Politics

Virginia Governor’s Race: Voters have a clear choice

Virginia Governor's Race: Voters have a clear choice

With less than two weeks to go until the Virginia governor’s election, voters in the most-watched race in the nation have a decision to make—and it’s one that will have vast consequences—particularly if they should choose the hyper opportunist liberal over the calm and tested policy guru conservative.

Ken Cuccinelli, a lifelong Virginian who has served in the Virginia Senate and as Attorney General, is known as a policy-guy. Ok. He’s a wonk. He’s well-versed in state government, and deeply in tune with the concerns of Virginians—particularly Northern Virginians, having lived in that region all his life. Politics aside, there is broad consensus that he is more than qualified to serve as the Commonwealth’s chief executive.

The other fella, Terry McAuliffe, is a New York-born and raised political fundraiser who has taken great personal advantage of the high level contacts he quickly made in the political world to amass a personal fortune. His qualifications for governor are those contacts. He has no experience—and seemingly little interest—in the functioning of government or policy development. His experience in the business sector seems limited to being in the right place at the right time to cash in.

So why in the world is McAuliffe in the lead (though shrinking in Quinnipiac’s latest poll) at the moment? Two reasons: First, Ken Cuccinelli, the conservative stalwart known for speaking his mind and standing on principle rather than political expediency, has been hit painfully hard with the “extremist” label. The attack comes as no surprise—it is the entire Democratic strategy in Virginia this year—but the campaign had trouble introducing the mild, likeable family man to voters.

And secondly, yes, the media.  I’m not normally a “blame the media” type, it’s hard not to in this race. The Virginia and Washington, D.C. media have pursued any and every story involving potential problems for the current Attorney General with great vim and vigor. Fine. Yet that enthusiasm makes it all the more galling that they have done little  to report on the overwhelmingly problematic business background of Cuccinelli’s opponent, Terry McAuliffe.

In fact, so seemingly intent are they at protecting the Democrat that the Associated Press fired a well-respected veteran political reporter and an editor because of a reporting error that reflected badly on him—even though the error was corrected within a half hour of hitting the wires. No one believes the AP would have taken such action had the error implicated Cuccinelli.

For interesting material voters would surely need to know about Cuccinelli’s opponent in order to make an informed decision at the polls, reporters need not look very hard. McAuliffe has built an enormous personal fortune by taking advantage of the system—there are copious examples. And while those involved in his financial deals have often paid a heavy price, McAuliffe seems to always be one step ahead. He shrugs his shoulders and claims to have had no idea that there were problems. He didn’t see the memo, didn’t know there was an investigation, or didn’t know about the company’s financial issue.

Yet again and again, ever unchastened, he uses his access to people in high government places to secure favors and lucrative business deals for those who can help him financially. And he makes no bones about it.

”I’ve met all of my business contacts through politics. It’s all interrelated,” McAuliffe has said. His strategy: make a new business contact, ”then I raise money from them.” Or ”You help me, I’ll help you. That’s politics.” To Terry McAuliffe, maybe. But McAuliffe’s practices have caught the attention of federal regulators, and before he ran for governor, of the media.

The New York Times took note of McAuliffe’s brazen approach back in 1999: “Charting a new course, Mr. McAuliffe has transformed the art of raising money for public figures into the art of raising money for himself, leveraging a personal fortune from his political fund-raising contacts.”

Now it is possible he will become one of those people in high places: not only in a position to impact significantly the 2014 and 2016 elections, but also to hand out directly, to his friends and business associates, those lucrative contracts, perks and special favors. Think that’s a stretch? Think again. McAuliffe has made it clear he has no ethical dilemma in using the power of the governor’s mansion in this way. He wrote in his autobiography that governors “have all kinds of business to hand out, road contracts, construction jobs, you name it.”

UVa’s Center for Politics’ Larry Sabato describes McAuliffe as having enough business controversies “for any 10 people.” Yet in large part because of journalistic bias or just plain laziness, he has a shot to win the most hotly contested race in the country this year.

Terry McAuliffe epitomizes the good ‘ol’ boy politician—the one that makes backroom deals peddling his political influence, raising money for his pals from special interests and the mega-wealthy by making lucrative promises—and making himself a very rich man in the process.  McAuliffe is almost a caricature of himself: the crony politician who doesn’t pause even momentarily with any ethical dilemmas about his approach.

Even Bill Clinton has taken note and made light of his friend’s questionable reputation. He was asked if he would buy a new car from McAuliffe: “Absolutely, I would buy a new car from Terry.” Pause. “But a used car? I am not so sure about a used car.” At which point the former president laughed loudly.

The concern about McAuliffe’s business dealings is well placed:

  • In 1990, McAuliffe entered into a partnership with the International Brotherhood of Electrical Workers’ pension fund, which was run by McAuliffe’s pal Jack Moore. While the IBEW invested $39 million, McAuliffe put up a mere $100 (that’s right; no zeros are missing)—but under the terms of the agreement, both had a 50% interest in the venture.  A few years later, the union bought out McAuliffe’s interest for $2.45 million. While the pension fund managers got whacked with hundreds of thousands in fines for “imprudent investments” and had to repay the pension fund $5 million, Terry McAuliffe faced no repercussions.
  • In 1999, McAuliffe invested $100,000 in a company called Global Crossings. He walked away from that deal with a minimum of $8 million. Soon after he cashed out, the company filed for bankruptcy. According to the Associated Press, “investors lost $54 billion and 10,000 employees lost jobs.”
  • In 1999, McAuliffe joined the board of Telergy and convinced them to invest $40 million in real estate. They paid him $1.2 million for that advice. Two years later, and two weeks after McAuliffe resigned from the board, Telergy laid off 150 employees, giving them no severance pay. By the end of the year the company was bankrupt. McAuliffe said he was “not aware of what specific financial issues Telergy faced,” even though he had just resigned from its board two weeks earlier.
  • The Federal City National Bank was cited by federal regulators for “unsafe and unsound banking practices” when McAuliffe was its chairman.
  • The latest revelation is that McAuliffe, along with dozens of others, invested in a venture that defrauded insurers by stealing the identities of terminally-ill patients. He says he had no idea of the scheme.  Interestingly, McAuliffe did not disclose the investment—that yielded him a suspiciously high rate of return: at least $47,000 on an investment of $33,000—to the Virginia State Board of Elections when he ran for governor in 2009.
  • And of course, there is the ongoing , multi-tiered scandal over GreenTech, the electric car company McAuliffe promised to set up “right in the heart of Virginia” in order to create thousands of jobs.  The first part of the scandal involves the fact that the company, which McAuliffe decided to locate in the heart of Mississippi, took financial inducements from the state and local governments, but did little to nothing in Mississippi, leaving the state wondering where its investment went.  It is virtually impossible find out since McAuliffe’s company set up a holding company in the British Virgin Islands.
  • Problematic as the whereabouts of the public investment is, the larger impending scandal is over potential violations of the EB-5 Visa program—a program that grants some foreign investors US Visa’s . Allegedly, McAuliffe, partnering with Hillary Clinton’s brother, used his political connections to secure a meeting with immigration officials, regarding a Visa application that had already been denied, for a Chinese executive whose company the Obama Administration said was “up to its eyeballs with the Chinese military” and “raised concerns about national security, Chinese espionage.”

The Securities and Exchange Commission is investigating GreenTech’s activities, but no doubt we will hear nothing about it until after the election.  While McAuliffe quietly stepped down as CEO in December he remains one of their largest stockholders. He claims he was unaware of the SEC investigation when he stepped down as CEO.

The Richmond Times-Dispatch must be given credit for its story on GreenTech, because it also looked back over McAuliffe’s questionable business history, saying: “McAuliffe’s entanglement in the EB-5 Visa controversy is only the latest in the career of a man who has made millions as an investor, who raised millions more for Democrats and who has never considered it wrong to mix business and politics.”

Sabato voiced the concern of many: Terry McAuliffe’s “business ventures seem always to be interwoven with political influence—who you know rather than what you know. Nor have his businesses been roaring successes beyond benefitting McAuliffe’s personal bank account.”

With Terry McAuliffe, voters know only that they will get a mover and shaker who said recently that “he would wine and dine people in Richmond to get things done.” Even former Governor Doug Wilder—a Democrat—said McAuliffe’s only platform in the race has been “anti-Cuccinelli.”

With McAuliffe, Virginians would get someone the Richmond Times-Dispatch  said has a “troubling lack of mastery and odd flippancy” on issues, and “still isn’t ready for the office he seeks.”

Terry McAuliffe is ready to use the office he seeks for his personal advantage. There is absolutely nothing in his past to indicate otherwise. Virginians have a clear choice: being taken advantage of for the next four year, or giving the keys to the Governor’s mansion to a man whose mastery of issues and government is clear, and who will always put the interests of the home state he has been capably serving above his own.

Kate Obenshain, author of Divider in Chief: The Fraud of Hope and Change, is a writer, speaker, commentator and blogger. She is the former chairman of the Republican Party of Virginia. Her website is www.kateobenshain.com

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