Did GreenTech's Contract with EB-5 Visa Applicants Violate the Law?

Morning Jolt
. . . with Jim Geraghty

August 13, 2013

Did GreenTech's Contract with EB-5 Visa Applicants Violate the Law?

Connect the dots. Here's what the SEC investigation of Terry McAuliffe's electric car company is about, in part:

An electric-car company co-founded by Virginia gubernatorial candidate Terry McAuliffe (D) is being investigated by the Securities and Exchange Commission over its conduct in soliciting foreign investors, according to law enforcement documents and company officials.

In May, the SEC subpoenaed documents from GreenTech Automotive and bank records from a sister company, Gulf Coast Funds Management of McLean. The investigation is focused, at least in part, on alleged claims that the company "guarantees returns" to the investors, according to government documents.

Here's the GreenTech Automotive promissory note, as obtained and published by the Franklin Center's Kenric Ward:

"GTA Shall Issue Individual Certificate To The Fund For The Benefit Of The Individual Investor A Unit Of Preferred Stock To Be Converted At The End Of The Five-Year Term To GTA's Common Stock Market Value Of Five Hundred And Fifty-Five Thousand Dollars ($555,000). Alternatively, GTA Promises To Purchase back Its Preferred Stock Unit As A Way Of Reducing The Proportion Of Preferred Equity From The Individual Investor Named Herein ________________, In Case GTA Fails To Go Public Upon Five-Year Anniversary Of The Named Investor's Investment In The Amount Of Five Hundred Thousand US Dollars (USD $500,000.00)"

Meaning the investor gets either preferred stock worth $555,000, or GreenTech buys back its preferred stock for $500,000.

An EB-5 visa requires an investment of $500,000 . . . and investors were charged $55,000 as an administrative fee, according to the offering memorandum.

So the only potential loss to investors was the $55,000 administrative fee. As any EB-5 site will tell you, the investment from the EB-5 applicant must involve risk; otherwise it's not really an investment. As one immigration lawyer put it, "The law requires the capital to be at risk, and case law forbids guaranteed redemption agreements — a certain price and a certain time. That's not really an investment; it's more like a loan."

So doesn't that sound an awful lot like guaranteeing a return?

Just How Should Conservatives Overcome a Media Disadvantage?

The Breitbart guys have a new project:

Beginning next month, Breitbart News Editor-At-Large Ben Shapiro will be leading the launch of a new project of the David Horowitz Freedom Center: TruthRevolt.org, an activism program designed to "unmask leftists in the media for who they are, destroy their credibility with the American public, and devastate their funding bases."

The program is being described as a conservative counterpunch to Media Matters, the Obama-linked organization that focuses on silencing conservatives in the media. "For too long, we've played by the Marquis of Queensberry rules, allowing the left to stifle the truth and silence truth tellers in the name of their politically correct narrative. Now we're taking the battle to their home turf -- and we will do so aggressively and unwaveringly, every single day. This is just another avenue for applying Breitbart's fighting spirit to the battle against those who would destroy what America stands for," Shapiro said.

I'm on a conservative e-mail list, and participants there responded with a mix of enthusiasm and yawns, wondering how different this new program's operation would be from existing anti-liberal-media-bias efforts (the Media Research Center, the Washington Free Beacon, the NRO Media Blog, a thousand bloggers) and how it would differ from the regular Breitbart.com operations.

(If you believe that the national news is the real opposition party to Republicans, note that the RNC is now advertising its videos on the CNN and NBC News YouTube pages.)

On the e-mail thread, one participant noted that over at Powerline, a reader poll overwhelmingly identified "liberals dominate the news media and academia, which is what really counts" as the primary reason that conservatives don't do better politically. (It's not surprising that conservatives would identify the media as the primary problem, because that conclusion means that the primary problem isn't conservatives.)

Of course, when conservatives lament the media, they're discussing a bunch of problems all lumped under that label:

The Associated Press provides copy for a large percentage of nation's newspapers, and the New York Times remains the role model for most print journalism professionals and students. Of course, print newspapers are dying.

The difficulty in spreading a conservative story, idea, or argument outside of the conservative "ghetto." The mainstream media actually covers a lot of what we on the right consider to be news — albeit sometimes begrudgingly. The difference is that those stories rarely turn into a steady drumbeat of stories, the drip-drip-drip, day after day, that create a "narrative" that subsequent stories reinforce. For example, Time could easily have taken the Eliot Spitzer, Anthony Weiner, and Bob Filner scandals and run a cover story, "THE DEMOCRATS' WORSENING WOMEN PROBLEMS" — but that, of course, wouldn't fit the narrative.

Hollywood, which is not the news media per se, but takes relatively current events and usually dramatizes them in ways that serve the Left — e.g., the anti-war films of the Bush years, Game Change, the upcoming Hillary Clinton miniseries on NBC, etc.

The aging of the talk-radio audience, and the inability to attract a younger audience to a medium conservatives dominated for decades.

The low-information voters who don't really pay attention to anything about the news barring some epic crisis like 9/11 or the economic meltdown, and thus develop worldviews based upon everything from pop culture to political figures' personal charisma to random chance.

Related, a steady erosion in what conservatives once thought was "common sense" but now are apparently increasingly rare beliefs: There is no such thing as a free lunch. If you're able-bodied, you ought to work. Grown men and women ought to try to be good role models for children. Save for a rainy day. While these aren't necessarily issues of media coverage, the conversation in both popular culture and the starting point for news coverage no longer begins with this frame of reference.

The preeminence of Fox News Channel has become something of a mixed bag for conservatives. It is undoubtedly a wild success in terms of ratings and building an audience. But its style — attractive anchors, bright red sets and whooshing graphics, a table-pounding populist tone, and until recently, the occasional live coverage of a high-speed car chase or Anna Nicole Smith–style tabloid story — have come to define conservatism in the public's mind. With only so many hours in the day, some aspects of conservatism inevitably get shortchanged — you rarely get anyone echoing the high-minded literary style of Tom Wolfe; religious conservatives are mostly relegated to Mike Huckabee's weekend show; foreign-policy coverage comes and goes and only gets regular discussion on Oliver North's War Stories. The faces of the network are generally older, although they added the working-class, anti-Occupy sarcasm of Adam Carolla and have Red Eye (still airing at 3 a.m. Eastern); perhaps Megyn Kelly will bring a younger audience in prime time.

At a recent gathering of conservative bloggers, there was a recognition that when all of us push in the same direction, we can really amplify each others' voices — the example that focused us at that moment was mocking the media's refusal to cover the horrors of abortionist Kermit Gosnell. Unfortunately, organizing us is like herding cats; we all have different interests, passions, and priorities. Some work at organizations that can't endorse candidates and some are explicitly in the candidate-election business.

There's more discussion and cross-pollination among righty bloggers than ever before, but it's still difficult to get all of us pounding the same argument simultaneously. It has to be organic, something that catches everyone's eye and quickens their pulse simultaneously.

Obamacare, the 'Chinese Democracy' of Legislation

Obamacare continues to be delayed, one piece at a time. Avik Roy:

First, there was the delay of Obamacare's Medicare cuts until after the election. Then there was the delay of the law's employer mandate. Then there was the announcement, buried in the Federal Register, that the administration would delay enforcement of a number of key eligibility requirements for the law's health insurance subsidies, relying on the "honor system" instead. Now comes word that another costly provision of the health law—its caps on out-of-pocket insurance costs—will be delayed for one more year.

It's like they're making it up as they go along, isn't it?

ADDENDUM: The Wall Street Journal's John Harwood tweaks the Washington Post's Richard Cohen: "You know columnist (Richard Cohen) is starving for material when he hits POTENTIAL candidate (HRC) for lacking message 3 years before election."

NRO Digest — August 13, 2013

Today on National Review Online . . .

RICH LOWRY: The president won't acknowledge that health-insurance premiums are going up. What Obama Can't Admit.

ROBERT COSTA: GOP leaders are trying to avoid a government shutdown. Shutting Down a Shutdown.

ANDREW STILES: How to fight Obamacare: Risk a government shutdown, or wait for the backlash? To Defund or Not to Defund.

VICTOR DAVIS HANSON: In our unheroic age, victimhood has replaced valiant struggle. Our Postmodern Angst.

CHARLES C. W. COOKE: The New York Nanny's gun-control group is losing support. Mayors Against Mayors Against Illegal Guns.

PATRICK BRENNAN: Rand Paul still doesn't understand monetary policy. Milton Friedman, Rand Paul, and Restraint.

To read more, visit www.nationalreview.com

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