According to recent reports, GreenTech Automotive—the electric car company that was once a joint venture between Virginia Governor Terry McAuliffe and Chinese investor Charles Wang—missed its first repayment on a $3,000,000 public loan from the Mississippi Development Authority (“MDA”).
The story of GreenTech is one of broken promises. In a series of investigations, which culminated in the publication of a comprehensive report in 2013, Cause of Action Institute explained how GreenTech used McAuliffe’s political connections to garner millions of taxpayer dollars in loans and tax incentives, yet failed to meet expectations, instead exaggerating projections of job creation and vehicle production.
According to the Memorandum of Understanding between GreenTech and the MDA, the company promised to invest at least $60 million in the state and create at least 350 full-time jobs within three years of starting commercial production. In exchange, Mississippi officials promised to loan $2 million to local government to purchase the plot for the company’s production facility, and to provide a direct loan to GreenTech of $3 million. GreenTech also received a host of tax breaks and incentives valued at $25 million.
As of May 2016, however, sources suggest that GreenTech employs merely 75 people and has failed to sell a single vehicle. On top of its apparent inability to make good on its promises to taxpayers, the company’s added failure to meet the initial repayment deadline on the public-funded loan calls into question the economic viability of the entire project.
GreenTech and its former chairman, Governor McAuliffe, have been embroiled in other controversies. The company is under investigation by the SEC for its participation in the EB-5 Immigrant Investor Visa Program, through which it has received approximately $46 million in foreign capital, according to some reports. The watchdog for the Department of Homeland Security also reported that McAuliffe and friends—including as Anthony Rodham, brother of former Secretary of State Hillary Clinton—benefited from political favoritism in the administration of the EB-5 program.
It is unknown whether Mississippi officials will take action against GreenTech for its failure to perform under the loan agreement. But taxpayers should be concerned that the company be given a mere slap on the wrist for its apparent misuse of public funds.
Read Cause of Action Institute’s report on GreenTech Automotive HERE
Related documents can be found HERE
