By Peter Galuszka
What, exactly, is the relationship between Governor Robert F. McDonnell, his family, and Attorney Gen. Kenneth Cuccinelli with the head of a money-losing, tobacco-related dietary supplement maker that is the target of federal prosecutors?
All involve Jonnie R. Williams Sr., chief executive of Star Scientific, a Henrico County-based firm that has sold discount cigarettes, smokeless tobacco products and dietary supplements, including one called Anatabloc, that might someday have medical applications, according to The Washington Post in a front-page story today. A key ingredient for Anatabloc is found in tobacco and other plants, the newspaper says.
Star was sued last week by a former shareholder, Francis J. Reuter, who claims that Star misled investors about research involving the dietary supplements and the fact that the firm has been subpoenaed by the U.S. Attorney’s Office for Eastern Virginia.
The Post details links between Star and Williams and McDonnell and his family. Not only was Star a major campaign contributor to McDonnell, it allowed the governor to ride on its corporate jet and provided $15,000 worth of catered food, including shrimp cocktails, for the Executive Mansion wedding of his daughter Cailin in 2011.
McDonnell’s wife, Maureen, a former Washington Redskins cheerleader and skilled marketer, attended a Florida conference to tout Star’s products three days before her daughter’s wedding, the Post reports.
From 2009 to 2012, Star gave $130,000 to Virginia officials and a political action committee that supports McDonnell, the Post says.
The Star case becomes even more intriguing with Cuccinelli’s involvement. The attorney general and Williams are personal friends. Cuccinelli has stayed at Williams house and used his boat. In 2010, Cuccinelli bought 5,060 shares of Star stock at $1.98 and later increased his holdings by more than 3,500 shares at $2.79 a share. He sold 1,500 shares at $4.70 a share last year, the Post says, making a $7,000 profit.
Cuccinelli, however, failed to disclose his financial interests in Star for more than a year. An aide told the Post that the attorney general did not realize that his financial interest in the firm had passed the $10,000 threshold needed for reporting, but has since updated his disclosure. Records also show that Cuccinelli stayed at Williams’ house, used a lake home and a boat owned by Williams, was given a trip to Kentucky valued at $3,200 and a box of “food supplement” valued at $6,700.
A spokesman for McDonnell says the governor did not disclose Williams’ wedding gift of the catered meal because the gift was not intended for him. McDonnell and Williams declined to be interviewed directly by the Post.
Star Scientific had been seen by some of the state’s business elite as a way the Old Dominion can wean itself from its historic dependence upon tobacco by deriving healthy products form it. Star has attempted to do that over the years and dropped selling tobacco products last year in favor of dietary supplements and skin cream products. Last year, the firm lost $22.9 million and laid off some of its employees. It needs Anatabloc to be successful, the Post reports.
Star Scientific says that the lawsuit against it by Reuter has no merit.
This intriguing story is bound to become more interesting.