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.

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4 responses to “Bob Takes a Hit”

  1. Again, the question isn’t whether Bob McDonnell did some shady things. He did some shady things. The question is whether he did any illegal things. The law should require the prompt reporting of all stockholdings. Instead, it only requires an end of year inventory I guess. So, selling and re-buying probably isn’t illegal. Maybe Bob McDonnell knew more than he’s letting on. I get that. I just wonder why none of this is translating into a call for tougher ethics laws. Shouldn’t elected officials be required to disclose any changes in stock holdings within 30 days? Shouldn’t they be banned from taking gifts over a minimal value (like $25 or $50)? Where is the hue and cry for reform?

    The funny thing is that despite all the shenanigans being exposed in this trial you don’t hear our political class vowing to strengthen the ethics laws in the state. In fact, in the last General Assembly session the few bills proposed to seriously strengthen the ethics laws were voted down or killed in committee.

    There’s a reason that Virginia received one of seven “F”s for potential corruption. It’s because the laws are lax and the loopholes so wide that you could drive a truck through them. This seems like just another example of an almost criminal General Assembly loophole.

    Hide in plain sight. Steal in plain sight. It’s the Virginia Way.

  2. Would any of the proposed ethics reforms have outlawed this stock-washing trick? That would seem to be a non-brainer.

  3. Andi Epps Avatar
    Andi Epps

    I told you so…
    By that, I mean to say that I caught this when going through the evidence. Bob understood the rules and more importantly, how (he thought) he could get around them. But I also believe there is evidence he never thought anyone would find. There’s another potential bang here, but I’m gonna email Jim and see if he thinks it’s post worthy.

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