Related Documents: GreenTech Automotive

FOIA Productions

U.S. Citizenship and Immigration Services

Gulf Coast Funds Management EB-5 Regional Center

Mississippi Development Authority

FOIA Request (April 15, 2013)

Documents (April 26, 2013)

Memorandum of Understanding

Office of the Mississippi Secretary of State

FOIA Request (May 14, 2013)

Documents (May 20, 2013)

Mississippi Department of Archives and History

Emails regarding GreenTech

McAuliffe Email to Haley Barbour FW_ EB-5 Pending Cases & Processing Times

Colby Lane Emails

Virginia Economic Development Partnership

FOIA Request (April 16, 2013)





GTA 2010

GTA 2011

GTA 2012

GTA Aug-Sep 2009

Excerpted FOIA Production

The documents below show how Gulf Coast Funds Management, the visa firm for GreenTech Automotive, was backed by political heavy hitters before Terry McAuliffe. The documents were used in a POLITCO story found here.


Letter to Committee on Oversight and Government Reform (September 24, 2013)


REPORT: Political Profiteering of Forest City Enterprises Part II

Political Profiteering:

How Forest City Enterprises Makes Private Profits at the Expense of America’s Taxpayers

Part II

Download Report

Executive Summary


“Without government development incentives, most of [Forest City Enterprises’] development projects ‘would not be economically viable.’”


            – The New York Post, August 6, 2013

            Forest City Enterprises (FCE) is a $10.6 billion real-estate development company that profits from public subsidies at the expense of taxpayers, job seekers, and those seeking affordable housing. Without delivering the jobs and affordable housing it forecasts, FCE takes advantage of communities where it builds large-scale, mixed-use projects, creating a pattern of broken promises. This is the second report in a three-part series detailing how FCE makes private profits at the expense of America’s taxpayers.  As part of Cause of Action’s (CoA’s) ongoing investigations into crony companies that use politics for profit, we found that local residents have been victimized by FCE’s real estate projects in Brooklyn, N.Y.; Albuquerque, N.M.; and New Rochelle, N.Y.

FCE’s pattern promises local governments that its development projects will generate plentiful jobs, housing, economic development, and tax revenues.  Concomitantly, FCE employs a well-funded public relations campaign, a team of politically-connected lobbyists, and campaign contributions to local politicians in order to acquire subsidies, tax breaks, and property through eminent domain.  However, once FCE receives public financial support, it often renegotiates or delays implementation of the benefits that it had previously promised.  In short, it lobbies, profits, and then bilks the taxpayers by breaching its promise to the community.

CoA’s investigation revealed that FCE promised to create more than 70,000 permanent jobs and 3,750 affordable housing units in Brooklyn and Albuquerque, but that it has actually produced only 3,000 permanent jobs and built no affordable housing units.  Meanwhile, FCE pocketed $277.2 million in subsidies from those communities after contributing $310,450 to local political candidates and spending over $8.6 million on lobbyists.  Sadly, these are not isolated incidents, but endemic of an intentional method in which FCE does business.  This pattern is poised to continue in the proposed project in New Rochelle.

Profits over Promises

FCE promised in 2004 that its 22-acre Atlantic Yards project in Brooklyn would generate 10,000 permanent jobs and 2,250 units of affordable housing.  In return, the company received $270 million in direct subsidies in order to construct a new sports arena, the Barclays Center, and to bring the New Jersey Nets there to play.  FCE purchased land for the project at less than half-price and received other land after the government seized it by eminent domain.  To date, the Barclay’s Center has been completed, but only 1,900 part time jobs have been created and the affordable housing remains unfinished. 

Backtracking on Promises

For the Mesa del Sol project in Albuquerque — a 12,900-acre mixed use community — FCE promised to create 30,000 economic base jobs, 30,000 service sector jobs, and 1,200 units of affordable housing over a 50-year period.   After FCE  provided $220,000 in cash and in-kind contributions to candidates for state office in New Mexico — including $150,000 to Governor Richardson’s gubernatorial campaign and the use of one of the company’s corporate jets for three campaign trips in 2006 — FCE received commitments of up to $630 million over 25 years through a new state subsidy.  But by May 2013, FCE announced the sale of its stake in Mesa del Sol, citing its need to focus on “core markets.”  As of May 2013, FCE has received $7.2 in subsidies, but only 2,000 jobs have been created and the construction of affordable housing will be delayed for at least six years.

FCE’s Next Victim of Political Profiteering

The next victim of FCE’s political profiteering appears to be the city of New Rochelle, where FCE has proposed a waterfront redevelopment project known as “Echo Bay.” FCE’s Residential Group (FCRG) has promised to add 285 luxury apartments, 25,000 feet of retail space, and a five-acre park, which FCRG estimates will generate $49 million in revenue and $307 million in economic benefits, including 211 construction jobs, 59 retail and residential management jobs, and 1,000 indirect jobs over a period of 20 years. The project would also provide FCRG with at least $20 million in tax abatements between 2016 and 2035 through a proposal that includes twenty years of Payments in Lieu of Taxes (PILOT).  Echo Bay fits the pattern that CoA exposed with FCE’s past projects.  Specifically, FCRG scaled back the scope of its original proposal, which offered 150,000 square feet of retail and 600 luxury apartments.  Additionally, FCE’s consultants for the project gave $17,000 in campaign contributions to Mayor Noam Bramson, who is a staunch defender of the project.

What follows in this report is a portrait of FCE’s pattern of exploitation and broken promises, documented through news reports, campaign contribution reports, lobbyist filings, litigation, and government documents obtained through Freedom of Information Act (FOIA) requests.  CoA filed seven FOIA requests to attempt to uncover how FCE works with government agencies and city councils behind the scenes, but found a lack of adequate record keeping and uncooperative responses.  CoA’s first report exposed how FCE used $23 million in political spending over the past ten years to obtain $2.6 billion in government subsidies and financial benefits. In its final report, CoA will show how FCE has enriched itself through bribery and political graft, colluded with the government to take advantage of the EB-5 investor program, and benefited from eminent domain abuse.

II. Findings

  • Finding:          Despite receiving $270 million in subsidies for the Atlantic Yards project and a commitment of $630 million over 25 years for its Mesa del Sol project, FCE has failed to deliver the public benefits promised in exchange for taxpayers’ financial support.

Atlantic Yards Project: Brooklyn, New York

  • Finding:          Forest City Ratner (FCR) promised to create 10,000 permanent jobs and 2,250 units of affordable housing in exchange for $270 million in direct taxpayer money to build its sports arena and land provided to it through eminent domain.  To date, none of the affordable housing has been built and only 2,000 permanent jobs have been created1,900 of which are part-time jobs.
  • Finding:          FCR drafted a Community Benefits Agreement (CBA) in 2005 in order to gather local support for the Atlantic Yards project, but the promised benefits have not been provided.  FCR has not provided an Independent Compliance Monitor to oversee enforcement of the agreement.

Mesa del Sol Project: Albuquerque, New Mexico

  • Finding:          FCE employed lobbyists and provided $150,000 in campaign contributions and use of its corporate jet to then-Governor Bill Richardson in order to push through a bill creating a new subsidy for real estate development in 2006.  In 2007, FCE received commitments from the City of Albuquerque and the State of New Mexico for up to $130 million and $500 million in subsidies, respectively, over 25 years.
  • Finding:          FCE promised to create 60,000 jobs over a 50-year period and 1,200 units of affordable housing in exchange for the commitment of $630 million in subsidies. However, by the time FCE sold its stake in the project in May 2013, only 2,000 jobs had been created and the original affordable housing agreement had been renegotiated to delay construction by at least six-and-a-half years.

Echo Bay Project: New Rochelle, New York

  • Finding:          FCE’s Residential Group (FCRG) has promised the City of New Rochelle that its Echo Bay project will create about 59 permanent jobs and increase local tax revenue.  However, FCRG seeks $20 million in tax abatements from 2016 to 2035 despite the fact that residents have been facing property tax increases and cuts in public services for years.
  • Finding:          FCE executives in Cleveland gave New Rochelle Mayor Noam Bramson $5,000 in campaign contributions in August 2007 after FCE was selected as the developer for the Echo Bay project in December 2006.  Mayor Bramson has received $17,500 in campaign contributions from FCRG’s consultants since December 2012.


Related Documents: Healthcare – The Patient Protection and Affordable Care Act

Letter to the Texas Attorney General

Letter (November 13, 2013)

IRS Complaints Against Enroll America For Violating the Internal Revenue Code

Complaint (November 22, 2013)

IRS Reply (August 5, 2013 )

Complaint (July 29, 2013)

Liability Alert Letters re: PPACA

The liability alert letter to the General Counsel of Covered California is here.

Cause of Action sent letters notifying Governors and state Attorneys General of legal liability should federal grant recipients in their states misuse the federal money they receive to run the state health exchanges and Navigator programs. Cause of Action explains how waste, fraud and abuse are potential consequences of federal funds given to states without accountability and proper oversight.

You can find each state letter below and the date on which the letter was sent:

REPORT: GreenTech Automotive: A Venture Capitalized by Cronyism

Executive Summary

“It seemed like a win for everyone involved when a startup car company, backed by political heavyweights, wooed investors with plans to build a massive auto plant in the Mississippi Delta, hire thousands of people and pump out a brand new line of fuel-efficient vehicles…But today, the company is under a federal investigation and about the only thing on its land in Tunica County is a temporary construction office.”

–          Associated Press, August 12, 2013

Less than half of all businesses started between 1977 and 2000 survived to five years.  Market competition is cruel but it’s not unfair.  Unfair is when political heavyweights use their influence to skew the market and force taxpayers to underwrite the risk of speculative new business ventures; taxpayers suffer while crony companies reap the profits.  Such is the case with GreenTech Automotive, Inc. (GreenTech), a startup automobile manufacturer that promised jobs and economic growth in Virginia and Mississippi but has failed to deliver.  The following report is the latest from Cause of Action’s (CoA) investigations into companies that rely upon the politically powerful, not the competitive marketplace, to determine economic winners and losers.

The story of GreenTech and its principals, Terry McAuliffe and Charles Wang, weaves a tale of promises to invest billions of dollars and create thousands of jobs as a result of alleged technological breakthroughs.  What is becoming increasingly likely, however, is that taxpayers will instead bear the costs of broken promises by subsidizing a failed business that used political connections and pressure to profit from taxpayer dollars.

Terry McAuliffe has made a career of using politics to profit.

As far back as 1997, Business Week declared that “[m]any of Terry McAuliffe’s business deals are intertwined with his political interests.” According to Leaders Magazine in 2007, McAuliffe “started over two dozen companies in the fields of banking, insurance, marketing, and real estate.  McAuliffe served as Chairman of Federal City National Bank and, most recently, was an owner and Chairman of American Heritage Homes.” These companies and his political fundraising career earned him millions in personal profit, but also brought Department of Justice investigations, accusations of conspiracy and illegal donation schemes, and Department of Labor penalties. What is clear is that political fundraiser and businessman McAuliffe has made a habit of using his connections and favors to rake in profits, and he has continued that pattern with GreenTech. After receiving campaign contributions from Charles Wang in 2008 for his first gubernatorial bid, Terry McAuliffe made his deep political Rolodex available for GreenTech’s benefit.  As Amy Gardner from The Washington Post has observed, many of McAuliffe’s biggest business deals “came in partnership with prominent donors and politicians, creating a portrait over the years of a Washington insider who got rich as he rose to power in the Democratic Party.” He continued that pattern with GreenTech, benefitting the company through his own political connections.

  • In 2008, Charles Wang made a $50,000 donation to Terry McAuliffe’s gubernatorial campaign.  Shortly thereafter, Wang’s company merged with what is now GreenTech and McAuliffe was named Chairman.
  • As GreenTech Chairman, in an email to then-Governor Haley Barbour, McAuliffe cited efforts by U.S. Senators Thad Cochran (R-MS) and Roger Wicker (R-MS) to pressure the United States Citizenship and Immigration Services (USCIS) Director Alejandro Mayorkas into fast-tracking EB-5 visa applications that would provide Chinese investments for GreenTech.
  • McAuliffe sent numerous emails to Director Mayorkas and Douglas Smith, Department of Homeland Security’s assistant secretary for the Office of the Private Sector, expressing frustration with USCIS’ slow visa approval process. Smith attended GreenTech’s groundbreaking at its temporary Horn Lake facility, where McAuliffe also privately met with President Bill Clinton and Chinese investors.
  • Anthony Rodham, brother of former Secretary of State Hillary Clinton, is President and CEO of Gulf Coast Funds Management (Gulf Coast) the country’s largest Regional Center for processing EB-5 investments, and the manager of EB-5 investments for GreenTech.

GreenTech utilized the EB-5 visa program as a catalyst for favors and a prop for business deals.

In 2008, Gulf Coast, a sister company of GreenTech, used political pressure to position itself as a powerful Regional Center for managing two states’ EB-5 investments, yielding large profits. GreenTech was financed by Chinese investors with a strong interest in securing visas in exchange for millions of dollars in capital through EB-5.

  • Then-Mississippi Governor Haley Barbour, one of Terry McAuliffe’s current business partners, contacted Barbara Velarde, the head of the USCIS office that oversees the Regional Center program, urging the agency to designate Gulf Coast as the Regional Center for the entire state of Mississippi.
  • Kathleen Blanco, who was Governor of Louisiana at the time that USCIS approved Gulf Coast’s application, is currently a member of Gulf Coast’s board.
  • Between 2009 and 2012, GreenTech raised $67 million from more than one hundred EB-5 investors. Gulf Coast has collected a total of approximately $7.4 million in profits from GreenTech investors.

GreenTech is abusing taxpayer funds.

Under the leadership of Charles Wang and Terry McAuliffe, GreenTech submitted exaggerated projections about its manufacturing output and job creation prospects, convincing Mississippi state officials to award millions of taxpayer dollars in loans and tax incentives to develop a GreenTech plant within the state.

  • In exchange for a promise to build a manufacturing facility in Tunica County, the Mississippi Development Authority (MDA) agreed to provide a $3 million loan to GreenTech from the Mississippi Industry Incentive Financing Revolving Fund to construct an access road to the facility.
  • A $2 million loan was given to the Tunica County Economic Development Foundation to purchase the site on which the facility would be built.  GreenTech received a host of tax breaks and incentives including reduced state income, franchise, property, sales and use taxes and income tax rebates for company employees.
  • GreenTech has claimed that it will create 25,000 direct jobs that will each create 11.86 indirect and induced jobs, or 296,500 jobs in total.  This is problematic both in expectation and legality given that current law provides for no more than 10,000 EB-5 visas per year.

While it is unknown whether GreenTech will meet its own estimate of 25,000 full-time jobs in Mississippi by 2014, according to NBC12 News in Richmond, Va., a former GreenTech employee claims that GreenTech’s “lofty goals were nowhere near reality.”

What follows in this report are these and additional findings from a six-month investigation of the relationships and political deals that allowed GreenTech to entice Mississippi into a misbegotten experiment in green automotive technology. As this report reveals, the real engine driving GreenTech’s business plan appears to be its management’s extraordinary talent for exploiting taxpayers to advance their own interests.


PDFGreenTech Automotive: A Venture Capitalized by Cronyism

Exhibits:Exhibits 1-32

Wang Emails: 1 & 2

GTA Exhibit 6 (here) was the Document used in a Washington Post story

REPORT: Political Profiteering: How Forest City Enterprises Makes Private Profits at the Expense of America’s Taxpayers Part I

Executive Summary

When the politically powerful, not the competitive marketplace, determine winners and losers in America’s business decisions, taxpayers take on all of the risk and crony companies extract the profits. The cycle of political profiteering is born when politicians exchange public subsidies for campaign contributions. This method of using the government to profit has become a trademark of one of the largest publicly traded real estate development companies in the United States: Forest City Enterprises.

Forest City Enterprises (FCE) is a $10.6 billion company that most Americans have likely never heard of, even though the public finances twenty-three percent of FCE’s revenue. The FCE business model is dependent upon political profiteering: relying on public money and government influence to reap millions in profit.  Using highly paid lobbyists, political connections, campaign contributions, and strategic hiring of government officials, FCE obtains lavish public subsidies, tax-exempt financing and the seizure of private land from eminent domain condemnations.

The following report exposes the money trail between FCE and its political friends that have resulted in a decade of kickbacks for both FCE and politicians. Between 2002 and 2012, FCE, its subsidiaries, and its employees spent $23 million on campaign contributions and lobbying at the federal, state, and local level. FCE even went so far as to coordinate donations among employees in its project locations: $15.4 million of the $23 million in contributions were made by multiple employees of FCE on the same day. During that same time frame, FCE and its subsidiaries received or signed agreements for fifty-two direct and indirect government subsidies or financial benefits with a total value of at least $2.6 billion. The subsidies amounted to twenty-three percent of FCE’s $11.4 billion revenue during that time period.

The FCE business model is one that damages competition in the market by abusing market mechanisms in ways that capitalizes off government handouts. This report is Part One of a three-part series examining how Forest City Enterprises uses politics to profit.





Preview of subsequent reports:In the reports that follow, resulting from Cause of Action’s two year investigation, CoA will show how FCE took public benefits under the premise of providing jobs for minority workers but failed to deliver as well as how FCE enriched itself through bribery and political graft, without ever being subject to investigation or oversight.

Subsidy and Political Spending Data:

Forest City Enterprises Data

Emails from Forest City Washington’s Alex Nyhan to former colleagues at the District of Columbia (D.C.) Office of the Deputy Mayor for Planning and Economic Development

Forest City Washington Emails

Full FOIA Production



IRS complaint against Enroll America

CoA sent a complaint to the IRS advising that Enroll America, a § 501(c)(3) organization, is in violation of several provisions of the Internal Revenue Code, and that an immediate investigation is warranted to determine whether its tax exemption should be revoked.  Enroll America is primarily organized to benefit the health insurers, pharmaceutical companies, and other for-profit commercial entities represented on its board of directors and advisory council, and is therefore not organized to achieve any of the lawful purposes listed under IRC § 501(c)(3).


13909 Complaint

13909 Complaint Cover Letter




Related Documents: Investigation of DHS Deputy IG Charles Edwards

We sent a FOIA Request to DHS OIG on March 27, 2013 asking for documents related to 3 prior FOIA requests, travel records and any complaints against Deputy IG Charles Edwards, and documents disclosed to Andrew Becker, a journalist at the Center for Investigative Reporting.

After not receiving the documents we requested, we filed a lawsuit for the records on June 11, 2013.

Based on information from our insiders, we sent a letter asking President Obama to remove Deputy IG Edwards on July 1, 2013 for:

  1. Failing to appropriately conduct investigations (including whitewashing a report on the solicitation of prostitutes by the Secret Service in Colombia)
  2. Improper travel costs. Edwards would conduct “site checks” at a nearby DHS OIG office in Miramar, Florida but his actual intent was to attend classes for his doctorate degree at Nova Southeastern University. Edwards also took two separate three-day trips to a remote DHS office in Puerto Rico and stayed in resort hotels.
  3. Nepotism for hiring his wife and promoting those who approved her five month telework request.
  4. Destruction of federal records
  5. Disregard of the Freedom of Information Act and the removal of records
  6. Intimidating and retaliating against employees

DHS OIG finally sent us a partial response on July 2, 2013 and the documents confirm what our whistleblowers were saying about Deputy IG Edwards.

  1. The travel records show that Edwards stayed in a hotel closer to his school than to the DHS OIG Office and he even received a special rate for “Nova SE University.”
  2. They also confirm that Edwards took two separate three-day trips to a remote DHS office in Puerto Rico and stayed in resort hotels.
  3. Telephone records show that Edwards’ wife, Madhuri Edwards, primarily used her government issued international phone to call Charles Edwards while on telework in India.


Cause of Action’s Executive Director Dan Epstein discussed Deputy IG Charles Edwards on CNN’s The Lead with Jake Tapper.


FOIA Requests

Production: Internal Complaints (October 31, 2013)

Interim DHS OIG FOIA Production (July 2, 2013 )

DHS OIG FOIA Complaint (June 11, 2013)

FOIA Request (March 27, 2013)


Cause of Action letter to President Obama: Remove DHS Deputy IG Charles Edwards (July 1, 2013)