Terry McAuliffe’s firm rattles hornets’ nest with suit against Franklin Center

Terry McAuliffe’s firm rattles hornets’ nest with suit against Franklin Center

I listened in on a conference call with the Franklin Center today regarding the lawsuit filed by Terry McAuliffe’s former firm, GreenTech, alleging libel by the Franklin Center’s Watchdog investigative unit. McAuliffe apparently resigned recently his position at GreenTech retroactive to last year.

The lawsuit is available here, and also embedded at the bottom of this post. Apparently the complaint is being widely circulated, but as of today the Franklin Center had not actually been served.

It has all the hallmarks of a classic SLAPP suit designed to stifle investigative reporting and criticism, but it was filed in Mississippi which doesn’t have an anti-SLAPP statute unlike most states.

Jason Stverak, President of Franklin, stated that “this is not a partisan issue” and “the First Amendment is under attack.” He said that the Franklin Center was “not going to back down as an organization.”

I don’t know much about McAuliffe’s background with GreenTech and a company called Gulf Coast Funds Management, and alleged dealings with Chinese business interests with regard to visas in exchange for investments.

But now I’m very interested. We will be following this case carefully. And so will much of the conservative blogosphere which until now has not focused on the issue as part of McAuliffe’s campaign for Governor of Virginia.

If McAuliffe or GreenTech thought the lawsuit would buy them quiet or insulate them from scrutiny, in fact it will have the opposite effect, Lawfare for Terry McAuliffe >> The Streisand Effect.

Here is the statement issued by The Franklin Center in response to the lawsuit:

A fledgling electric car company founded by Virginia gubernatorial candidate Terry McAuliffe has sued Watchdog.org following 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.”

Jason Stverak, president of Watchdog’s parent company the Franklin Center for Government and Public Integrity, said the lawsuit is baseless.

“As Watchdog explained in clarifications and updated versions of the articles posted on April 5, these articles were not intended to – and did not – accuse GreenTech of fraud,” Stverak said. “We are confident that GreenTech’s claims are without merit and we will continue to report on this important story.”

GTA counts among its allies Hillary Clinton’s brother, Anthony Rodham, who shares an office with GTA and is CEO of Gulf Coast Funds Management, an EB-5 center that raises visa-investor money for GTA. McAuliffe also was chief fundraiser for Clinton’s presidential bid. Bill Clinton made a high-profile visit to the company last year.

The lawsuit, accusing Watchdog of defamation and interference with business relations, was filed Monday in Mississippi where GTA says it plans to build an auto plant. On April 1 and 3, Watchdog detailed the travails of McAuliffe’s car company funding and challenges to enter the marketplace by next year. The lawsuit also names two web sites that ran the Watchdog story, one in Chinese.

In response to McAuliffe’s 2009 request for public support of GreenTech Automotive in his home state of Virginia, then-Gov. Tim Kaine’s administration expressed “grave doubts” about the project’s viability, according to documents obtained by Watchdog.org, National Review and Washington Post.

Greentech v. Franklin Center — Complaint

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