U.S. Judge hands Watchdog a Victory over VA Governor’s Green-car Company
Sunday, July 27, 2014
Posted By Will Swaim On July 24, 2014
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HIT THE ROAD: Virginia Gov. McAuliffe, in one of his Green Tech Automotive electric vehicle prototypes. A judge threw out GreenTech’s libel case against Watchdog.
By Will Swaim | Watchdog.org
A U.S. judge in Mississippi on Thursday threw out an $85-million lawsuit in which an electric car company founded by Virginia Gov. Terry McAuliffe alleged Watchdog.org had libeled the firm.
Judge Michael P. Mills [3] said GreenTech Automotive failed to prove his Mississippi court had jurisdiction over Watchdog.org’s parent, Virginia-based Franklin Center, and Watchdog’s Virginia reporter, Kenric Ward.
The judge’s order [4]noted that Watchdog’s “articles were not aimed at Mississippi” or even GreenTech itself.
“The articles were aimed at McAuliffe and his bid to become Governor of Virginia, and McAuliffe sustained the ‘brunt of the harm’ of the published articles while GreenTech allegedly suffered from the residuary effects of the articles,” Mills said.
“The subject and ‘intended harm’ of the articles at issue in this dispute was McAuliffe — not GreenTech or Mississippi,” Mills wrote.
“This lawsuit against our news organization was an act of intimidation from the beginning, and we simply refused to cave,” said Jason Stverak, president of Watchdog.org’s parent Franklin Center.
While campaigning for Virginia governor, McAuliffe claimed he founded GreenTech [5] – evidence, he said, of his entrepreneurial skill and readiness to make Virginia a major player in the car business. But Watchdog investigations revealed that McAuliffe’s plan to build his plant in Virginia with government subsidies had been rebuffed by that state’s economic development officials, some of whom were concerned about GreenTech’s effort to raise cash through an unusual federal visa program. That process, called the EB-5 program, allows foreign nationals to obtain a U.S. visa in exchange for $500,000 investments in targeted U.S. businesses. GreenTech is one of those businesses.
On April 5, 2013, just days before GreenTech filed its libel suit against Watchdog, McAuliffe quietly disclosed that he had resigned four months before [6], on December 1, 2012. The retroactive resignation appeared to be an attempt to divorce McAuliffe from the company.
In its lawsuit, [7] GreenTech alleged that two Watchdog articles written by Ward defamed the company and damaged investor relations.
The electric-car company filed its lawsuit in Mississippi, where GreenTech says it is building an assembly plant.
But both GreenTech, its financial arm Gulf Coast Funds Management, and Franklin Center are headquartered in Northern Virginia.
“GreenTech has not made a prima facie showing that Mississippi was the focal point of the articles,” Mills wrote in his decision.
“There’s no denying that defending the First Amendment rights and responsibilities of our reporters has been costly to us in terms of time, people and money,” Stverak said, “but it’s hard to put a price on defending the Constitution.”
Had the case proceeded, likely deponents would have included Gov. McAuliffe and Anthony Rodham, Hillary Clinton’s brother who is president of Gulf Coast Funds Management, the Virginia-based firm that handles Chinese investments in GreenTech.
Will Swaim is editor of Watchdog.org and vice president of journalism at the Franklin Center. Full disclosure: He was deposed in the GreenTech Automotive libel case. Contact him at [email protected].
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