|When Terry McAuliffe appeared with his good friend Bill Clinton at the ribbon-cutting for Mr. McAuliffe’s electric car company in July 2012, the campaign-style event, complete with “Born in the U.S.A.” blaring, was meant to supply the top line of his résumé as he positioned himself to run for governor of Virginia.
But less than a year later, the company, GreenTech Automotive, has become a potential embarrassment as Mr. McAuliffe campaigns on the slogan “Putting Jobs First” and seeks to keep the spotlight on the conservative social views of his Republican opponent, Kenneth T. Cuccinelli II, the state attorney general.
Mr. McAuliffe resigned as GreenTech’s chairman last year but publicly acknowledged it only this month. Documents have surfaced questioning his explanation for why he located the plant in Mississippi, not Virginia, including memos from Virginia officials expressing “grave doubts” about his business model and suggesting its financing was a “visa-for-sale scheme” for Chinese investors.
Mr. McAuliffe, 56, a legendary Democratic fund-raiser who was chairman of Hillary Rodham Clinton’s 2008 presidential campaign, said the struggles of GreenTech — which once promised 1,500 jobs but today employs only 78 at its plant — are typical of any start-up in a tough economy.
“How many people start electric car companies?” he said in an interview. “How many do it in a recession?”
Mr. Cuccinelli has seized on the GreenTech saga in an attempt to attack Mr. McAuliffe’s chief asset as a candidate, his business acumen.
The Cuccinelli campaign has compiled a 58-slide presentation of opposition research on GreenTech and created a mocking Web video. It shows every sign of keeping the issue alive through Election Day in November.
“The central premise of Terry McAuliffe’s candidacy has been undermined,” said Chris LaCivita, Mr. Cuccinelli’s top strategist. “Why would we not talk about it?”
Even before a single paid advertisement by either candidate, the Virginia governor’s race is off to an especially nasty start. The McAuliffe campaign is highlighting Mr. Cuccinelli’s own potential scandal: his decision as attorney general not to initially recuse his office from a lawsuit against the Commonwealth of Virginia brought by a company whose chief executive gave Mr. Cuccinelli gifts, including the use of a lake house and boat.
Mr. Cuccinelli has sought to shift the spotlight from his relationship to that company, Star Scientific, by haranguing Mr. McAuliffe for not releasing his tax returns. On Tuesday Mr. McAuliffe relented and released summaries of the past three years, which showed, indeed, that he is wealthy: he earned $8.1 million in 2011, $1.8 million in 2010 and $6.5 million in 2009.
Harry L. Wilson, a political scientist at Roanoke College, said Virginians had always elected governors they found likable, but 2013 may break the mold. “This may be the first time we don’t like our governor the day after the election,” he said.
The path to GreenTech for Mr. McAuliffe, who has never held elective office, began in defeat in the 2009 primary for governor, when charges that he was a carpetbagger without Virginia ties proved devastating. In the four years since, he traveled the state extensively and raised $20 million to buy a Hong Kong-based electric carmaker, renaming it GreenTech and moving its headquarters to Northern Virginia, where he lives.
On Tuesday, Mr. McAuliffe was continuing his listening tour of the state at a community college in Clifton Forge in the Blue Ridge Mountains. He studiously took notes on a narrow reporter’s pad.
“So, Mr. McAuliffe, you wrestling any alligators?” asked one student, a reference to a colorful episode from his past inspired by the promise of a $15,000 political contribution.
“I’ll do anything once,” Mr. McAuliffe said.
“Now you’re just wrestling the car industry,” volunteered a second student.
One of the first questions Mr. McAuliffe was asked when he announced his candidacy last year was why GreenTech located its factory in Tunica County, Miss. Mr. McAuliffe said Virginia officials “didn’t want to bid on it.”
But e-mails and documents obtained by PolitiFact under the Freedom of Information Act show that Virginia economic development officials were interested, though deeply skeptical about the company’s prospects.
“We have grave doubts about the business model presented to us,” Jeffrey Anderson, the director of the Virginia Economic Development Partnership at the time, wrote in a memo.
Officials also questioned GreenTech’s plan to attract Chinese investors using a visa program that awards green cards to foreigners who put up $500,000 or more for a start-up business. One development official wrote that she could not “get my head around this being anything other than a visa-for-sale scheme.”
Mr. McAuliffe shrugged off Virginia’s objections. “We tried,” he said. “It didn’t work out. I’ve been in many entrepreneurial businesses. States make their decisions. Businesses make their decisions.”
Asked how much of GreenTech’s financing was raised through foreign investors seeking green cards, known as EB-5 visas, he referred the question to GreenTech’s current executives. Marianne McInerney, a vice president, said the EB-5 program was important to “our initial capital strategy” but did not represent the majority of current investments.
Mr. McAuliffe stepped down as chairman sometime before Dec. 1, though he continued to refer to his role at the company in the present tense, telling a meeting of small business owners in January, “I’m building electric cars now.”
His campaign defended that as accurate since Mr. McAuliffe remains a GreenTech investor, with stock worth more than $250,000, according to a campaign disclosure filing.
Mr. McAuliffe said he left GreenTech to run for governor full time and never intended to hide his departure. “If anybody asked me, I said I’m no longer with the company,” he said. “When I made the decision I’m running for governor, I’m all in.”
Yet the decision not to announce the departure — it was first reported this month by Politico — increased the impression that Mr. McAuliffe was seeking to distance himself from the company, which has struggled to live up to a series of promises.
When it announced its Mississippi plant, news reports there said the company projected making 150,000 cars. It now says it has orders for 7,000 cars in 2013, a two-seat vehicle the company calls MyCar.
On Monday the company announced a new venture with a Chinese partner to make an all-electric sedan, initially assembling 2,000 vehicles in Mississippi and opening a second plant with 200 jobs.
Some strategists suggested GreenTech was an opportunity for Mr. McAuliffe, not a black eye, because it focuses attention on his record as an entrepreneur and contrasts with Mr. Cucccinelli, who is known mostly as a social conservative.
“Both sides are in a mad rush to define themselves and their opponents,” said Mo Elleithee, a strategist for Mr. McAuliffe in 2009 but who is not active this cycle. “I think the more the debate is about Terry’s record, the better the opportunity is for him. He just has to seize it.”