Tag Archives: Carol J. Bova

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

Changing Culture with the Other CRT

by Carol J. Bova

The Virginia Department of Education (VDOE) document, “Navigating EdEquityVa — Virginia’s Road Map to Equity” lays out a back-door strategy for changing traditional American values and culture.

“The mission of the Virginia Department of Education,” says the Road Map, “is to advance equitable and innovative learning.” The document acknowledges senior staff, four departments and ten “organizations and thought leaders” for their research and scholarship contributions to EdEquityVA for Culturally Relevant/Responsive Teaching (CRT) — not to be confused with Critical Race Theory (also referred to as CRT).

While educators deny they teach Critical Race Theory in schools, they are up front about their commitment to Culturally Relevant/Responsive Teaching. What they seem unwilling to admit is that culturally relevant teaching is an outgrowth of Critical Race Theory. Continue reading

A Malicious Prosecution

by Carol J. Bova

During the Bob McDonnell administration, the Commonwealth of Virginia preserved 232,000 acres through conservation easements or donations, falling short of the governor’s 400,000-acre goal because of the tight economy. Seizing on the deficit in his 2013 gubernatorial campaign, Terry McAuliffe promised that he would “preserve at least 400,000 acres of open space.” He repeated the number in his first speech to the General Assembly after taking office in 2014.

By 2015, it became obvious McAuliffe could not meet his goal. Scrambling to save face, he announced in April 2015 the launch of “Virginia Treasures,” a strategy for conserving land and expanding access to public outdoor recreation. The goal was to identify, conserve, and protect at least 1,000 “treasures” by the end of his term.

It soon became apparent to many residents of Mathews County that their property and their homes fell within the pale, blue-coded areas of the map where McAuliffe hoped to find his Virginia Treasures. And so began a seven-year nightmare for the Eubank family as the local government tried to bully them, in what they saw as a grotesque abuse of bureaucratic power, to diminish the value of their private land so that it could be acquired for a public access site. Continue reading

VDH Still Can’t Count

by Carol J. Bova

In a blog post published yesterday, I noted that the Virginia Department of Health (VDH) COVID-19 dashboard breaks down vaccination status by racial/ethnic group and by age, but not by racial/ethnic groups and age.

Thinking that VDH might possess the data, even if it had chosen not to publish it, I submitted a Freedom of Information Act request. The answer can be seen in the screen grab above: “The record does not exist.” Continue reading

Gloucester School Board Nixes CRT

CRT in Gloucester County Schools? No thanks.

by Carol J. Bova

The Gloucester County Public School Board spelled out its opposition to indoctrination or teaching that encourages hate and division in Gloucester public schools in its Tuesday meeting. The Board voted 6 to 0 for a resolution opposing Critical Race Theory in their school district’s curriculum.

The resolution printed in the Mathews Gloucester Gazette Journal said:

Gloucester County Public Schools (in alignment with the mission, vision and core values of the school district) will not teach or embed material designed to indoctrinate students to specific beliefs, teach or encourage in any matter hate or division based on race, creed, color or religion, and confirm that topics such as, but not limited to, Critical Race Theory and The 1619 Project, are not, and will not be, part of the GCPS curriculum.

Continue reading

Making Money from Cultural Cleansing

This imagery was in preparation of the $430,000 contract with the University of Virginia to remove the George Rogers Clark bronze sculpture located at the UVa Corner Park.

by Carol J. Bova

Richmond business owner Devon Henry is best known for his role as owner of NAH, LLC, for procuring a $1.8 million contract from Richmond Mayor Levar Stoney to take down Richmond’s Confederate statues. While Stoney’s handling of the contract outside the normal procurement process became a political liability — a special prosecutor and the Virginia State Police are still investigating the deal — Henry has become the go-to guy for taking down monuments to Confederate generals and other symbols out of fashion with Virginia’s political class.

Henry built a construction company, Team Henry Enterprises, winning bids as a minority contractor, primarily from the federal government. In 2018, Team Henry broke into the state/local contracting business with a contract to erect the Memorial to Enslaved Laborers at the University of Virginia, which after eleven revisions totaled $5.5 million. Continue reading

Equity Innuendo

Where’s the beef?

by Carol J. Bova

In 1984 the Wendy’s fast food chain launched an advertising campaign in which the catchphrase was, “Where’s the beef?” The phrase entered the popular lexicon as a way to question the substance of an idea or claim. The time has come to dust off the phrase in this age of fast, loose and often-baseless charges of systemic racism.

In a July 8 article in the Gazette Journal, “Let’s talk about Diversity, Equity and Inclusion,” Mathews County Supervisor Melissa Mason slammed the county and its school system. “In our small, rural utopia of Mathews County, due to location, declining population and demographics,” she wrote, “we must be intentional with how we address ‘D-E-I”.’ We lack in these areas in our public school system and in our government.”

Oh, yeah? Anyone can say anything. What, specifically, is lacking? Where’s the beef to this accusation? Continue reading

Fear and Loathing in Mathews County

Menacing

by Carol J. Bova

When Mathews County Supervisor Amy Dubois offered a resolution on June 22 that the Board of Supervisors meet at the high school auditorium instead of the Historic Courthouse, surprised members of the public attending called out, “Why?”

At the meeting, all Dubois said was, “We were urged by an organization within the county to move to the high school.” Although it was not audible on a citizen’s recording, the Mathews Gloucester Gazette Journal added that she said “for safety reasons.” (County staff failed to broadcast or record audio for the meeting.)

Supervisor Paul Hudgins was not pleased about the resolution and clearly said on the citizen recording, “We voted on this last month, to go back to the old courthouse. We keep changing these meeting schedules like some people do their clothes.” Supervisor Jackie Ingram also objected, and she and Hudgins voted against the change, which passed 3-2. Continue reading

The Ballad Merger V: the Pandemic

Ballad Health nursing promotion

by Carol J. Bova

The nursing shortage was a top issue for Ballad Health from the moment the health system was created in 2018 from a merger of Mountain States Health Alliance and Wellmont Health System. The new health system, which served far Southwest Virginia and neighboring parts of Tennessee, laid out a plan in its first annual report to tackle the burgeoning workforce crisis that was afflicting much of rural and small-town America.

The annual report noted the following initiatives:

  • Putting $10 million annually into increasing nursing wages which affects one-third of [the] work force. The first two classes of the ETSU/Holston Valley accelerated BSN program graduated in May and August, 2018, producing a net gain of 34 additional nurse graduates above previous program capacity.
  • Contracting with Northeast State Community College (NESCC) for admission of 20 additional associate degree nursing students each spring semester starting January, 2019. … This provides an additional 20 new graduate nurses annually above current capacity at NESCC program.”

These measures were clearly stop-gap. First, while the $10 million annual increase to nursing wages might have helped retain nurses, it did nothing to train or recruit new nurses. Second, educating 52 new nurses (only 34 in Virginia) over two years was a positive but only a fraction of the number needed— even assuming they all wound up working for Ballad. Continue reading

Ballad Merger IV: Has Quality Improved?

Ballad Health signage at Lonesome Pine Hospital. Photo credit: WCB

by Carol J. Bova

As a condition of the merger between Mountain States Health Alliance and Wellmont Health System in 2018, the combined entity, Ballad Health System is required to periodically update Virginia regulators on health metrics for its far Southwest Virginia service territory. Those quality measures and actual performance must be accessible to the public on the Ballad website as well.

The reporting was suspended during the COVID-19 emergency before year-to-year comparisons for Fiscal Year 2020 were available. But Ballad did publish an Annual Report for Fiscal Year 2020 that contained partial data through February 2020.

The bottom line: Quality measures have been a mixed bag. Some measures have improved; a few have declined. As detailed in Parts II and III of this series, Ballad met expectations for cost cutting and restructuring. What isn’t clear from the limited data available is why there is “slippage” in some numbers from one year to the next. Important questions arise. Continue reading

The Ballad Merger III: Reshuffling, Reconstruction and Repurposing

Norton Community Hospital

by  Carol J. Bova

When Mountain States Health Alliance and Wellmont Health System merged to create Ballad Health in 2018, the healthcare companies justified the consolidation with the argument that the ability to cut costs and rationalize delivery of health services would yield tangible benefits to patients in Southwest Virginia and Northeastern Tennessee.

The previous article in this series, “Cuts and Consolidations,” detailed how  Ballad Health bolstered finances through shared value-based payment savings, bond refinancing, staff reductions and closures of off-site facilities. This article, Part III, shows how the company acted to lower costs and enhance revenue by consolidating medical services, repurposing hospitals, introducing telemedicine, and implementing a new IT system.

The Virginia Cooperative Agreement, which outlined the requirements of Virginia regulators, allowed repurposing as long as certain “essential services” were retained. Deploying telemedicine and rotating specialty clinics in rural hospitals would help it meet the requirement. Continue reading