VIRGINIA REEL

Cajun Joe

The year following a presidential election is generally considered to be an ‘off-year’ for political junkies. But out-of-cycle gubernatorial races in New Jersey and Virginia can still provide good grist. This year is no exception.

While Chris Christie is considered a shoo-in in the Garden State, it will still be interesting to see how far and on which issues he drifts to the right to position himself for a run at the 2016 GOP presidential nomination.

Virginia, though, offers potential for a real horse-race, pitting two candidates with strong negatives, even within their own parties.

Ken Cuccinelli

Ken Cuccinelli, Virginia’s activist Attorney General, is a poster child for Christian conservatives. A Catholic, ‘the Cooch’ is embraced by evangelicals for his personal ‘not under any circumstance’ position on abortion. As a state senator, Cuccinelli supported so-called ‘personhood’ legislation which would recognize rights for the unborn from the time of conception. He recently clarified his position, saying that as governor he would not interfere with access to contraception, although some regard this as ‘lawyer-speak,’ as the actual definition of ‘contraception’ is a matter of dispute.

Cuccinelli used his position as Attorney General to advance conservative causes. He was among the first state officials to file suit in federal court challenging the constitutionality of Obamacare. He also stepped into the climate change controversy by opening an investigation of former University of Virginia climate scientist Michael Mann, alleging he used fraudulent data to secure state funding for his research. Cuccinelli filed a motion to require the University to turn over to his investigators thousands of emails between Mann and his colleagues. Eventually, the Virginia Supreme Court threw out the case, but not before the state-run university spent some $600,000 in legal fees fighting its own lawyer.

Recently, Cuccinelli raised eyebrows with his attempt to revive Virginia’s sodomy law after a federal appeals court struck it down. Cuccinelli claims that his interest is to use the law to prosecute pedophiles. Others contend there are sufficient other laws protecting minors from sexual abuse, and that his real motivation is more about creating an inhospitable climate for gays and lesbians. Cuccinelli is also a proponent of the so-called ‘Repeal Amendment,’ giving States constitutional authority to override federal law.

Cuccinelli talks on Hardball about the Repeal Amendment

Cuccinelli stepped on establishment Virginia Republican toes when he ‘cut in line’ ahead of the more moderate Lt. Governor Bill Bolling in the race to succeed current governor Bob McDonnell. Virginia governors are limited to a single consecutive term. For the better part of his four-year term, McDonnell governed as a moderate conservative, even though the GOP had effective control of both legislative houses during much of the time. He was riding a wave of popularity that included frequent mention as a possible vice-presidential candidate in 2012, until a falling out with the Governor’s executive chef led to charges of cronyism that include gifts to McDonnell of a Rolex watch, a ‘loan’ of $120,000 for which there was no documentation, a Bergdorf’s shopping spree for McDonnell’s wife, and extravagant gifts to their children from Jonnie Williams, a political supporter and entrepreneur, whose tobacco-based nutritional supplement business the Governor and his wife were flacking.

As it turns out, Ken Cuccinelli himself accepted ‘gifts’ from the same donor, in the form of use of a vacation home, catered meals and private-jet trips. While the McDonnells have paid Mr. Wiliams back the gifts and loans, Mr. Cuccinelli, the father of seven children, says he is not in a financial position to make restitution and has no intention to do so.

Mr. Cuccinelli’s campaign emphasizes none of his extreme positions, though. Instead, it is focused on the traditional ‘New Dominion’ issues of education, transportation, low taxes and job creation. His stated policies are, for the most part, orthodox conservatism. he is big on school vouchers or tax credits for parents wishing to send their children to private schools. And he favors an amendment to the Virginia Constitution to allow vouchers to be used for sectarian schools. As a state senator, he proposed a resolution to amend the U.S. Constitution to repeal birthright citizenship. He opposed McDonnell’s bi-partisan transportation bill, believing it would lead to new taxes. Like all candidates for governor anywhere, including his opponent, he wants to create a positive business climate and to grow jobs.

Mr. Cuccinelli does, occasionally, have the capacity to surprise. He has become something of a champion in expanding DNA testing to free those wrongly convicted, and in a complete about-face, now supports restoration of voting rights to non-violent felons. And his campaign, at least, makes much of his activism against sexual assault while enrolled at the University of Virginia. He has taken strong positions against sex trafficking. More recently, though, he declined to join 47 other state attorneys general in a letter urging Congress to extend the Violence Against Women Act. Why would someone who has advocated for women oppose the VAWA? Some say it is because of language extending protections to same-sex spouses. Cuccinelli says it is simply his policy to not sign such joint letters.

Enter McAuliffe

Bill Clinton and Terry McAuliffe

If an observer might characterize Ken Cuccinelli as dogmatic, that same observer might call his opponent,Terry McAuliffe, opportunistic.

A New York Times article from 1999 quoted McAuliffe as saying “I’ve met all my business contacts through politics. It’s all interrelated.” A review of McAuliffe’s many complicated business dealings reveals that to be so. His business interests include relationships with Tony Coelho, former Speaker Jim Wright, Richard Gephardt, and, proving that business is non-partisan, Richard V. Allen, a National Security Advisor in the Reagan administration. But McAuliffe is best known as President Bill Clinton’s ‘money man’ and as Chairman of Hillary Clinton’s 2008 presidential campaign.

McAuliffe has been especially adept at turning his political contacts into business partners to fund his ventures — ventures that collapsed as often as they succeeded. Most notorious of these was a series of deals involving Federal City National Bank and American Pioneer Savings Bank, the latter owned by McAuliffe’s father-in-law. In each case, the banks ran afoul of regulators. In the former, the bank was eventually merged into another bank owned by Richard V. Allen. While investors faced substantial losses, McAuliffe himself landed on his feet in a new job with Allen’s bank, leading to charges that he saved himself at the expense of investors, a charge denied by McAuliffe.

The American Pioneer Savings Bank was both more complex and more controversial. Again the bank was in distress, and was seized by the Resolution Trust Corporation, the federal agency set up to deal with the S & L crisis. McAuliffe, who was also an investor, arranged a loan from his contacts at the International Brotherhood of Electrical Workers pension fund to buy seized real estate assets valued at $50 Million from the RTC for $38.7 Million. McAuliffe received a 50% stake in the new partnership by putting up $100 of his own money. The Union trustee who approved the loan was a former colleague of McAuliffe from the Gephardt presidential campaign. Not surprisingly, the venture turned out far better for McAuliffe than for the pension fund, as the Union eventually bought out McAuliffe’s 50% share. However, before McAuliffe sold his stake, he was able to secure an additional $6 million business loan from the pension, using his stake in the original partnership as collateral. That loan eventually defaulted, but by that time the Union pension fund itself already owned the collateral.

The pattern continued. Time and again, McAuliffe would enter into partnership using a little of his money, and a lot of someone else’s. In both success and failure, McAuliffe always seemed to come out ahead.

And this brings us to McAuliffe’s latest business venture, Green Tech Automotive, a holding company he founded in 2009. In 2010 the company acquired a Chinese automotive company, EuAutomotive, manufacturer of MyCar. McAuliffe sought to locate a production plant in Virginia, but ultimately was offered a better financial incentive to build in Mississippi. Originally touted to be a $1 Billion project employing 1500 workers and producing 150,000 cars per year, Green Tech has thus far fallen far short of the mark, with fewer than 100 employees. One wag referred to the project as a ‘Potemkin auto plant,’ a view reinforced by alleged difficulty reporters have obtaining a tour of the plant.

Green Tech has attracted investors by liberal use of the federal governments EB-5 visa program. That program grants green cards to foreigners who are willing to invest substantial sums in U.S. businesses. Both the SEC and the Department of Homeland Security have investigations underway of Green Tech’s use of the program, and, while no wrongdoing on McAuliffe’s part has been alleged, it does raise eyebrows, particularly when the company is owned by a well-connected Washington insider. Regardless, Terry McAuliffe very quietly, some say secretly, resigned his position as CEO of Green Tech in 2012, although his remaining financial interest is unclear.

See more on investigations of Green Tech

Given the history of each of the Virginia candidates, it is no wonder that polls focus as much on negatives as positives. In an August 21 Quinnipiac University poll of likely voters, McAuliffe’s favorable/unfavorable results broke 34/33, while Cuccinelli’s were 35/41. Neither is a great place for a candidate at this stage. And, for Cuccinelli, at least, voters seem to already know him, only 22% of responders said they didn’t know enough about him, while 31% felt that way about McAuliffe. Cuccinelli is underwater on questions of ‘honest and trustworthy,’ and by 14 points is failing the ‘understands problems of people like you’ question.

Quinnipiac Poll of likely Virginia voters

It is still early, though. While McAuliffe leads in the preference poll 48-42, there is time for that to change, particularly as the campaign goes into full-swing negative mode. Tradition has it that the party that wins the White House loses the Virginia Statehouse. Turnout is always an issue in this election. McAuliffe will hope to take advantage of the Obama campaign’s effective ground operation, while Cuccinelli will depend on his strong base among religious conservatives to get out the vote. Cuccinelli ads will certainly emphasize McAuliffe’s negatives, both to define him and to erode voter enthusiasm. McAuliffe and his allies, meanwhile, will attempt to scare women into voting by emphasizing Cuccinelli’s positions on social issues.

See ads from both camps: