Virginia race: Terry McAuliffe raises money, Ken Cuccinelli raises hell

Reuters

Former US President Bill Clinton (L) discusses electric vehicle technology with GreenTech Automotive President Terry McAuliffe in New York September 20, 2010.

Article Highlights

  • Virginia's governor race is a battle of crony capitalism versus principled conservatism.

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  • Big-government Democrat Terry McAuliffe has enriched himself personally by leveraging political connections and chasing subsidies.

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  • McAuliffe: "it's a lot easier to raise money for a governor. They have all kinds of business to hand out, road contracts, construction jobs, you name it."

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Virginia's governor race is a battle of crony capitalism versus principled conservatism.

Big-government Democrat Terry McAuliffe has enriched himself personally by leveraging political connections and chasing subsidies, and he's winning the fundraising contest by raking in big bucks from bankers and developers.

Conservative Republican Ken Cuccinelli, meanwhile, has turned off some big GOP donors in Virginia in part by his aversion to pork and his opposition to developer-pushed tax hikes.

"The tale of two driveways" can demonstrate the difference between McAuliffe's corporatist approach and Cuccinelli's free-market approach.

Cuccinelli first got into politics a decade ago, as a state senator. His first fight was against a proposed tax hike in Northern Virginia. His chief opponents were real estate developers.

A group calling itself Citizens for Better Transportation lobbied for a higher sales taxes to fund new roads and wider roads in Northern Virginia. CBT was funded entirely by Virginia's biggest real estate developers. Not coincidentally, these developers owned land near where the new roads would be built. "The developers are asking you to pay for their driveway," Cuccinelli would tell voters.
 
The Fairfax Chamber of Commerce, a leading advocate of tax hikes for pavement, disparaged the idea of paying for the roads with tolls -- that would, after all, undermine the purpose of externalizing the costs of the roads. Cuccinelli, as a state lawmaker and attorney general, championed toll lanes on the Beltway. When Bob McDonnell this year wanted to stop funding highways with the gas tax, Cuccinelli countered, arguing that drivers ought to pay for roads.

You use it, you pay for it. That's a fairly free-market idea. It's also anathema to Terry McAuliffe.

McAuliffe's figurative driveway is down in Mississippi. McAuliffe was a fundraiser for Bill Clinton, which tells you he's not above the intermingling of politics and profit. More explicitly, McAuliffe once said, "it's a lot easier to raise money for a governor. They have all kinds of business to hand out, road contracts, construction jobs, you name it."

McAuliffe sees economic policy as intertwined with donor profits. And in his understanding of business, profits are tied to government.

Early in the Obama administration, it was pretty obvious where the political money would be flowing: Obama was bailing out the auto industry and pouring billions into green technology, and so Terry McAuliffe took a job as chairman of GreenTech automotive.

Greentech depended on politics for profit. As a 2009 letter seeking funding for a Greentech factory explained, "GreenTech Automotive believes that increasing emission standards will present a good business opportunity for new hybrid cars." Get enough regulations on competitors, pocket enough subsidies, and this business might just be a winner.

Electric cars weren't the only things GreenTech was selling -- they were also hawking visas. Through the federal EB-5 Visa program, McAuliffe's company tried to attract foreign investors who would win visas in return. One Virginia official, in an email since made public, worried about GreenTech's plan to open a Virginia factory that would have access to these EB-5 visas: "[I] still can't get my head around this being anything other than a visa-for-sale scheme with potential national security implications."

Here's another thing that drove McAuliffe and GreenTech down to Mississippi: The Magnolia State was much more generous with the corporate welfare. In fact, McAuliffe has criticized Virginia for not trying harder to woo his company.

Among the many gifts that Mississippi and Tunica County gave GreenTech to build the plant, was, so to speak, a driveway -- paid for by U.S. taxpayers.

The U.S. Department of Housing and Urban Development gives out Community Development Block Grants. States distribute this money to worthy projects. The count government promised to obtain $3 million in HUD money "to create a grand entrance road and supply utilities" to the GreenTech factory, according to an email written by a local development official.

So Terry McAuliffe's company is trying to get you to pave its driveway down in Mississippi.

When you hear that some in the Republican business community are shying away from Ken Cuccinelli, or when you see the $12 million Terry McAuliffe has raised so far, it's helpful to recall the tale of two driveways. Cuccinelli wants businesses to pave their own driveways -- that's the difference between being "pro-business" and being free-market. McAuliffe, meanwhile, wants taxpayers to subsidize businesses -- which has worked out pretty well for him.

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