Yesterday in the Green Room, I linked to a Jim Geraghty column at NRO about the reaction from the Virginia Economic Development Partnership (VEDP) after Terry McAuliffe’s GreenTech Automotive applied for grants. A FOIA request produced internal memos showing that VEDP became very suspicious that GTA was “a visa-for-sale scheme,” which Watchdog.org posted after getting access to the internal communications. McAuliffe, who is running for governor in Virginia this year against current Attorney General Ken Cuccinelli, has yet to explain the memos, but his former firm has responded by, er … suing Watchdog for $85 million:
A fledgling electric car company founded by Virginia gubernatorial candidate Terry McAuliffe has sued Watchdog.orgfollowing an investigation highlighting the automaker’s use of a controversial government “cash-for-visas” immigration program.
GreenTech Automotive Inc. blames Watchdog for an alleged $85-million loss after publication of two articles detailing the woes of the government immigration program, called EB-5. In one article, a financial expert criticized the EB-5 program as “a fraud.” EB-5 has repeatedly come under fire for lax oversight. An Illinois program was recently the subject of a Securities and Exchange Commission probe.
The EB-5 program was created in 1990, and offers green cards to foreign nationals who invest at least $500,000 in U.S. companies to create 10 or more jobs.
“Specifically, as a direct and express result of the articles published by Defendants … investors are wavering in their commitment to provide $25 million in investments already promised to GTA,” the lawsuit said. “GTA…intended to raise $60 million in capital, (and) is now in significant danger as a direct result of the loss of investor confidence in GTA arising from the publication of Defendants’ articles.”
Anyone with a lawyer and a hundred bucks can file a lawsuit, the saying goes, but this more than a little strange. Right off the bat, the allegations of shady conduct didn’t come from Watchdog, but from the VEDP — during the administration of fellow Democrat Tim Kaine. In order to be liable for damages, Watchdog would have to have libeled GTA in a malicious manner, rather than quoting accurately from government communications. Furthermore, McAuliffe’s involvement in politics and his explicit political claims about his stewardship of GTA puts this squarely within the public interest for debate — and for that matter, so did GTA’s application for government subsidies in the first place.
Next, the idea that Watchdog.org (run by the Franklin Center for Government and Public Integrity) would have $85 million to seize is ludicrous. On top of all that, any lawsuit that actually proceeds will be subject to mutual discovery. That means that Watchdog will have access to any internal communications at GTA relating to their strategy for visas and pretty much anything else. While VEDP’s suspicions don’t mean that GTA really intended on running a visa-for-sale scheme, few companies with open issues (such as McAuliffe’s under-the-radar departure a few months back) want teams of lawyers rummaging through their files and e-mails.
Tori Richards at Human Events says that the point is intimidation, not litigation, although only in the headline; the rest is a reprint of Watchdog’s release. Jim Geraghty notes that Watchdog has already clarified their use of the word “fraud” (which applied to the program type, and not GTA), and adds this:
If you had a cynical mind, what would you suspect about this lawsuit?
I’d say that GTA doesn’t like public scrutiny very much. If so, they should stop asking for public support, and encourage their founder to get out of politics, too.