, ‘party is over’ at GreenTech
- Months after he said he left company, McAuliffe kept talking GreenTech
- Clinton connection: More money for McAuliffe
- Terry McAuliffe used loophole to avoid key SEC oversight of his car company
- VA officials: McAuliffe green car more politics than biz
- McAuliffe car company announces it’s ready to roll — again
- Before Watchdog, McAuliffe blamed federal officials for money trouble
- McAuliffe gets cash from GreenTech exec, board members
- Watchdog report on McAuliffe spurs FOI request to Homeland Security
- McAuliffe leaves GreenTech questions hanging at debate
- Totally wired: McAuliffe went to Napolitano to expedite company funding
- McAuliffe bragged about GreenTech’s cash position while begging feds for faster processing of ‘cash for visas’
- Investigation targets Homeland official’s relationship to McAuliffe company
- Even before news of federal probe, McAuliffe ducked GreenTech questions
- McAuliffe company pressed Homeland official on 81 investor visas
- Rodham company sought visa for controversial Chinese exec
- Immigration official says he met with McAuliffe to discuss visas for foreign investors
- Whiners: Mayorkas says Gulf Coast ‘continues to complain’
- VIDEO: Ex-GreenTech employee says little happened at Horn Lake plant
- Online ad to Terry McAuliffe: Drop your lawsuit
- National security on ‘hold’: Lawmakers press McAuliffe for answers
- Citizens United documentary film delves into McAuliffe, GreenTech
- VIDEO: Terry McAuliffe’s 15 million-square-foot car plant … in China
- Feds call McAuliffe car company’s use of investment program ‘possible fraud’
- GreenTech courted Obama’s Solyndra aide
- GOP legislators call for McAuliffe to answer GreenTech questions
- McAuliffe ‘desperate’ over documentary, Citizens United says
- GreenTech weighed Fisker-style federal loan
- Group tells Terry: Follow ‘McAuliffe Standard’ on disclosure
- Car and Driver races into GreenTech controversy
- Congressman: McAuliffe owes Virginians explanation about White House meeting
- Feds loosen oversight as McAuliffe car company makes mysterious management change
- GreenTech execs use Times and ABC to throw McAuliffe under the (non-electric) bus
- Aide in union contribution swap hosts California fund-raiser for McAuliffe
- Despite denials, docs show McAuliffe company asked feds to fast-track visa for investor tied to spy list
- Former Democrat Party director was on GreenTech payroll
- More bad news for McAuliffe car company as GreenTech China venture stalls
- Clinton Foundation posts deficits on McAuliffe’s watch
- VIDEO: GreenTech record dogs McAuliffe at energy forum
- Auto industry expert labels McAuliffe electric car ‘preposterous’
- Democratic leaders have their own Bain pain in Mideast private equity deal
- Hillary PAC adviser served as GreenTech spokeswoman
- New emails add evidence McAuliffe pressed U.S. officials to approve GreenTech funding
- After endorsement, Post shrinks facts to cover Terry McAuliffe
- Ties that bind: Following the McAuliffe-Clinton money trail
- McAuliffe tilts at windmills; Chinese venture goes bust
- Federal investigations cast shadow over McAuliffe on Election Day
- DHS inspector over GreenTech-McAuliffe case is under investigation
- McAuliffe names former GreenTech employee secretary of commonwealth
- McAuliffe lawyers, accountants sort GreenTech stock amid federal investigations
- Nuking filibusters, Dems clear way for Mayorkas at Homeland Security
- U.S. judge hands Watchdog a victory over VA governor’s green-car company