Category Archives: Politics

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.


Sands Shift under McDonnell Defense


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.

Bob Takes a Hit

A rare smile from Maureen McDonnell at the federal courthouse in Richmond. Photo credit: Times-Dispatch

A rare smile from Maureen McDonnell at the federal courthouse in Richmond. Photo credit: Times-Dispatch

by James A. Bacon

Bob McDonnell took a big hit yesterday in the corruption trial against him and his wife Maureen. He has a lot more explaining to do about his knowledge of his wife’s ownership of Star Scientific stock.

Before yesterday, the testimony of prosecutor witnesses had focused overwhelmingly on the out-of-control behavior of Maureen McDonnell in soliciting gifts from Star Scientific CEO Jonnie Williams Sr. and using her influence as first lady to promote the interests of his company. The governor himself had remained in the background, seemingly a passive or reluctant participant in his wife’s dealings.

But testimony of John Piscitelli, a Virginia Beach stock broker and godfather to the McDonnells’ youngest daughter Rachel, portrayed Bob as a willing and active collaborator in the handling of the Star Scientific stock, even as Maureen went to great lengths to conceal public disclosure of her ownership of the stock. As summarized by the Times-Dispatch:

In June 2011 Jonnie Williams wrote Maureen a $50,000 check in advance of her trip to Florida to promote Star’s Anatabloc supplement at an investors meeting. She used $30,000 of the loan to purchase shares of Star Scientific stock. State disclosure law required the governor to list securities held at the end of the year if the value exceeded $10,000. Maureen asked Piscitelli how she might maintain ownership of the stock without keeping it in her name. That proved impractical, so she sold the shares in December 2011 and bought back the stock in January 2012, thus dodging the reporting requirement.

There had been no evidence presented that Bob knew about any of this activity, and given Maureen’s proclivity for doing things behind his back, it seemed plausible to suggest that he remained ignorant of it. However, Piscitelli testified of a February conference call with both Bob and Maureen in which they discussed opening a second brokerage account, also in Maureen’s name, into which they would deposit Star Scientific stock. The plan was to borrow against the value of the securities.

Here’s the killer (quoting from the T-D account): “Piscitelli acknowledged that during the conversation,  the governor thanked him for helping his wife in other transactions.”

This opens up the possibility that the governor was more deeply involved in Maureen’s stock-trading activities than has been revealed so far. If he doesn’t have a plausible explanation for this testimony from a close family friend, jurors will be asking themselves what else he knew.

The Beat Goes On…

Bill Hazel, secretary of health an human resources. Photo credit: Virginian-Pilot.

Bill Hazel, secretary of health an human resources. Photo credit: Virginian-Pilot.

Testimony continued yesterday in the Maureen and Bob McDonnell corruption trial as the prosecution brought more witnesses to the stand. There were no major revelations but trial junkies were treated to a number of small but telling details.

Snake oil. We’ve known from the beginning that Bill Hazel, former governor McDonnell’s secretary of health and human resources, was skeptical of Star Scientific CEO Jonnie Williams, Sr.’s claims regarding the company’s Anatabloc supplements. We just didn’t know how skeptical. It turns out that Hazel regarded Williams as one step removed from a snake oil salesman. He found Williams’ claims “unbelievable,” adding, “I won’t even put the stuff in my mouth.” What’s not clear is how forcefully he conveyed that skepticism to the McDonnells.

A couple in love. The McDonnells struck Sarah Scarbrough, then-director of the Executive Mansion, as a “happy, in-love couple.” The governor made time for his family and “worshiped the ground” that Maureen walked on, frequently kissing her on the cheek. Scarbrough’s testimony buttressed that of Mary-Shea Sutherland, the first lady’s chief of staff, that the McDonnells had regular family dinners together and made romantic gestures to one another. Sutherland had described previously how Maureen had sought to purchase a yellow dress because the governor had “fallen in love with her in yellow,” and how Bob had composed her a “lovely” poem. Then, of course, there was the infamous $6,000 Rolex watch that Maureen gave Bob for Christmas.

These recollections seemingly conflict with the defense’s claim that the couple’s relationship was so rocky that they barely spoke to one another, making it implausible that they would conspire on how to trade favors for gifts with Williams. However, Scarbrough did say she did not believe that the couple communicated well with each other.

Scarbrough also confirmed Sutherland’s testimony that Maureen was often sad and upset and that her management style was “her way or no way.” The first lady also could be sneaky. On more than one occasion she would invoke her husband’s name to get things done, such as the time she ordered Anatabloc placed in gift bags handed out at a function when, in fact, the governor had asked for no such thing.

Maureen’s friend. One of the few concrete actions Bob McDonnell took on behalf of Jonnie Williams was setting up an interview with health secretary Hazel. As Hazel recounted the event, the governor told him that Williams was a “very good friend” of his wife’s and “he wanted me to meet with him.” That quote supports my narrative that Maureen was the driving force behind granting favors to, and soliciting gifts from, Williams (again, with the possible exception of the real estate loans), and that (most of the time) McDonnell went along to avoid conflict with his wife. By asking Hazel to meet with a good friend of his wife, as opposed to a good friend of his, he was distancing himself from the request.

More meddling. Hazel’s testimony highlighted another favor Maureen did for Williams: meddling in a “Healthcare Leaders” luncheon at the governor’s mansion organized in February 2012. Maureen insisted upon adding multiple guests affiliated with Star Scientific to the guest list. Hazel refused to use his department’s budget to pay for the added guests. ““I was not excited to see these outsiders, who were not considered leaders, involved,” Hazel said.

I’m still sticking with my narrative that the McDonnell marriage was a mess. Even bad marriages have ups as well as downs, depending upon the mood swings of the more erratic partner. I find it entirely plausible that Bob would try to sooth an unhappy spouse, who felt lonely and neglected, through occasional displays of affection. I also find it plausible that the first couple would try to put on a brave front for the benefit of outsiders. Still, there’s no denying that the testimony is ambiguous. Any objective person would have to remain open-minded on the issue.

A reminder to my blog critics: An interpretation of the testimony that says Maureen was the motive force behind the exchange of gifts and favors with Williams while Bob went along reluctantly to avoid conflict (with my usual caveat regarding McDonnell’s submission of incomplete information on loan documents)  does not justify any illegal or unethical actions either one of them might have taken. People do things they shouldn’t do for all sorts of reasons — greed, lust, revenge, whatever. A reluctant lawbreaker is a lawbreaker nonetheless. By exploring the personal dynamics in the McDonnell family, I am not “defending” anyone. I am not trying to exonerate anyone. I’m simply trying to understand what went so wrong and reach a conclusion, as the jury will have to do, of whether the McDonnells are guilty or innocent of the charges with which they are being tried.

Out of Control

Mary-Shea Sutherland. Photo credit: Times-Dispatch

Mary-Shea Sutherland. Photo credit: Times-Dispatch

by James A. Bacon

With each new day of testimony, the trial of Maureen and Bob McDonnell is becoming more a trial of Maureen and less a trial of Bob. There was abundant evidence in previous testimony that the former first lady was out of control, sending members of the former governor’s staff scrambling to rein in inappropriate behavior. But yesterday’s testimony revealed that life was even worse inside the governor’s mansion, where there was no buffer between Maureen and those who worked under her. It is increasingly clear that the first lady was the motive source of the outrageous behavior that prompted the charges against her husband and her.

As Mary-Shea Sutherland, former chief of staff to the first lady, described her in testimony yesterday, Maureen was the boss from hell. Sutherland depicted Maureen as “a screamer” and a “nutbag” who frequently tongue-lashed the staff. The incidents were so frequent and so bad that Sutherland conferred with Bob’s chief of staff, Martin Kent, about incidents involving Maureen, including “a lot of yelling and screaming” about reimbursements the first family would have to make to the state.

“It was almost two years of emotional stress,” Sutherland testified. “I couldn’t protect the staff. It was a state of constant stress; going to work in the morning with your stomach in a knot.”

Finally, Sutherland couldn’t take it anymore and started looking for another job. She approached Jonnie Williams Sr., president of Star Scientific, who has testified that he lavished gifts upon the McDonnells in the hope of gaining their assistance in promoting his Anatabloc vitamin supplement. Williams promised her a job, backed down and then told Maureen about it. That disclosure, reports the Times-Dispatch, sent the first lady on a tear through Sutherland’s office. Maureen demanded Sutherland’s computer password and rifled through her desk.

Sutherland’s testimony is of more than voyeuristic interest. It further illuminates the dysfunction within the governor’s household during a period in which Maureen and Bob McDonnell accepted gifts and loans from Williams exceeding $150,000 in value and acted in various capacities to promote his product and solicit state research funds for his company. So far, the evidence suggests that Maureen initiated all, or nearly all, of the incidents under investigation.

That is not to condone Bob’s behavior in going along — it is simply to explain it. I have conjectured that Bob engaged in conflict-avoidance behavior, torn between doing what he knew to be ethical and a desire to escape his wife’s harangues. I believe that Bob labored long, workaholic hours on state business, in part to avoid a conflict-ridden home life, and left his wife to rule the roost. Previous testimony, by son Bobby McDonnell, describes how McDonnell had objected to Bobby accepting a gift of new golf clubs from Williams but how Bobby and Maureen overrode him.

By facilitating meetings between Williams and state officials, a routine favor dispensed by governors, and by appearing at promotional events, Bob sought to do enough to assuage Maureen but not too much, he hoped, to cross into illegality. He may have crossed the line, however, when accepting loans from Williams to bail out his bad real estate investments and, allegedly, conspiring to hide the transaction. (We’ll have to hear his testimony before drawing firm conclusions.)

Sutherland’s testimony provides other clues about the McDonnell-family dysfunction. Maureen’s out-of-control behavior may well have been the cause of the family’s terrible finances in the first place. As she told Sutherland while shopping for her inaugural wear in New York, her credit cards were “maxed out.” In other words, Maureen had been trying to live a champagne lifestyle on a beer budget long before she reached the governor’s mansion and met Jonnie Williams.

Maureen told Sutherland that her family was “buried in debt” due to expenses and sagging real estate investments. Notably, though, she did not want to sell the family’s $835,000 home in Wyndham, in the affluent West End of Henrico County. That remark was highly revealing.

Let’s do a little math. Let’s assume the McDonnells paid a 20% down payment when they purchased the house in late 2005/early 2006 when Bob took the job of attorney general. That would have left them with a mortgage of about $670,000. Let’s assume they paid a 7% interest rate, which was prevalent at that time. That would imply annual payments of principal, interest, taxes and insurance of more than $50,000 a year, or a third of the AG’s salary and more than is financially prudent. It’s possible that they refinanced at lower rates in later years, bringing down the payments somewhat but the overall burden would not have changed significantly. If they paid a smaller down payment, the burden would have been commensurately higher. Continue reading

The Damage-Control Patrol

Jason Eige (left) with Bob McDonnell on Legislative Day, 2013. Photo credit: Times-Dispatch.

Jason Eige (left) with Bob McDonnell on Legislative Day, 2013. Photo credit: Times-Dispatch.

by James A. Bacon

In New Jersey’s Bridge-gate scandal, Governor Chris Christie was cursed (if you believe his story) by underlings who made bad decisions that landed him in political hot water. In Virginia’s Gift-gate scandal, former Governor Bob McDonnell was blessed by underlings whose advice and actions kept him out of trouble — at least in those matters in which they were consulted.

But Jasen Eige, Phil Cox and Molly Huffstetler — all three of whom testified at the McDonnell trial yesterday — were powerless to protect the governor and his wife Maureen from bad judgment in matters they kept entirely to themselves.

As Jim Noland and Frank Green sum up the day’s testimony for the Times-Dispatch, “It is clear that a number of the governor’s aides and political advisers either were wary of [Star Scientific CEO and favor-seeker Jonnie] Williams, did not take him seriously or warned the first couple about the appearance caused his by his ostentatious gifts.” But they were unaware of the extent to which Williams was bankrolling the family because the McDonnells never told them.

McDonnell’s aides frequently engaged in damage control.

  • The dress. When Williams offered to buy Maureen McDonnell an Oscar de la Renta dress for the inaugural ball, Jason Eige, senior policy adviser to McDonnell, nixed the offer. With the company coming out of a recession, it would not look good for her to wear such expensive apparel. Phil Cox, the governor’s former campaign manager, also acted to dissuade the First Family from accepting the gift.
  • The clinical trials. When the governor e-mailed him about meeting to discuss Virginia Commonwealth University and University of Virginia research support for Williams’ Anatabloc dietary supplement, Eige warned, “We need to be careful with this issue.” It is not clear from newspaper accounts whether that meeting ever transpired, but it appears that the governor did not pursue the matter.
  • The clinical trials (redux). Huffstetler, a top aide to Health and Human Resources Secretary Bill Hazel, met at the governor’s request with Williams and the First Lady in her office for an hour. She listened to Williams’ pitch for state support then responded with “a blowoff email.” In private, she referred to Williams as “the Tic Tac man.” The governor did not pursue the matter.
  • The board appointment. When Maureen inquired about an appointment to the Star Scientific board, Eige expressed his concern that such an appointment would have “bad public optics.” That ended that.
  • Tobacco money. When Maureen complained that VCU and UVa were not applying for grant money from the Tobacco Indemnification and Community Revitalization Commission to research Anatabloc, and asked to set up a meeting, Eige stalled. Even though the first lady had stated the governor shared her concern, Eige never heard from him. The stall worked and the meeting was never scheduled.
  • The launch luncheon. Maureen arranged the use of the governor’s mansion to host the product launch of Anatabloc. Eige and other top aides warned that was not an appropriate use of state property. Eige managed to downgrade the event from a product launch to a luncheon in which Williams would distribute research grants to medical school researchers. He and Communications Director Tucker Martin also edited a Star Scientific press release to remove mention of the Governor and First Lady to avoid the appearance that they were endorsing a particular product.
  • Pitching Ann Romney. On a campaign bus with Republican candidate Mitt Romney and his wife, Maureen pitched Ann Romney on the benefits of Anatabloc. “I was horrified,” testified Cox. “I thought it was a train wreck. I thought it was improper that Maureen would try to push this product on Ann Romney.” He interrupted the sales pitch at a break in the conversation and helped change the subject.

Here’s my hypothesis of what was going on. Bob McDonnell didn’t like saying, “No,” to his wife. (Perhaps we’ll get testimony of what domestic life was like in the governor’s mansion but testimony so far suggests that she had a very bad temper.) He knew that some of the things she wanted to do were either potentially illegal or had “bad optics” but didn’t have the emotional stamina to stand up to her nagging and harangues. It was easier to kick things over to staff and let them take the heat.

And take the heat they did. As Eige testified in connection to block the purchase of the Oscar de la Renta dress, the first lady “wasn’t happy with us [regarding] the dress situation.” Likewise, Cox described her response as “an insane rant of an e-mail.” In a different incident, according to Willliams, Maureen’s chief of staff Mary-Shea Sutherland asked him for a job, confiding that “she was tired of the way she was treated.”

It is notable that McDonnell never applied pressure on his staff to do anything other than meet with Williams. He could plausibly say to Maureen and Williams (my quotes) that he “did something” by setting up a meeting, which was a routine gubernatorial practice, but “there was only so much he could do.” As a former Attorney General, McDonnell assuredly knew where the line of legality was, and he knew not to cross it…. in most instances.

As some have observed, it is “ungallant” to heap the blame on Maureen. But it’s hard to avoid doing so. Every scintilla of evidence presented so far suggests that the first lady was out of control. When frustrated, she flew into fits of anger. Her husband couldn’t handle her. His aides were continually running damage control.

As far as McDonnell himself, the most troubling evidence to surface to date is that which suggests he conspired with Williams to take two real estate loans totaling $70,000 to bail out his bad real estate investments and discuss how to cover up the transaction. I withhold judgment until McDonnell gives his side of the story. But he’s got some serious explaining to do.

Confessions of the Tic-Tac Man

Jonnie WilliamsBy Peter Galuszka

On afternoon last week, I was leaving the seventh floor courtroom at U.S. District Court  after Judge James Spencer called for a break. Jonnie R. Williams Sr., the prosecution’s star witness against former Gov. and Ms. McDonnell, had been on the stand for hours, playing various roles as remorseful solicitor, confident businessman, and obstructionist witness.

It just so happened that Williams and I were going to cross paths in the crowded outchamber of the courtroom. Without missing a beat, Williams stopped walking, made eye contact with me, and graciously held out his arm to signal that I should pass first.

I have no idea if Williams knew who I am, but the summer before, I had tried repeatedly to interview him for a serious of reports I was writing about Star Scientific, the tobacco company turned dietary supplement that is at the core of the trial against the McDonnells in perhaps the most important ever corruption trial in Virginia history.

Williams, 58, had been on the stand for four days, dressed as always in a shiny, expensive suit, his thinning hair coiffed around a high, bulbous forehead.

He has a strange voice, soft and proper, that sounds at times like an elder Marlon Brando or, without the harshness, Strother Martin, the man who played the cruel prison warden in the Paul Newman movie “Cool Hand Luke.” Either way, Williams does have a remarkable presence and he always seems to be selling, selling, selling something — either Anatabloc, his product that he claimed could do anything from cure Alzheimer’s to MS, or simply to promote  his own persona.

Williams, who has extensive immunity from the government, keeps underlining that his deal that could keep him out of jail, which means he must be honest. Honest means making “mea culpas.” They must sound sincere. When he said he pressured Maureen to get Bob to call his aging father on his 80th birthday, he recalled:  “That cost me hundreds of thousands of dollars to be able to do that,” he said. “The McDonnells were not my personal friends. It was good for my company,” noted Williams, who gave them more than $150,000 in gifts, loans, trips and cash.

That’s one version of Jonnie — pensive, regretful, honest. There was another one as well that came out when defense lawyer William Burck asked him to talk about his background in business. It was ego bait that Williams couldn’t resist.

It all came out — the confident kid from Fredericksburg who went to a little known business college in Rhode Island and came home to sell used cars and then took over a faltering eyeglass shop, learning how to pick up on one entrepreneurial idea and spin it into another.

Name dropping is a critical part of the Williams psyche, showing how impressed Williams was that his keen intellect had attracted helpful personalities far beyond his social kin. He keeps mentioning Johns Hopkins University Medical School and the “very bright” Dr. Frank O’Donnell who somehow came down from Baltimore and met Williams when he was working in the optical business. O’Donnell was a big league ophthalmologist, Williams said, and served as his mentor, even when he moved to the Midwest. Dr. O’Donnell came in with one business deal after another. One helped lead him to making machinery to cure near-sightedness, earning him millions and securing his personal finances.

Perking up during testimony, Williams ticked off medical terms as if he were the head of a medical school department. He also had developed a keen sense of what could and could not be said in good company, sort of like a small town boy of modest background who’s being let into the local country club for the first time.

When he took the McDonnells and a few others to La Grotta, an expensive Italian restaurant in downtown meeting after an Anatabloc session, he picked thousands of dollars’ worth of wine and informed the courtroom and jury that it was bad form to let your guests know if it’s $50 a bottle vintage of $500 a bottle. Of course, when he picked out the Louis XIII cognac for his male model friend, the McDonnells and some of their staff at a New York eatery in 2009, he was proud to reveal it cost $5,000.

“I really didn’t like it all that much but some people do,” he said. He also didn’t really like the Ferrari that he made a big effort to drive to Smith Mountain Lake in July 2011 so McDonnell could drive it at Maureen’s request while vacationing for free at Williams waterfront house. Williams says he prefers his Toyota Camry.

This same snobbery constantly extends to the medical and business hot shots who were helping build the idea that Williams’ use of anatabine, a substance found in tobacco, had remarkable curative powers. Jonnie was more than willing to tell you all about it, over and over, in his slow, calm, methodical voice.

Maureen McDonnell, who is being set up as the Fall Girl by her own lawyers, bought into the Williams’ spiel, big time. McDonnell’s professional staff, including Phil Cox and Jasen Eige, testified that they were deeply worried about Williams and kept on telling the governor to limit his engagement.

Smitten by Williams, Maureen kept pushing Jonnie and his miracle supplements, somehow overlooking the fact that there hadn’t been clinical trials on it and that Star Scientific had lost $230 million over the past decade (she still bought stock anyway despite Williams testimony that he told her it was a bad idea).

Rank and file Virginia researchers, whose imprimatur Williams so badly wanted, also were suspicious. When he’d show up pushing pills as samples, they called him the “Tic Tac Man.”

Cantor’s Self-Serving Special Election Scheme

cantor By Peter Galuszka

It looks like a small group of the Virginia Republicans elite has once again hatched a plot behind closed doors to manipulate elected politics without input from voters.

U.S. Rep. Eric Cantor, the victim of a surprising defeat in a June 10 Republican primary, has come up with a self-serving scheme to resign Aug.18 and finagle a special election Nov. 4 to pick his successor. The special election would be held along with a regularly scheduled one.

Normally, opposing candidates Republican David Brat and Democrat Jack Trammel, would routinely face election that day. With Cantor’s proposal, the winner of the special election for the 7th Congressional District seat would be able to take office immediately, instead of having to wait for usual matriculation of the other 434 Congressmen in January.

This is a back-door, move-to-the-head-of-the-class scheme. Presumably, the winner would be Brat who, taking office in November, would be placed ahead of other Congressional newcomers when it comes to coveted committee assignments. Good for the GOP. Bad for Democrats.

For Cantor, of course, it is a Big Win. Since his unexpected and earth-shaking defeat, the 51-year-old has been seen at such posh places as the Hampton is on the tip of Long Island schmoozing with Big Money. Cantor does have an advanced degree from Columbia in real estate finance and his wife was once a New York securities trader. Big Finance, along with Big Pharma and Big Managed Care, has been one of his biggest sources of election funds.

Larry Sabato, the University of Virginia political expert, by turns thought Cantor’s idea “generous” but also noted ”it’s highly probable that he has a deal in the works for his post-Congress life, and he’s eager to get it started,” Sabato was quoted as saying.

As might have been expected, Cantor made his announcement in the Richmond Times-Dispatch, his lapdog newspaper. Editors gushed that his announcement “features an extraordinary column by an extraordinary human being.”

It shows extraordinary cluelessness as well. Cantor, the Main Street Republicans and the TD’s club of Richmond elites don’t seem to understand that it is their very exclusivity that helped do Cantor in and give an upstart like Brat the edge.

Consider a cover story package that I co-wrote in the Chesterfield Monthly, one of the Richmond area’s up-and-coming publications. I found that it wasn’t just that Cantor ignored his district that did him in – it was a putsch by some rather annoyed Libertarians of the traditional ilk and small government moderates plus the Tea Party.

Leaders of the “malcontents” were lawyer Patrick McSweeney and Tea Party leader Jamie Radtke who ran unsuccessfully for U.S. Senate in 2012. In the “Bull Elephant” blog, Radtke compared Cantor and his Confederates as “mobsters” running around and snuffing out dissent among local conservatives.

Brat himself was ultra pissed off a couple of years back when he wanted to get the Henrico County GOP nod to run and replace Bill Janis. But, functioning as the old Soviet Politburo might have, a tiny group of Republican elders decided that the candidate would be Peter Farrell, the young son of utility powerhouse chieftain Tom Farrell of Dominion. In other words, it wasn’t exactly a day for waving the stars and stripes of Democracy. It was pure, Big League, Big Business inside diktat that could have taken place behind the crenelated walls of the Kremlin.

They didn’t give Brat a chance,”analyst Bob Holsworth told me. “That gave Brat the interest in taking on this Don Quixote-type campaign.

Now we get another closed-door deal. Hopefully, voters, conservative and liberal, will fire back.