Ex-DNC Chair's Green Co. Goes Bankrupt After Watchdog Takes Closer Look
GreenTech Automotive, the electric car company founded by former Virginia Gov. Terry McAuliffe, filed for bankruptcy protection this week, citing news coverage in 2013 by Watchdog.org as one of the drivers behind that filing.
In its bankruptcy filing — which, if granted, would allow the company to continue operations while it reorganizes with the intention to continue to function after its debts have been renegotiated — GreenTech states that Watchdog “published a series of 76 negative articles containing certain false and defamatory statements targeting GreenTech” while McAuliffe was running for office.
GreenTech sued the Franklin Center for Government and Public Integrity, which publishes Watchdog, in 2013, but the case was dismissed in 2014.
McAuliffe, a Democrat, founded GreenTech in 2009 in Mississippi. However, by 2014, after winning the election to the governor’s office in Virginia, he asserted that he no longer had any role or ownership in the company.
GreenTech claims in its filing that subsequent media coverage of the lawsuit and its dismissal led to investigations by the Securities and Exchange Commission and the Office of the Inspector General of the Department of Homeland Security.
“The resulting report of the Inspector General in 2015, and the involvement of Republican legislators such as Senator Chuck Grassley in the matter, further impaired GreenTech’s reputation and its fundraising capability,” the filing states.
According to Watchdog reporting at the time of the lawsuit dismissal in 2014, a Mississippi judge rejected the assertion that coverage of GreenTech had resulted in harm to the company.
“The articles were aimed at McAuliffe and his bid to become Governor of Virginia, and McAuliffe sustained the ‘brunt of the harm’ of the published articles while GreenTech allegedly suffered from the residuary effects of the articles,” U.S. Judge Michael Mills wrote in dismissing the lawsuit.
“The subject and ‘intended harm’ of the articles at issue in this dispute was McAuliffe – not GreenTech or Mississippi,” Mills wrote.
GreenTech raised $141.5 million in startup funds between 2009 and 2013 in four rounds of fundraising that made use of the EB-5 investment program.
The program allows foreign nationals seeking residency in the U.S. to obtain a visa by investing at least $500,000 in a U.S. company that employs at least 10 American workers.
Sen. Grassley, R-Iowa, has been a leading critic of the EB-5 program, pointing to evidence that it has been subject to fraud and used by foreign intelligence agencies as a means to infiltrate the country.
GreenTech’s bankruptcy filing also cites a 2015 lawsuit by Plastech Holdings of Michigan.
While that lawsuit was dismissed, GreenTech states it “was forced to abruptly terminate its business relationship with (Anhui Jianghuai Automobile Co., a Chinese company at issue in the suit), forfeiting a substantial deposit, stranding substantial start-up expenses and resulting in other damages totaling in tens of millions of dollars, which effectively destroyed GreenTech as a viable enterprise.”
The bankruptcy filing seeks Chapter 11 protection.
A version of this article appeared on Watchdog.org.
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