Former Virginia governor Robert F. McDonnell and his wife, Maureen, were charged Tuesday with illegally accepting gifts, luxury vacations and large loans from a wealthy Richmond-area businessman who sought special treatment from state government.
Authorities alleged that for nearly two years, the McDonnells hit up executive Jonnie R. Williams Sr. again and again, lodging near constant requests for large loans, clothes, trips, golf accessories and private plane rides. In exchange, authorities allege, the McDonnells worked in concert to lend the prestige of the governorship to Williams’ struggling company, a small former cigarette manufacturer that now sells dietary supplements.
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They said the first couple arranged access for the CEO to top state officials, allowed the historic governor’s mansion to be used for a launch party for his company’s new non-FDA approved pill and attended events designed to boost the company’s prestige with university scientists who might research the company’s product. The two were charged with 14 felony counts, including wire fraud, conspiracy to commit wire fraud, obtaining property under color of their official office and conspiring to the do the same. They were also charged with making false statements to a federal credit union.
McDonnell was also charged with making a false statement to another financial institution, and Maureen McDonnell was charged with obstructing the investigation. Charges mean the couple could face a maximum of decades in prison, though would likely serve far less if convicted.
“We will continue to work tirelessly with our law enforcement partners to investigate and prosecute public corruption,” said U.S. Attorney Dana Boente in a statement.
A lawyer for McDonnell released a statement from the former governor denying his actions were illegal and promising to fight the charges in court. “My fellow Virginians, earlier today federal prosecutors notified my attorneys that they have filed criminal charges against me and my wife Maureen, alleging that we violated federal law by accepting gifts and loans from Jonnie Williams, the former CEO of Star Scientific,” he said.
“I deeply regret accepting legal gifts and loans from Mr. Williams, all of which have been repaid with interest, and I have apologized for my poor judgment for which I take full responsibility. However, I repeat emphatically that I did nothing illegal for Mr. Williams in exchange for what I believed was his personal generosity and friendship.” He promised to “use every available resource and advocate” to “fight these false allegations, and to prevail against this unjust overreach of the federal government.”
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William Burck, an attorney for the former first lady, said she too is innocent. “The Department of Justice has overreached to bring these charges,” he said. “Thankfully, however, the Department is not the sole arbiter in our justice system, which ultimately is not ruled by the unfounded suspicions of prosecutors but rather the law and the facts as decided by the judge and the jury,” he said. Jerry Kilgore, a lawyer for Williams, declined to comment.
McDonnell, 59, is the first governor ever to face criminal charges in Virginia, a state that has prided itself on a history of relatively ethically clean politics. The threat of indictment had loomed over the final months of his four-year term, which ended with the inauguration of Gov. Terry McAuliffe on Jan. 11. Though Boente had informed McDonnell in December that he intended to pursue charges, McDonnell made a final appeal to top Department of Justice officials in Washington and no action was taken until 10 days after he left office.
McDonnell’s indictment comes in the midst of the General Assembly’s annual legislative session and is likely to accelerate efforts to overhaul the state’s ethics and gifts laws, long considered some of the most lax in the nation. McAuliffe and leading state lawmakers in both parties have both already said they support such changes.
The criminal prosecution also marks a stunning crash for a politician who was considered for the Republican vice-presidential nomination in 2012 and just a year ago was considered a credible future candidate for president. McDonnell presided over a state with declining unemployment and brightening state finances. Even his political opponents admired his civil temperament, and he had faced no challenges to his ethics or character before the relationship with Williams emerged.
McDonnell first apologized for his interactions with Williams in July, paying back the CEO’s $50,000 loan to his wife, as well as another $70,000 loan made to a small business McDonnell owns with his sister. He then returned what he called “tangible” gifts his family accepted from Williams. But he has insisted he did not abuse his office. Star Scientific, after all, received no state grants, contracts, economic incentives and its employees got no state appointments.
The governor’s career began to quietly fray more than a year ago in the most mundane of ways: a tip to a state fraud hotline alleging that the chef at the state’s 200-year old executive mansion was pilfering food from the kitchen. When questioned by authorities, the chef quickly offered up information about potentially far more serious wrongdoing in the mansion.
In March 2012, chef Todd Schneider handed over documents that showed Williams paid $15,000 for the catering at the 2011 wedding of McDonnell’s daughter. McDonnell had not disclosed the gift, later saying there was no need because the money was a wedding present to his daughter and state law requires only elected officials, not their family members, to annually disclose gifts. But the chef also provided evidence that it was McDonnell himself who had signed the catering contract, assuming financial responsibility for the event. A $3,500 refund check from the catering company had gone to McDonnell’s wife Maureen, not Williams or to the young couple.
By November 2012, Ken Cuccinelli II, then the state’s attorney general, formally asked a local prosecutor in Richmond to conduct a full review of all of McDonnell’s annual financial disclosures. At the same time, federal authorities were separately investigating securities transactions at Star Scientific.
For nearly six months, the twin investigations proceeded in secret and McDonnell’s reputation as a detail-oriented executive above ethical reproach remained intact. But the governor’s unraveling accelerated with the March 30 publication of the Post story detailing Williams’ wedding gift, along with actions McDonnell and his wife had taken to promote Star Scientific in the same time frame.
Under mounting public scrutiny, the full extent of the McDonnells relationship unspooled over months: designer clothing for the first lady, golf for the governor and his sons and a Rolex watch purchased for the governor at the first lady’s recommendation, engraved with the words “71st Governor of Virginia.”
McDonnell’s legal situation became treacherous as the investigations intersected and Williams, whom McDonnell in the spring of 2013 had described as a close family friend, began cooperating with authorities and offering evidence against the governor. In August, McDonnell likewise turned on his one-time friend, his spokesman describing Williams publicly as a man with a troubled business background whose word could not be trusted. McDonnell never explained why he and his wife had allowed such a man to become so closely entangled with their lives.
They had vacationed in Cape Cod with Williams and his wife. They took their family to his home on the shore of Virginia’s Smith Mountain Lake and borrowed his nearly $200,000 Ferrari for the ride home. The first lady traveled with him on his private jet to Star Scientific events out of the state. At one meeting in Florida, she told investors she was a supporter of Star’s product Anatabloc, a dietary supplement that includes a chemical found in tobacco and other plants.
The McDonnells had also gone to Williams for money. In May 2011, Williams lent Maureen McDonnell a check for $50,000. Less than a year later, in the spring of 2012, McDonnell asked Williams to lend first $50,000 and then another $20,000 to a small limited liability corporation he owned with his sister and used to manage two vacation houses in Virginia Beach they rented out to tourists.
In addition to the Virginia Beach houses, purchased for $2 million in 2005 and 2006, the McDonnells also owned a $1 million home at the Wintergreen resort with his sisters and an $835,000 home outside Richmond. The first lady confided to friends that they were having trouble making mortgage payments on the homes and feared an embarrassing foreclosure that would likely become public.
The governor has described the $120,000 as loans. But there were no loan documents drawn up and none of the money had been repaid before the transactions became public in a Post story in July.
Even as she complained of financial distress to friends, the first lady used $30,000 of the money she received from Williams in 2011 to buy thousands of shares of Star Scientific stock. Her lawyer has said she honestly believed in the company’s promise, part of a long standing interest by the former Redskins cheerleader in wellness and diet. Maureen McDonnell’s lawyer has said she first bought the stock without her husband’s knowledge.
But he learned within a few weeks. The purchase meant the McDonnells had a financial stake in the company, even as they took steps that could help Star, available to them only because of his elected position. She then engaged in a pattern of buying and selling the stock that appeared as though it was intended to skirt state disclosure requirements, which require elected officials and their spouses to report stock holdings that exceed $10,000 in any one company.
She sold the shares for a loss in December 2011, just before the annual disclosure form was due in January, and then bought her shares back the following month, just days after the form was filed. In December 2012, with the disclosure form coming due again, she distributed the shares among her five adult children, meaning the couple once again did not have to reveal the holding when they filed in January.
A spokesman for the governor has said the shares were treated properly and there was no attempt to evade disclosure.
Unlike many other states, Virginia places no limits on the value of personal gifts that can be accepted by those in elected office, provided they annually disclose those worth more than $50. Since he took office in 2010, McDonnell has reported that Williams and Star had given him $9,650 worth of gifts, mostly rides on the executive’s private plane. That was on top of more than $108,000 in political contributions given to McDonnell’s campaign and political action committee, again largely the use of Williams’ plane.
Many of Williams’ gifts were not disclosed, however, including the luxury items, McDonnell has said because they were gifts to his family and Virginia law does not have a reporting requirement for spouses and children.
This article originally appeared in The Washington Post.
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