Category Archives: Scandals

Bacon Bits: Public Servants in Action

Robert Bobb to the rescue. Robert C. Bobb, a former Richmond city manager turned public-sector turnaround artist, pulled the City of Petersburg back from the brink of bankruptcy. Now he will endeavor to manage the City of Charlottesville, which has been hobbled by racial tensions and interpersonal conflicts. After debilitating turnover in the administration — seven executive-level positions are vacant or filled by acting supervisors — City Council has hired the Robert Bobb Group to provide city manager services for the next six months, according to Virginia Public Radio.

Bobb salvaged Petersburg, but can he save Charlottesville? Petersburg suffered from simple incompetence. But the People’s Republic of Charlottesville is prone to militancy, ideological fracture, absolutist judgments and cancel culture. Bobb, who stabilized Detroit public schools, is an administrative superman. Will Charlottesville be his kryptonite? 

Faking DNA results to fake out suspects. The Virginia Beach Police Department used forged documents linking peoples’ DNA to crimes on at least five occasions to get them to confess, the Attorney General’s Office has found. The fake documents bore a seal and letterhead from the Virginia Department of Forensic Science and the signature of a fictitious employee, reports CBS NewsIn one instance, a forged report was presented to a court as evidence. After its own investigation, the VB police ended the practice earlier this year. “This was an extremely troubling and potentially unconstitutional tactic that abused the name of the Commonwealth to try to coerce confessions,” said AG Mark Herring. Continue reading

Northam Solves Mystery of the Man in Blackface

by Kerry Dougherty

Let’s just call it a missed opportunity.

Yesterday, with just three days remaining in his term as governor, Ralph Northam unveiled the official portrait of himself.

Surely some practical joker behind the scenes was tempted to replace the commissioned painting with that well-known portrait of Northam in blackface standing beside a friend or date in a Klan hood.

Imagine the gasps when the assembled crowd might have seen an enlargement of the notorious black and white snapshot instead of the painting that truly is destined to hang somewhere in the Capitol beside images of Patrick Henry and Thomas Jefferson.

Alas, no pranksters on the scene, so it appears that everyone politely applauded at the likeness painted by Stanley Rayfield, a gifted 34-year-old Virginia portrait artist. His painting features a tieless Northam beside two newspapers with the headlines “Virginia Repeals Death Penalty” and “The Country’s Biggest Remaining Confederate Statue Comes Down in Virginia.” On the bookshelf behind the governor is a photo of Pam Northam and a leather-bound book titled, “Covid-19 Pandemic Response.” Continue reading

What Is Going on in Portsmouth?

by Kerry Dougherty

Are there cities that are more dysfunctional than Portsmouth, Virginia?

Yes, of course there are.

There’s always San Francisco where you can get an app for your phone called “SnapCrap” to allow you to report piles of human feces to city sanitation workers.

There’s Chicago. The Windy City was recently designated the “rattiest” in America by Orkin. Lots of rodents there.

And there’s Seattle, which actually ceded city blocks to anarchists in the summer of 2020.

But you’ve got to hand it to Virginia’s “Old Port City,” which was once a bustling hub of commerce and charm. Now it’s competing for most boneheaded city in the U.S. where city and state officials trade lawsuits and accuse each other of vile motives. Continue reading

Masters of Hype and Puffery

Former President Clinton at the GreenTech “pilot plant” in July 2012.

This is the fifth in a series of articles about Terry McAuliffe and GreenTech.

by James A. Bacon and Carol J. Bova

On July 6, 2012, GreenTech Automotive launched the rollout of the “all-American” MyCar electric vehicle at a ceremony attended by former President Bill Clinton, the governor of Mississippi, the assistant secretary of Homeland Security and, as described by local media, “an overflow crowd.”

It was a festive occasion. Clinton lauded company chairman Terry McAuliffe and former Mississippi Governor Haley Barbour, a Republican, who was also in attendance, for overcoming their political rivalries and delivering a tremendous manufacturing project for the state of Mississippi. 

McAuliffe, too, was upbeat. “For too long, America has been inventing products here and sending the production jobs overseas,” he said. “But … we’re proud to bring manufacturing jobs back and prove that the U.S. is still the world leader in technological innovation and manufacturing.”

The day before, McAuliffe had told the New York Times that he thought the company could produce 10,000 cars in 2013. He quoted an $18,000 price tag for a top-of-the-line MyCar, with less capable versions selling for less, implying potential revenues in the realm of $150 million. During the ceremony itself, he announced big news: Domino’s Pizza Inc. would exclusively use the MyCar to deliver pizzas in 10,000 locations across the U.S.

Photographers snapped pictures of a grinning Clinton toodling around the cement floor of the pilot plant in a MyCar decked out with the Domino’s Pizza logo. Other photographs showed GreenTech employees industriously working on an assembly line of MyCars. Continue reading

Shearing the Sheep

This is the fourth in a series of posts about Terry McAuliffe and GreenTech Automotive.

by James A. Bacon and Carol J. Bova

The Chinese citizens who lost $500,000 each from investing in GreenTech Automotive were not happy with their setback. While they had ponied up their money as part of a scheme to get a U.S. visa under the EB-5 program, many thought they would get their money back. When they didn’t, they felt cheated. Twenty-seven of them banded together and filed suit against Xiaolin “Charles” Wang, Anthony Rodham and Terry McAuliffe, the principals of GreenTech and its allied fund-raising arm Gulf Coast Management.

The outcome of the case, Xia Bi vs. McAuliffe, hinged on matters of law. Boasting, exaggeration and hype regarding future events, referred to as “puffery,” which the defendants indisputably engaged in, do not constitute fraud. Although some of the Chinese plaintiffs’ allegations did describe misstatements of fact, said federal appeals court judge J. Harvie Wilkinson III in a 2009 ruling, they failed to show that they had based their investment decisions upon those misstatements. Accordingly, he upheld a lower court order to dismiss the case.

Nevertheless, Xia Bi vs. McAuliffe provides insight into how the GreenTech fund-raising operation worked. It is abundantly clear why the Chinese investors felt cheated, even if they could not win their case in court. As Wilkinson wrote, “There are no laurels in this case, no accolades to be bestowed.” Continue reading

Dreams from the Opium Den

This is the third article in a series about Terry McAuliffe and GreenTech.

by James A. Bacon and Carol J. Bova

When partners Xiaolin “Charlie” Wang, Anthony Rodham, and Terry McAuliffe banded together in 2009 to finance and build an electric vehicle enterprise known as GreenTech Automotive, they thought big. Very big. In a 2009 offering memorandum pitched to Chinese investors, they stated they aimed to grow their flimsily financed start-up into an automotive behemoth eventually capable of generating up to $33 billion in revenue.

“If full production of one million vehicles is realized,” elaborated the document, GreenTech’s manufacturing facility in Tunica County, Miss., would be “one of the largest automobile manufacturing plants in the world.”

In retrospect — after GreenTech went bankrupt having produced only a handful of cars, burned through more than $140 million, and left barely $6 million behind for investors and creditors in the bankruptcy settlement — such aspirations seem wildly disconnected from reality. Whether McAuliffe and his partners believed such targets were remotely realistic is a question only they can answer.

Looking at GreenTech from the outside, some described the business as a scheme to snooker millions of dollars from naive Chinese investors. A more charitable explanation is that the GreenTech partners genuinely believed their own hype, hoping they could bootstrap one fund-raising effort into enough progress in building the enterprise that they could make it to the next fund-raising round with a better story, raise some more money, make more progress, and hook the next round of investors. In other words, in such a view, their business plan was fake until you make it.

Whatever the thought process, it was an abject failure. Chinese investors lost almost everything, they felt cheated, and the three principals opened themselves to accusations of fraud. Continue reading

A Handshake Deal Gone Bad

This is the second in a series of articles about Terry McAuliffe and Greentech.

by James A. Bacon and Carol J. Bova

Fourteen  years ago, Benjamin Yeung was a Chinese entrepreneur whose companies manufactured and sold minibuses, passenger cars and business vehicles in China. In 2007 he launched a venture with the idea of building small hybrid cars in the United States. What made the plan unusual was the source of financing: Chinese investors willing to invest $500,000 in the U.S. in order to get a green card under a new U.S. initiative, the EB-5 Investor Pilot Program.

Although he needed an interpreter, Yeung was comfortable doing business in the United States. His wife, Rhea, was an American citizen, and he owned a residence in California. According to the account he gave in a court affidavit, he set up a holding company, Hybrid Kinetic Automotive Holdings, Inc. (HK Holdings), and an operating subsidiary, Hybrid Kinetic Automotive Corporation (HKAC).

Yeung said he made wife Rhea the sole shareholder of HK Automotive Holdings. But to run the venture in its start-up phase, he brought on a young Chinese man living in Northern Virginia, Xia0lin “Charlie” Wang. Wang was highly credentialed. He had earned an undergraduate law degree from Xiangtan University, an M.A. degree in development studies from Ohio University, and a degree in international law from Duke University. On his resume, he listed experience as a capital markets partner in the Washington, D.C., office of a prominent New York law firm. Continue reading

Where Did $140 Million in GreenTech Money Go?

This is the first in a series of articles about Terry McAuliffe and GreenTech Automotive.

by James A. Bacon and Carol J. Bova

In September 2016, the Office of the State Auditor (OSA) of the state of Mississippi began undertaking a review of the contracts signed by the state’s economic development authority. The goal was to see if the corporations benefiting from state incentive money had made good on the capital investment and job creation they had promised. Several companies were targeted for a closer look.

One of those was Greentech Automotive Inc., a Virginia company whose chairman in 2011 when the Memorandum of Understanding was signed was Terry McAuliffe.

GreenTech had announced ambitious plans for a multibillion-dollar business by designing and manufacturing hybrid and electric vehicles. Between 2009 and 2013 the company raised a total of $141.5 million from Chinese investors under the EB-5 program, which gave foreigners a U.S. green card in exchange for a $500,000 investment in the United States. Incentive financing from the state of Mississippi and Tunica County, Miss., amounted to another $6 million. All told, GreenTech raised at least $147.5 million in funding.

Despite a GreenTech commitment to invest $60 million in the manufacturing plant, very few cars ever rolled off the assembly line… assuming there even was an assembly line. The Mississippi auditor’s report could find documentation for only $3.4 million spent on automotive assembly equipment and parts. Further, despite promises to create 350 full-time jobs, the auditors determined that the company had never supported more than 94 active, full-time jobs in Mississippi at a time. GreenTech made only a single $150,000 payment to the state.

Despite having scrimped on manufacturing expenditures, the company listed minimal assets when it filed for bankruptcy in 2017. In a final settlement, agreed to last year, investors and creditors recovered only $6.6 million. Mississippi and Tunica County recovered only $575,000.

What happened to the other $140 million? Continue reading

The Loudoun Way — School Rapes by a Member of a Progressive Protected Class

Loudoun County Commonwealth’s Attorney Buta Biberaj

by James C. Sherlock

Any time you think there is only one system of justice in America, consider these two stories I offer below, one a progressive dream and the other true.

The true story will show some progressives care more about their dogma than kids.

And any time you think only big city progressives don’t give a damn about child victims of crime, like in Chicago or New York, read the true one below.

It is underway in Loudoun County. Continue reading

How Does Virginia Budget Early-Childhood-Education Money Wind Up in a Park in Detroit?

by James C. Sherlock – updated Oct 15

I’d like to report an organized crime. It’s just not illegal in Virginia.

The political Left, fully in control of Virginia government, sends taxpayer money to leftist non-profits, who take their cuts and then send it on to local government entities and yet more nonprofits.

It is unethical, but that does not matter to Virginia’s elected Democrats.

But they have set themselves up for a fall. They may not know enough about nonprofit reporting laws to understand it opens the tax money transfers up to public examination.

Federally required independent accountants of nonprofits won’t play along. When non-profits touch the money, they have to report it to the IRS on their annual Form 990’s, where we mere taxpayers can see it.

In this case we will trace early childhood education money from the Virginia budget to a park in Detroit. Continue reading

Bacon Bits: The Political Class in Action

Is Charlottesville governable? Charlottesville City Manager Chip Boyles has announced his resignation, making him the fifth interim or full-time city manager to leave the city since 2018, reports the Daily Progress. “The public disparagement shown by several community members and Mayor [Nikuyah] Walker has begun to negatively effect [sic] my personal health and well-being,” he wrote to City Council. Walker responded by saying Boyles should have been fired. “You shouldn’t have been able to sleep at night because you are a liar,” she said in a Facebook video. Walker, who gained notoriety for penning a poem likening Charlottesville to rape, has herself said she will not run for re-election. Boyle and Walker butted heads over many issues, including his firing of the city’s female, African-American police chief. One councilman told the Daily Progress that in the opinion of an executive search firm contacted last year, “we were not likely to be able to hire anybody with council as dysfunctional as it is.”

It was an innocent mistake, yer honor. Chesapeake Board Chair Victoria Proffitt, who had been laid off from her adjunct math teaching job at Tidewater Community College, has returned $984 in unemployment benefits she was overpaid by the Virginia Employment Commission. She attributed the error to a VEC oversight, but a special prosecutor had contended she was “either being intentionally dishonest or was just exceedingly careless,” says the Virginian-Pilot. Meanwhile… Continue reading

Virginia’s Self-Inflicted Nursing Home Crisis – Part 3 – McAuliffe & Herring

by James C. Sherlock

In the first two parts of this series, I wrote about the shortage of state inspectors for nursing homes in the Virginia Department of Health Office of Licensure and Certification (OLC)  and the continuing danger it poses to Virginia patients.

The problem, unfortunately, is much wider than just nursing homes.  So is the scandal.

That same office inspects every type of medical facility including home care agencies as well as managed care plans. Except it cannot meet the statutory requirements because it does not have sufficient personnel or money. And it have been telling the world about it for years.

Terence Richard McAuliffe was the 72nd governor of Virginia from 2014 to 2018. Mark Herring has been Attorney General since 2014.

We will trace below that they can reasonably be called the founding fathers of overdue inspections of medical facilities in Virginia.

VDH has been short of health inspectors since McAuliffe and Herring took office and still is .

Both of them know it. And they know that lack of inspections demonstrably causes unnecessary suffering and death.

Continue reading

Campaign Finance Reform in Virginia – the New Governor Must Lead

by James C. Sherlock

I consider campaign finance reform the foremost issue facing representative government in Virginia.

We are one of only a few states with no campaign donations limits at all. We pay for that in legislation enacted and not enacted because of the preferences of huge donors. And in the stink of legal public corruption.

It also drives way up the cost of running and keeps good people from participating.

The new governor will have to lead. Continue reading

Will Cuomo Pull a Northam?

Andrew Cuomo

by Kerry Dougherty

I was on the elliptical at the gym yesterday, flipping through cable news. It was all Cuomo, Cuomo, Cuomo. Even on the networks that once treated the New York governor as if he tinkled perfume.

One after another, New York politicians called for Cuomo’s head and predicted that he’d be gone soon. A month at most.

“There is no way Andrew Cuomo survives this,” one declared. “Every Democrat in the country has called on him to resign.”

Hah, I thought. Does Ralph Northam ring a bell? Continue reading

The Accelerating Scale of the Legislate-Regulate-Spend-and-Repeat Cycle Has Broken Government

by James C. Sherlock

Virginians – the state and individual citizens – have received over $81 billion in COVID-related federal funding. That comes to $9,507 for every man, woman and child in the Commonwealth.  Big money. 

That was Virginia’s share of $5.3 trillion in federal spending just on the pandemic (so far). A trillion dollars is a million million dollars. A thousand billion dollars.

For comparison, GDP was about $21 trillion in 2020  It is projected to total just short of $23 trillion this year.  The national debt is $29 trillion and growing. A little over $86,000 for every American. That figure does not include the $5 trillion in additional spending pending in the Congress.

Every day we spend $1 billion on interest with interest on the 10-year treasuries at 1.18% today. The Congressional budget office predicts 3.6% before 2027. Do the math. That is $3 billion a day — well over a trillion dollars a year — in interest. 

Relax. If you thought I was about to launch off on a discussion of drunken sailors, writing checks that our grandkids will have to make good, and the fact that inflation will drive interest payments ever upward, be reassured I am not.

This is about the demonstrated inability of many government agencies at every level to regulate, administer, oversee, spend and repeat with anything approaching efficiency or effectiveness.  Continue reading