In McAuliffe's Former Car Company, Echoes of Romney and Bain

PHOTO: GreenTech Automotive chairman Terry McAuliffe Rogelio V. Solis/AP Photo
Former Mississippi Gov. Haley Barbour, left, and GreenTech Automotive chairman Terry McAuliffe take a quick spin in the plant after the unveiling of the company's new electric MyCar in Horn Lake, Miss., July 5, 2012.

Remember the Democrats' withering attacks on Mitt Romney for his business dealings in China and holdings in the Caribbean? The tables have turned. Virginia gubernatorial candidate Terry McAuliffe faces attacks from Republicans over his former leadership of an electric car company called GreenTech Automotive, which originally sought to establish its manufacturing base in Virginia but later landed in Tunica, Miss.

The Securities and Exchange Commission is investigating GreenTech, and Republicans have pounced on McAuliffe for seeking out Chinese investors, lobbing charges of potential national security risks at the Democrat.

The SEC inquiry centers around GreenTech's use of a U.S. visa program commonly known as EB-5, which provides visas to foreign investors who invest more than $500,000 in American companies.

On Thursday, the conservative opposition-research super PAC America Rising requested that McAuliffe and Charles Wang, current CEO of GreenTech, release all records and documents the company gave to federal investigators.

McAuliffe left GreenTech in December 2012 but retains a significant ownership stake. In a statement this week said he "has no knowledge of any investigation" and if "there are concerns as to whether procedures were properly followed, those concerns should be examined and I'm glad the company said it is cooperating fully."

In a letter to McAuliffe and Wang, America Rising pointed out that McAuliffe himself asked for a similar disclosure from then-president George W. Bush in 2002, when Harken Energy, of which Bush was a director in 1990, faced investigation from the SEC. (Ultimately, Bush was cleared of any wrongdoing.)

"Today, President Bush offered his third and latest explanation over his role in Harken Energy's questionable business practices. Every day, more questions arise," McAuliffe said in 2002. "President Bush should stop refusing to release his SEC files and let the American people, and not his lawyers, decide what is relevant."

Four Separate Companies

GreenTech's enterprise is a complicated one, involving at least four separate companies.

The first company is Capital Wealth Holdings, which owns a majority stake in American-based GreenTech. Capital Wealth is owned by a group of investors, controlled by CEO Charles Wang and incorporated in the British Virgin Islands.

McAuliffe owns the rest of GreenTech, according to a filing with the state of Mississippi. He still retains a 25 percent stake in the company, according to the campaign, while Capitol Wealth owns 75 percent.

Then there's Gulf Coast Funds Management, which assists GreenTech in gaining investments and helping investors obtain visas. It is helmed by president and CEO Tony Rodham, brother of former secretary of State Hillary Clinton. Gulf Coast established itself as an approved regional center in Mississippi for attracting foreign investments in exchange for EB-5 visas; it solicits those investments for GreenTech and seeks approval for those who invest over $500,000. Gulf Coast shares an office address with GreenTech in McLean, Va.

And then there's the third company, American Immigration Center, described as GreenTech's "sister company" in emails to the Virginia Economic Development partnership by Gary Tang, GreenTech executive vice president. American Immigration Center owns Gulf Coast Funds Management, Tang wrote to the Virginia officials in an email.

The fourth company, GreenTech itself, makes the cars. It used to be known as Hybrid Kinetic Automotive Corporation and was owned by Hybrid Kinetic Automotive Holdings, according to documents from the Department of Homeland Security's Office of the Inspector General obtained by Grassley. It has been owned by Capital Wealth Holdings since 2010, according to a sale agreement obtained by ABC News.

Political Connections Used to Game the System?

Republicans have asked whether McAuliffe and Rodham used their political connections to game the U.S. EB-5 visa system and push visas through federal immigration review.

Democrats aggressively attacked Romney in 2012 for Bain Capital's investments in Chinese companies and for Romney's own holdings in the Cayman Islands, through his blind trust—accusing Romney of "offshoring" jobs and profits and of using the Caribbean as a personal tax haven.

This year, Republicans have accused McAuliffe of posing national security risks by establishing a channel for foreign investors to obtain visas.

"Terry McAuliffe needs to be straight with Virginians about his role in encouraging the approval of visas for foreign nationals who may have been national security risks," the Virginia Republican Party said last month, in a press release attacking McAuliffe and his former company.

One of GreenTech's potential investors works for a Chinese telecommunications company, Huawei Technologies, investigated by the House intelligence committee over alleged ties to Chinese intelligence services, according to Dept. of Homeland Security documents obtained by Sen. Chuck Grassley.

Gulf Coast Management sought a visa for Zhenjun Zhang, the potential GreenTech investor who was a vice president of Huawei. Huawei has previously said those charges were not true. (The company did not return a phone call or email from ABC News seeking comment.) Last month, Grassley noted that there was a GreenTech investor from Huawei, but Simone Williams, legal counsel for Gulf Coast Technologies, tells ABC News that there is only one potential investor who is employed by Huawei (Zhang), and his visa has not been approved.

In emails obtained by the office of Sen. Chuck Grassley, R-Iowa, U.S. Citizen and Immigration Services officials flagged Zhang's so-called EB-5 visa filing and the House Intelligence Committee's probe of that company as an area of concern. Grassley voiced concerns about Zhang's investment.

"His application is still in the relatively early stage of the process," GreenTech's Williams told ABC News, noting that GreenTech has no information that he is connected to any national security concerns and the visa is still pending and is within the "typical petition, normal processing times."

If Huawei Technologies sounds familiar, it's because the Obama campaign featured the company in an anti-Romney ad during the 2012 campaign.

National Security Concerns Raised

In the ad, using quotes from The Washington Times and CBS News' "60 Minutes," a voice-over calls Huawei Technologies "up to its eyeballs with the Chinese military" and that the company "raised concerns about national security, Chinese espionage."

"But it didn't stop Bain Capital from trying to partner Huawei with a U.S. defense contractor," the announcer says. "And Mitt Romney had a piece of the deal. Intelligence leaders called it 'a threat to national security,' even urged Romney to oppose the deal, but he said no. Putting profits from China ahead of security for America."

When asked why Gulf Coast would want to associate with a company that is accused of having national security issues and even highlighted in a negative Obama ad during the campaign, Williams noted that Huawei has "tens of thousands of employees" and they leave the vetting to USCIS.

"When someone wants to invest in us, we provide all information that we can gather and submit information and documents to USCIS for review," Williams said. "USCIS and CBP is responsible for conducting the necessary background checks. Furthermore, it is USCIS' ultimate decision and responsibility to determine whether an investor is qualified or not. We have no way of knowing whether a particular investor/individual is linked to Chinese government intelligence."

GreenTech told ABC News they "do not know" Zhang and "he is not currently an investor" nor did they know that he is a "Huawei VP." They explained how the process works: After a lawyer from a regional center, like Gulf Coast, reviews background records including "criminal records" and "source of funding documents," a regional center "will file a petition to the USCIS."

"It is USCIS's job to conduct background check and it is USCIS's ultimate decision whether a particular investor is qualified to be an EB5 investor. If USCIS approves the petition, then the petitioner's money will released to the Fund. The Fund pools together all EB5 funds raised to provide a loan to GTA (GreenTech Automotive)," GreenTech told ABC News in an email. "The relationship is really between GTA and the Fund (here Gulf Coast), not between GTA and the individual investor. After we read (in) the paper about this Huawei VP, we asked Gulf Coast Funds Management about whether there is such an applicant. Gulf Coast's general counsel informed that they have this person's petition filed last year and it is still pending."

GreenTech added that the "current procedure" for the EB-5 program is for the "federal agencies to screen out people we do not want in the US."

"We are a small startup company that has been striving to build electrical vehicles and create jobs in Mississippi, a place with high unemployment rate. We have been receiving bi-partisan support for the past four years until the recent gubernatorial race in Virginia. In the past four years, we have put more than 150 people on our pay roll," GreenTech told ABC in response to questions about its foreign investments and the criticism it received. "This company should not be the victim of a political battle."

Editor's note: This story has been updated to specify that Terry McAuliffe retains continued part ownership in GreenTech and has not owned any part of its foreign-based holding company, Capitol Wealth Holdings, as his campaign pointed out to ABC News. It has also been updated to reflect that Zhenjun Zhang is a potential investor: Gulf Coast Funds Management has sought an investor visa for him, but his investment in GreenTech through Gulf Coast is pending visa approval, Gulf Coast confirmed to ABC News.