Category Archives: Politics

Bob McDonnell’s Big Decision

 smith_mountain_lake2By Peter Galuszka

It was a gubernatorial quandary only Virginia could have .

In the summer of 2011, former Gov. Robert F. McDonnell was ready to take a few days off. He and his family had been going to Smith Mountain Lake, a popular destination near Roanoke with lots of golf courses and seven-figure lakeside homes.

At his corruption trial this week, McDonnell testified that his summer getaway had been bankrolled by Delta Star, a company with a big factory in Lynchburg that makes portable industrial electrical gear. The firm had put him up at one of their lakefront houses for $2,474 in 2010, according the VPAP, which runs a data base about this kind of thing.

Summer 2011 had proved a big problem, however. His wife, Maureen, had become fast friends with Jonnie R. Williams a rich Goochland County businessman. Williams had given Ms. McDonnell a $50,000 check and also paid $15,000 for her daughter’s wedding luncheon that June. She had traveled with Williams helping promote Anatabloc, Williams dietary supplement that has since been pulled off the market by the U.S. Food and Drug Administration.

The problem was — whose million-dollar-plus house would the McDonnells use? Williams very much wanted the McDonnells to stay at his sprawling domicile on the tip of a peninsula. Delta Star wanted the McDonnells to stay at their place.

What to do? They split it. The McDonnells stayed at Williams’ house for a getaway valued at $2,268 value according to VPAP. He also laid on a Ferrari that the governor could enjoy driving on the way home.

Delta Star made sure the family was entertained and fed. They provided the family with their very own boat to cruise the lake and catered meals – a $1,892 value for a long weekend.

Delta Star’s feelings didn’t seem to be hurt since they laid on another entertainment gift worth $10,182 in 2012.

And while we’re talking lakeside homes, guess who else also stayed at Williams’ place? Former Atty. Gen. Kenneth Cuccinelli, that’s who – to the tune of $3,000 in 2011. We haven’t heard much recently from the former firebrand, hard right politician but he is on the witness list.

And so it goes. And, by the way, getting vacation favors is very common. Check out former Gov. Tim Kaine’s expensive sojourn on the turquoise blue waters of the Caribbean Sea.

It’s not the only way Virginia’s extremely lax ethics laws work.

If you use your PAC, you have an automatic teller machine. For instance, Tim Hugo of Fairfax, the third-ranking Republican in Virginia’s House of Delegates, expensed nearly $30,000 for travel and food and $9,400 for his cellphone over an 18-month period. As a spokeswoman for the State Board of Elections told The Washington Post’s Laura Vozzella in 2013, “If they wanted to use the money to send their kids to college, they could probably do that.”

Bringing out the Knives

An Afghan pesh-kabz

An Afghan pesh-kabz

by James A. Bacon

There is a rising tide in the op-ed pages, TV commentary and blog commentary that former Governor Bob McDonnell is a brutish, swinish cad for portraying his wife Maureen as the heavy in the corruption trial. You’ve got to love liberals. They’re so very compassionate…  until they’re talking about their wounded enemies. Then, like the Afghan women in the Rudyard Kipling poem, “The Young British Soldier,” they scour the battlefield to “cut up what remains.”

If Maureen and Bob McDonnell had been Democrats instead of Republicans, we would be treated to a litany of perspectives on the heavy toll of political life upon the marriages of elected officials, the unambiguous signs that Maureen was suffering from depression, and speculation from mental health experts to provide subtlety, nuance and context to the story.

No such compassion is accorded McDonnell, who now is being depicted as a man who “betrayed” his wife and was willing to “flay” her character in order to save himself, just to cite the observations of Petula Dvorak and her headline writer in the Washington Post. (Bacon’s Rebellion‘s very own Peter Galuszka is no kinder.)

Here’s the question I would pose to them. If you were in McDonnell’s shoes, and if the marriage were the shambles he says it was, and if Maureen was indeed the one who solicited the gifts and loans from former Star Scientific CEO Jonnie Williams, Sr., and if you truly believed yourself to be innocent of any illegality, what would you have done? Would you have, in Dvorak’s words, “manned up” and taken the plea agreement offered by prosecutors before the trial? How many people would admit to a crime they believed they did not commit?

Who really bears the moral onus here? McDonnell, for defending himself, or the prosecutors, who (a) proceeded with a case that’s looking flimsier by the day, and (b) called the witnesses whose testimony trashed Maureen’s reputation before McDonnell breathed a word?

McDonnell bears his share of blame for the failing marriage, as he seemed willing to concede on the witness stand yesterday. Maureen was happy living in Virginia Beach before he rose to statewide political prominence. He asked her to sacrifice a lot for his political career, giving up her cozy network of friends and her part-time job selling vitamin supplements. When he first moved to Richmond, the family lived apart while the kids finished high school. As attorney general and especially as governor, he traveled constantly and spent half his nights away from his wife and family. He insisted she use a small inheritance to pay down credit card bills. When Maureen expressed her increasing unhappiness by nagging and throwing tantrums, he withdrew from her, often spending extra time at the office. Emotionally exhausted from the confrontations, he did not question some of Maureen’s activities that he should have questioned — it was easier just to look the other way.

But McDonnells’ critics don’t mention any of these all-to-human failings that probably could describe thousands, even millions, of American men at some point in their marriages. Liberals bring out the long knives. They move in for the kill, portraying their weakened foes as morally reprehensible, as less than human.

In his poem, Kipling advised the wounded English soldier, “Jest roll to your rifle and blow out your brains.” McDonnell did not roll over. Perhaps that was his worst affront of all.

Maureen McDonnell and Sexism

maureen_and_bob(1)By Peter Galuszka

Sitting for hours listening to former Gov. Robert F. McDonnell testify in his federal corruption trial makes one wonder exactly what his values are, especially as they relate to women.

His entire legal strategy is to “Throw Maureen Under the Bus” – namely his lawyers and those of his co-defendant wife Maureen are portraying Ms. McDonnell as a “basket case” who set up a lot of funny meetings with snake oil salesman Jonnie Ray Williams Sr., accepted expensive gifts from him with promptly telling her husband, and communicated with him 1,200 times in about a year and a half (one day it was 52 text messages.)

She is bad and deceptive. He is good and didn’t know much about her messy friendship with Williams. She is guilty. He is innocent (or so it goes).

Gov. Bob, helmet hair perfect as usual, took the jurors through a horrible litany of his long-decaying marriage to college sweetheart Maureen. While she was screaming and intimidating her staff, he was slogging through “the business of governing” for endless hours every day.

When she approached Ann Romney, wife of Republican presidential candidate on the campaign trail in 2012 and offered the woman who suffers from MS some “Anatabloc,” Williams’ miracle pills, Bob overhead it and was “embarrassed.”

There is something deeply disturbing, however, about McDonnell and his attitudes. He seems to have come from a bygone era when men worked long hours, held major responsibilities and answered to the most important thing in their lives – their overweening ambition.

The husband was ordained by God to do great things, be a Boy Scout, and write his name in history books. His wife was to stay barefoot and pregnant in the kitchen knitting socks or selling silly vials of creams.

McDonnell has since disowned this little passage he wrote at Regent University (Pat Robertson’s school) back in 1989 when he was a graduate student, but it seems strangely relevant. He tried to create some kind of conservative, faith-based government paradigm that would cut taxes, open charter schools and the like. He wrote:

“Further expenditures would be used to subsidize a dynamic new trend of working women and feminists that is ultimately detrimental to the family by entrenching status-quo of nonparental primary nurture of children.” The kicker is his view that feminism is one of the “real enemies of the traditional family.”

Well, a hell of lot of good that thinking has done since he has steadily, deliberately humiliated his wife in a bid to avoid jail time. A parade of defense witnesses, mostly McDonnell cronies, have humiliated Ms. McDonnell as a grabby, irrational, fashion-mad bimbo who just didn’t get it when Bob patiently told her that the stock she held in Star Scientific, Williams’ firm, had lost half their value and were a bad investment.

There are other giveaways that paint McDonnell as a self-important, entitled, superior little prig. Maureen had an apparently successful home-based business selling nutraceuticals like face creams. The Bob that may have sounded so pointlessly “womanish” but it is a big business. When he ran for statewide offices, he told Maureen to nix the biz.

Now wait a minute. Why should he tell his wife that she can’t run her own business she built up because his mission as a conservative political savior is just too important? Why does he get to decide?

One reason has roots in a kind of mid- 20th century philosophy that one used to see in black and white movies and television shows. There has been a deluge of testimony about the Virginia suburbs of DC roots of the McDonnells. Lots of military, conservative, family values, do-goodism, ticket punching (making colonel or the appropriate GS level position) having some silly affection for the Redskins or golf club bags with your school logo and so on. But the most obnoxious attitude is that the self-pride that one is doing something very important for his country and fellow citizens.

If you are male, you get to wear this cloak. If you are a woman, your first and foremost goal is to mind the kids and support your man and be a handmaiden to HIS career and ambitions. Watch the 1950s “Strategic Air Command” film” with Jimmy Stewart as a ballplayer pilot and his dutiful wife June Allyson. He makes the big decisions and flies the big bombers. She’s always waiting at the air base fence for him to come home so she can cook him fried eggs.

But McDonnell has a bigger problem than just this over-the-top sense of duty. By his own testimony, McDonnell is seriously addicted to political ambition. It is his oxycodone. His heroin. He gets a real kick by planning the next stage (vice president? president?) Maureen is left by herself and her screaming fits. Bob just tunes her out and spends as much time traveling and in his office as he can.

As he testified, McDonnell got a buzz from being a state legate and an even bigger buzz by running for attorney general and governor. One woman who seemed to be cheering him every step of the way was Janet Kelly, who ended up being Secretary of the Commonwealth when he became governor. She testified that when he wanted her for that spot, she told him flat out she could not work with Maureen. She didn’t.

Family values, anyone?

McDonnell on the Stand

mcdonnellFormer Governor Bob McDonnell took the stand yesterday, defending his conduct in connection with Jonnie Williams Sr. and Star Scientific in precisely the way one would expect: Other than providing access to government, something that every governor does, he said, he did Williams no favors. As the Times-Dispatch summarized his testimony, “He never used discretionary funds at his disposal to give Star Scientific a grant, never paid a site visit to the company, and never held a news conference or issued a news release for the company.”

The fact that people are disgusted with the influence of money in politics is not an argument for convicting McDonnell. If McDonnell can be sent to jail for arranging meetings between Williams and state officials, then every living governor in Virginia had better start taking measurements for their orange prison jump suits. As for failing to disclose the real estate loans from Williams in loan applications to a bank and a credit union, the defense has made the case that he wasn’t required to — and the prosecution hasn’t presented a shred of evidence to suggest otherwise.

The only thing that can change the course of this trial is an aggressive cross-examination by the prosecution. If McDonnell comes across as contradictory or evasive, he could raise doubts that don’t exist now. But at this point, it does not appear that federal prosecutors have a case.

– JAB

Mo Maureen and Po’ Maureen

Mo McDonnell

Mo McDonnell

by James A. Bacon

More interesting testimony from the McDonnell trial yesterday. In the balance, the defense bolstered its case. But it was not entirely convincing.

The other Maureen. Mo McDonnell, Bob McDonnell’s little sister, was a successful business executive who had worked for IBM, Regent University and Amerigroup, culminating with a salary of $540,000 in 2012 and accumulating savings of more than $1 million. Mo testified that she had more than enough money to cover the cost of maintaining the troubled MoBo Real Estate Partnership, undercutting the prosecution’s argument that Bob borrowed money from Star Scientific CEO Jonnie Williams out of desperation to keep the real estate partnership afloat. Indeed, when her bother decided to repay the loans to Williams, she was the one who fronted him the money to do so.

Although she could have covered any shortfall herself with a $150,000 payment she received when she left Amerigroup, she explained, she and Bob decided that interest rates were so low that it made more sense to borrow the money so she could invest her own funds at a higher rate of return.

Really? I’m not sure that passes the smell test. She is asking jurors to believe that it made more sense to borrow money from Jonnie Williams, even though Bob knew how it would look if the loan were made public and even though he had discussed with Williams (if we are to believe Williams) ways to avoid disclosure. Any reasonable person would conclude the exact opposite, that it made far more sense for Bob to borrow the money from his sister in a transaction that would have created no questions — as he ultimately did when he repaid Williams. If I were the prosecution, I would hammer that hard. It is not a convincing explanation. My hunch: There is more to the story, and we haven’t heard it yet.

Poor Maureen. Mo McDonnell and Kathleen Scott, a special assistant to the governor’s wife, provide new details on the first lady’s state of mind. The story of Po’ Maureen’s out-of-control behavior has been so consistent throughout the trail that there is little point in enumerating all the anecdotes here. But one round of testimony advances us to a new level of understanding.

Although McDonnell defended his wife to others, he acknowledged that she had a problem.  As Mo testified (as reported by the Virginian-Pilot):

The first lady once reduced her to tears with a biting comment during a weekend family gathering in 2012, McDonnell’s sister testified. She told her husband she wanted to leave.

“Bob came up and apologized and begged me to stay,” she said. “He said he was working on it. He was trying to get her help.”

As I have observed in previous posts, it is obvious that Po’ Maureen was suffering from depression, mood swings, hysterical outbursts and other signs of mental illness. This testimony confirms that while Bob coped by withdrawing and tuning her out, he also recognized she had a problem. I would not be surprised if testimony reveals that she sought psychiatric treatment and at some point took medication.  The McDonnells may not choose to release this information because they consider it private and shameful. They should not. Millions of Americans suffer from depression and related disorders. Suffering from depression is not a moral failing. (The behavior resulting from depression can be but the depression itself is not.)

Acknowledging Maureen’s mental illness would not excuse illegal or unethical conduct, especially on Bob’s part, but it would would put the McDonnells in a different light than the prosecution’s explanation, that Bob joined in a calculatingly immoral conspiracy with his wife to commit fraud. Also, the Maureen-the-depressed-wife seems less harsh and demeaning than the Maureen-the-bitch defense.

Throwing Maureen under the Bus

maureen_mcdonnellby James A. Bacon

The full dimensions of the McDonnell family tragedy came into clearer focus yesterday as attorneys representing Maureen and Bob McDonnell launched the defense phase of the corruption trial… by throwing Maureen under the bus. Defense witness Janet Kelly, Secretary of the Commonwealth in the McDonnell administration, described as “diva-ish” and so difficult with work under that her staff threatened to quit en mass.

Maureen’s behavior was so out of control that those in the governor’s inner circle wonder if she suffered from a mental illness. The picture painted by Kelly was of a woman who was isolated, miserable and unable to grow into the job. Kelly’s relationship with Maureen had deteriorated to the point she could not work with her even before Bob took office, but she did evince some sympathy for the first lady. Breaking down in tears at one point, she said she did not want to “pile on.” As the Washington Post summarized her testimony:

Maureen McDonnell repeatedly told her that being first lady was not something she had wanted. She was uncomfortable with public speaking and, in her first year in the mansion, lost both her parents and sent her youngest children to college — all while essentially losing her husband to his job.

“She would say, ‘I didn’t sign up for this. This isn’t what I wanted,’ ” Kelly testified. “It was a lot for her.”

Perhaps most germane to our understanding of the relationship between the former governor and his wife — defense attorneys said the marriage was in such bad shape that the two could not have conspired to swap gifts for favors with Star Scientific CEO Jonnie Wiliams Sr. — Kelly testified that the displays of affection in public between Bob and Maureen hid a deeper alienation. In private settings, she would rage at him.

Bacon’s bottom line: More pieces are falling into place. Bob McDonnell was an ambitious man. What he wanted out of life — political fame and success — wasn’t what Maureen wanted. Family finances were a mess before the family entered the governor’s mansion, made worse by extensive borrowing during the gubernatorial campaign. Maureen was ill equipped to fill the role of first lady; she didn’t ask for the job but she was stuck with it. Unable to handle the stress of the position on top of the deteriorating family finances, she flew into rages, alienated many of the people around her, including her husband, which made her situation even worse. She gravitated to Williams, who plied her with attention, gifts and what seemed to be friendship. (Kelly’s testimony supports my observation in a previous post that her behavior seemed indicative of clinical depression, a phenomenon that takes on a life of its own.) It’s a sad story, even a tragic one.

None of this excuses breaking the law (if laws are shown to be broken). None of it exonerates the McDonnells for showing terrible judgment by accepting gifts from Williams. Wrong is wrong, whatever the psychological explanation. But it does provide a context for understanding and interpreting what happened. And the picture we’re getting is of a vulnerable woman preyed upon by Williams to extract political favors from the administration.

The Prosecution Closes on a Weak Note

Bob McDonnell: Now it's time to hear his side of the story.

McDonnell: Ready to give his side of the story.

by James A. Bacon

The U.S. Justice Department closed its case in the McDonnell trial on a weak note Thursday as cross examination of FBI Agent David Hulser confounded the narrative prosecutors were trying to establish of a financially desperate first family.

Previous testimony had revealed the seemingly damning fact that Maureen and Bob McDonnell had accumulated $90,000 in credit card debt before entering the governor’s mansion. I blogged my personal shock and dismay at the revelation that the McDonnells had run up such a massive credit card debt. I had viewed that fact in the context of Maureen McDonnell’s oft-cited complaint that her credit cards were maxed out and her grabbiness in soliciting gifts and loans from Star Scientific CEO Jonnie Williams. I drew precisely the conclusion that the prosecution hoped I would: that the McDonnells had run up the tab imprudently, perhaps recklessly.

But it turns out there was more to the story. One reason for the big credit card bill was Bob’s run for governor. He had resigned from his position as Attorney General in February 2009 so someone else could take the helm. He was not exactly left penniless – he made $129,000 during the campaign by going on the payroll of his former law firm, Huff, Poole & Mahoney. Still, as McDonnell told reporters after the trial proceedings, running for governor is expensive.

Yesterday, new dots were added to the page, allowing the jurors (and bloggers) to connect them differently. Under questioning by Henry Asbill, one of Bob McDonnell’s attorneys, Agent Hulser conceded that McDonnell’s credit scores were excellent and that the prosecution had presented no evidence to suggest that he had failed to pay his credit card bills on time. Hulser also conceded that the McDonnells’ credit cards had untapped credit on them, although he could not confirm Asbill’s assertion that the amount approached $175,000 to $200,000. All that came atop previous testimony that the first family had paid down its credit card debt to $31,000 in April 2011 after Maureen received an inheritance and Hulse’s concession that the McDonnells had repaid three loans to Williams totaling $120,000, as had been the intention all along.

Furthermore, here are questions that any reasonably intelligent juror would ask that the prosecutors did not answer:

  • What were the monthly minimum payments on the credit cards?
  • What was the gap between PITI (principal, interest, tax and insurance) on the McDonnells’ former residence in Henrico County and rental income ?
  • What was the gap on their Wintergreen property?
  • What was the gap on the two Virginia Beach houses held in partnership with Bob’s sister?
  • What was the gap on the McDonnells’ Alexandria rental property?
  • What was the income or loss on all those properties? How much of a financial hardship did that pose to a governor earning $175,000 a year and living rent-free in the governor’s mansion?
  • Did the McDonnells subsequently succeed in restructuring their debt? Did a bank and/or credit union deem them credit-worthy?

There’s a lot we don’t know about the McDonnell family finances. This lacunae in the data hardly lets the McDonnells off the hook for soliciting gifts and loans from Williams, a man who was seeking favors from the governor. No matter how you cut it, Bob and Maureen showed colossally bad judgment. The “optics” were terrible. But bad optics are not, in themselves, illegal. And the burdenof proof rests with the prosecution.

While the prosecution did successfully portray the McDonnells as under financial pressure, it hardly made the case that they were desperate. During the time in question, McDonnell was trying to restructure his family finances through loans from the Pentagon Federal Credit Union and Towne Financial Services Group. If he could roll over his debt until his term expired, he could repay it once he started making $500,000 a year or more as a rainmaker for a big Virginia law firm or occupied a well-paid sinecure as a university president somewhere.

That still leaves the seemingly incriminating omission of the Jonnie Williams loans in Bob McDonnell’s loan applications to the Pentagon Federal and Towne Financial, which in previous posts I had regarded as potentially the most damaging charges against the former governor. Why would McDonnell seek to cover up those loans — a potential felony — if not for nefarious purposes?

That question assumes that McDonnell was covering up anything. Defense attorneys revealed their line of logic during cross-examination Wednesday. True, McDonnell submitted a loan application that omitted reference to the Jonnie Williams loans. And, true, after police began asking questions, McDonnell submitted a revised loan document that included the Williams loan information. John Brownlee, McDonnell’s attorney, argued that the governor’s revisions to the loan document were part of an ongoing process before the application was finalized — a process that was extended due to McDonnell’s preoccupation with the legislative session. It turns out he had omitted other data as well, not just the Williams loan. The revised document included a car not mentioned previously. Finally, the Pentagon Federal loan manager testified that she was not surprised to see the revisions. Apparently, such revisions are common.

As for the loan application submitted to Towne Financial, President William Sessoms (who also is Virginia Beach’s mayor) testified that a personal financial statement such as the one McDonnell filled out need not have included mention of debt owed by his wife ($50,000) or by a limited liability company such as MoBo Real Estate Partners.

Bacon’s bottom line: The prosecution case is looking surprisingly weak — and that’s before McDonnell testifies on his own behalf. The prosecution has managed to air a lot of the McDonnell family’s dirty laundry. And it has exposed activities that, if not illegal, perhaps should be illegal. However, if I were a juror rendering a verdict based on what I know at this moment in time, I would vote to acquit. But I have flip-flopped a couple of times already on this trial, and I may well do so again.

Another Day Older and Deeper in Debt

Bob McDonnell. Photo credit: Washington Times

Bob McDonnell. Photo credit: Washington Times

OMG! Maureen and Bob McDonnell owed $75,000 on seven credit cards when Bob took office as governor in 2010. Their credit card debt peaked at $90,000 later that year. The first family managed to pay down its debt to around $31,000 the next year, apparently after Maureen inherited some money, according to the Times-Dispatch.

Think about it: They owned a McMansion in Richmond’s West End, a resort property in Wintergreen, and (co-owned) two beach properties in Virginia Beach. And had $90,000 in credit card debt. And racked up another $220,000 in debt from private individuals, including Jonnie Williams, Sr., president of Star Scientific, to keep their Virginia Beach properties afloat.

I’m wondering if this sheds light on McDonnell’s approach to government. The hallmark of his transportation policy was a willingness to borrow billions of dollars, and then to leverage that state debt through added toll-backed public-private partnership debt. Was there a connection between his views on personal debt and his views on state debt? Perhaps.

The common denominator, one could argue, was a proclivity to engage in best-case-scenario thinking and an inability or unwillingness to consider that things might go wrong. A more prudent man would not have allowed the state to get in the jam it did by rushing the U.S. 460 upgrade — a fiasco that could expose taxpayers to $300 million or more in losses.

As always, I’ll reserve final judgment until after I hear McDonnell’s defense. But I’m not feeling very charitably inclined toward the man at the moment.

– JAB

Sands Shift under McDonnell Defense

eroding_beachfront

Eroding defense…

by James A. Bacon

The McDonnell trial resumed yesterday as the prosecution brought in more witnesses to dot i’s and cross t’s on its case that Maureen and Bob McDonnell conspired to grant official favors to Star Scientific President Jonnie Williams Sr. in exchange for more than $150,000 in loans and gifts. There were no big surprises in the day’s testimony, but details emerged that put the spotlight, long focused on Maureen’s outrageous behavior, back on Bob.

We now have a clearer idea of what a drain the real estate investments caused for the first family, which relied primarily upon Bob’s $175,000-a-year governor’s salary to pay its bills. We also have a better idea why Bob was so eager to obtain those $70,000 in real estate loans from Williams.

Last week, I laid out some numbers suggesting that the cost of maintaining McDonnells’ house in the West End of Richmond was costing the family roughly $1,000 more than it could generate in rent.

Yesterday’s testimony alluded to the fact that the McDonnells also owned a propertycalled Blue Ridge Heaven in the Wintergreen mountain resort  – providing more evidence of the family’s financial over-reach. While Wintergreen does rent out privately owned properties, generating some income for absentee owners, it is entirely possible that Blue Ridge Heaven also represented another drain on family finances.

The most interesting testimony came from Michael Uncapher, recently divorced from McDonnells’ sister Maureen. He testified that Bob and sister Maureen had purchased two houses across the street from one another in Virginia Beach as a gathering place for the McDonnell clan. Although they planned to rent the houses, the 2005 purchase was never seen as a money-making investment; the property was primarily for the family’s enjoyment.

Bob’s sister, it transpires, is a successful business executive. According to Uncapher, she earned more than $500,000 in 2012 — a fact the defense elicited to counter the prosecution’s claim that Bob and (wife) Maureen were financially desperate. Her ability to meet her share of the obligations was never in question. Only a few days after Bob accepted loans from Williams, she earned a $70,000 bonus.

The defense seems weak. MoBo Real Estate Partners was experiencing difficulties. Between 2008 and 2012, the business was losing between $50,000 to $60,000 a year. Under cross-examination, Uncapher, who had managed the two properties, conceded that his financial mismanagement contributed to the partnership’s money problems. The partnership borrowed $100,000 from McDonnell’s father John in 2007 and another $50,000 from Dr. Paul Davis, a radiologist in 2009 before borrowing $70,000 more from Williams in 2012. If piling up $220,000 in extra debt over seven years is not a sign of financial desperation, what is?

While many of the first couple’s financial problems can be laid at the doorstep of the free-spending first lady, MoBo was a partnership between Bob McDonnell and his sister, the stated purpose of which was to create a place where the families of brother and sister could enjoy vacation time together. There is nothing in the testimony that wife Maureen had anything to do with that investment. While the circumstances are still unclear, my working hypothesis is that the Virginia Beach real estate investment was Bob’s doing.

I’m surprised the prosecution hasn’t done a better job of piecing together the McDonnell family finances. Maybe we’ll see more testimony as the trial continues. As a juror, I would want to know exactly how much money the McDonnells owned on their Wintergreen, Henrico and Virginia Beach properties, how large their Principal/Interesting/Taxes/Insurance payments were, how much they were spending on maintenance, how much they were generating in rentals, and how big the negative cash flow was. The drain could have been immense, and it could explain a lot of the McDonnells’ behavior.

Update: Subsequent testimony revealed that late fees were imposed 18 times for late payment on the smaller of the two beach house mortgages and 29 times for the larger loan.

State Workers: GiftGate’s Unsung Heroes

mcD.pixBy Peter Galuszka

The McDonnell corruption trial, now going into its third week, is an enormously sad and tawdry affair bringing shame on the defendants and the prosecution’s key witness, businessman Jonnie R. Williams Sr.

Yet there are heroes — state employees. A number of them have testified over the past week that they sensed that something stunk with the way Williams, who has no formal science training, relentlessly pushed his questionable product and maneuvered to get the state’s prestigious universities to put their imprimatur on it so it could move from being a low margin neutraceutical to a real and profitable pharmaceutical.

“Perhaps the only gratifying aspect of the trial last week was the extraordinary professionalism of the Virginia bureaucracy,” Richmond political analyst Bob Holsworth told the Richmond Times-Dispatch.

He’s spot on. One reads so many attacks on government workers among more conservative writers who see public workers as slow-minded except when it comes to tying business up with regulations — the theory goes. Private workers build wealth and create products. Public workers live off the taxpayer’s dime and should be fired in droves, one theory goes.

Not true in the McDonnells’ case. Tae Health and Human Resources Secretary William Hazel. Former Gov. Bob McDonnell pushed him, including with late night-emails, to set up meetings to promote Williams and his Anatabloc product.

Hazel responded with not only brave professionalism but common sense. “I wouldn’t put the stuff in my mouth,” he testified. When Williams gave him samples, he didn’t put it down in his disclosure forms because “I didn’t think it had any value.”

Hazel is a serious doctor of medicine, honed by science and reason. Someone like that just isn’t going to be swayed by a business hustler with a private jet, Ferrari, various vacation homes and a gigantic credit limits on his cards.

Other heroes and heroines appear to be some of McDonnell’s staff such as Sarah Scarbrough, former director of the Executive Mansion, who worried about Maureen McDonnell’s “mental capacity” and campaign manager Phil Cox who was upset when Ms. McDonnell pushed Williams’ little pills on Ann Romney, the wife of the GOP’s 2012 presidential candidate.

Somewhat less impressive are other witnesses from Star Scientific, Williams’ former company. Former Chairman Paul Perito claimed that he had no idea just what Williams had given the McDonnells and how deeply he had gotten into  the muck with them.

Last summer, I was spending a lot of time reporting on Star and admit that I could never figure it out. Williams’ seemed like money-losing huckster — someone so over-the-top that he could be easily seen through. Yet the other officers and directors at Star, like Harvard-trained Perito, seemed solid.

Perito nixed McDonnell’s campaign to become a paid board member of Star (she’s hardly qualified) and he seemed stunned when Williams’ told him in 2013 that he’d been interviewed by the FBI and state police. It raises questions about Perito that he didn’t know of all of this much sooner.

Still, many Virginia workers caught up in this farcical mess deserve credit for sticking to their guns and professionalism. Hats off to them.