Politics

Investigation Exposes Terry McAuliffe’s Botched $1.4M Deal With Chinese Company

VA governor put taxpayer funds toward project that created no jobs

AP

A new report documents how Democratic Virginia Gov. Terry McAuliffe’s administration failed to vet a Chinese company with which it made a botched economic development deal that cost taxpayers in the state $1.4 million.

The company, Lindenburg Industry LLC, received the taxpayer funds in 2014 to open a $113 million factory at an old furniture plant in Appomattox County. The state declared the project dead in December and the facility went into foreclosure. Over $450,000 in contractor bills for the site still have yet to be paid.

An investigation by The Roanoke Times found:

State analysts relied on a company website produced in China featuring misleading information, including the listing of a North Carolina address where the company never was located and production photographs and text lifted from an unaffiliated American company. Text similar to material on the website appeared in a pre-approval request to the state commerce secretary and a briefing for the governor before his meeting in Beijing with a project principal. Officials also relied on a site consultant who vouched for the company but hadn’t asked basic background questions, such as the company’s address in China, until shortly before the deal was closed. Approached by the same players in 2013, North Carolina officials made checks and asked questions that Virginia officials did not. Only after the project appeared to stall did Virginia officials ask for company financial statements.

When announcing the deal in November 2014, McAuliffe promised that it would create 349 new high-skilled manufacturing jobs in the county.

"An investment and project of this significance is transformational for Appomattox, and the Commonwealth is honored to add another international company to its roster," McAuliffe said at the time. "I had the great privilege of meeting with company officials in Beijing, China, and close this significant win during my Asia marketing mission and I am thrilled that Lindenburg Industry is establishing their first U.S. manufacturing operation in Virginia."

Ultimately, the botched project created no jobs.

In the wake of the Roanoke Times investigation, McAuliffe defended the state’s economic development record but said that he had asked for a review of the project.

"I’ve asked [the Virginia Economic Development Partnership] to go back and look at every project. I met with them today," McAuliffe said, according to the Richmond Times-Dispatch. "They feel very confident about the deals that we have done. Out of 566, one has an issue. That’s a pretty good track record in the business community."

McAuliffe was elected governor in 2013 after campaigning on his entrepreneurship and experience creating jobs. At the time, critics pointed to his failed pledge to create jobs with his electric-car company, GreenTech Automotive, as evidence against his claims.

The Virginia governor has busied himself by campaigning for ally Hillary Clinton in recent days, stumping for the Democratic presidential candidate in Iowa earlier this month.