Is Maureen McDonnell “Madame Ten Percent?”

Military Moms From  Ft. Belvoir Attend Group Baby ShowerBy Peter Galuszka

When is too much, too much?

That’s my thought when I read the Richmond Times-Dispatch‘s intriguing story this morning that Maureen McDonnell, wife of the embattled governor, traded thousands of dollars worth of Star Scientific stock supposedly without her husband’s knowledge.

In May, 2011, Jonnie Williams Sr., head of the troubled Star Scientific dietary supplement maker, gave Mrs. McDonnell $50,000. Used $30,000 of it to buy 6,500 shares of Star stock without husband Bob’s knowledge.

Let’s see if we have this right. Williams “loans” Maureen money. She uses more than half of it to buy stock in Williams’ company. Why?

When the stock tanked, she sold it, only to rebuy more shares later, again without husband Bob’s knowledge. Again, why? Buying Star isn’t exactly like buying Apple.

None of this was clearly reported. Under Virginia law, stock holdings of a public official and a spouse of more than $10,000 must be filed in an annual statement of economic income. Gifts to immediate family members do not have to be reported. The stock holdings were apparently reported in such a vague way no one could easily make the link between the McDonnells and Star Scientific stock. (Note correction from earlier filing.)

You mean husband Bob, cash strapped because his vacation properties weren’t renting,  did not know that wife Maureen was trading thousands of dollars worth of stock while also promoting the firm’s products? He also didn’t know that the $6,500 Rolex was a “gift” from Maureen when it was really purchased by Williams? He did give the watch back.

By the way, Attorney General and gubernatorial candidate Ken Cuccinelli also held Star shares that he didn’t initially report. That was an “oversight” and he’s been cleared by prosecutors.

This is all getting too much. Bob McDonnell should have and should now go on TV and tell Virginians what the hell was going on. Completely, that is. Partial apologies and paybacks aren’t good enough. One wonders what state and federal investigators will come up next.

Each disclosure makes Virginia sound more and more like some little tinpot Third World country where a president-for-life sits on a pedestal while the wife and kids squander the country with payoffs, gifts or whatever.

Some years ago, for instance, I traveled extensively in Indonesia when iron-fisted Suharto was leader. His wife was known locally as “Madame Ten Percent” because in order for a foreign firm to get gas or oil or mineral rights, she needed a 10 percent payoff. It also reminds me of a major newsweekly magazine where I worked for 15 years. We had to disclose our holdings, including stocks, each year. So did our spouses.

The McDonnell camp keeps insisting that nothing was delivered due to its close ties with Williams, although Maureen did host lunches in the Executive Mansion for Star and pushed state officials to buy his products.

That’s OK, you see, because of Virginia’s daffy disclosure laws. Maureen’s lawyer has reassured us that everything was legal. McDonnell filed the stock ownership under “health care.” How helpful.

The Virginia Public Access Project, which tracks disclosures, couldn’t know about this because of the way it was reported, or not reported. The public didn’t know because if there is no data, there’s no disclosure. And it’s all legal and merry as a marriage bell.

Speaking of marriage, one gets a creepy feeling that the professional trouble shooters protecting Bob are throwing Maureen under the bus. Is she being set up to take the rap? Gee, it would be really hard to indict her.

As has been noted, the McDonnell camp has been turning on Jonnie Williams as well. Star says it won’t be indicted and is “cooperating” with prosecutors.

You may have thought that he and the McDonnells were good, good friends. Well, think again.

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18 responses to “Is Maureen McDonnell “Madame Ten Percent?””

  1. DJRippert Avatar

    Virginia is a tin horn dictatorship. Instead of a single “strong man” or “strong woman” we have an inbred cadre of state legislators and crony capitalists operating in a symbiotic effort to loot the commonwealth.

    Many of our state legislators are feeble minded but cunning people who squirm to elected office through blind obedience to one of the two parties. Many want elected office not because of a sense of duty but because holding that office will elevate their social status and standard of living. State senators, for example, get invited to cocktail parties they would never see if they didn’t hold that office. They are asked to write college recommendations by constituents who will find ways to repay the favor. They are taken to watch sporting events in skyboxes they would never see except as a downpayment on future favors from the skybox owner.

    All of this is intoxicating, no doubt. The “gifts” are things that the politician might never be able to justify if they had to pay for them themselves. Two days after Ken Cuccinelli announced his vague plan to cut Virginia tax breaks for crony capitalists he was the guest of Consol Energy at a Pittsburgh Penguin playoff game being held at the Consol Energy arena in downtown Pittsburgh.

    Do you think that a man who claims he can’t scrape together $18,000 to repay ill-advised gifts would spend his own money to be wine and dine at an NHL playoff game in Pittsburgh? Of course not.

    Being a politician in Virginia is a lot more lucrative that the salary you draw from the state. There are countless big companies looking for favors who will fund your jet setting lifestyle. There are plenty of crony capitalists around to give you a taste of the high life. Drop a hint to your friendly Dominion lobbyist that you are a Redskins fan. Bada-bing, you’re watching the next game from a suite.

    But don’t lose that office! All of the perks of being a politician go away if you ever leave politics. Remember, nobody was giving you these gifts before you got elected and nobody will give you those gifts after you are finished with your political career.

    If you want to preserve the lifestyle, you must continue to hand out the political favors in return for big campaign contributions. God knows, nothing crushes the competition like a big war chest. And make sure you get into a gerrymandered district. The only thing better than money is to set up political boundaries dominated by your political friends. Keep the off-year elections! The last thing you need is a high rate of voter turnout. Make sure Virginia remains the most difficult state for getting onto the ballot. You certainly don’t need some independent challenging you.

    But most of all – for God’s sake – do NOT agree to a special session of the General Assembly to discuss ethics directly ahead of an election. God forbid. The political pressure might actually require that the session do something concrete about lax ethics laws. And then what? Live your life like an average Virginian without all expense paid first class trips to Paris and tickets to NHL playoff games? Perish the thought.

  2. Amen. I am constantly amazed at how dishonorable and self-centered our elected officials are. And the lack of shame on their parts is astonishing. But maybe I’m the fool here. Perhaps this is how it’s always been and always will be. An aside: I like the off-year elections. I think it allows us to focus on the task at hand (election of a governor) without being totally distracted by a presidential election.

    1. DJRippert Avatar

      I’ve lived in Virginia essentially my whole life and I think that’s how it has always been.

  3. I’m agog at the “coincidence” that Maureen McDonnell took the gifts intended for her husband and daughters and got money from the same company and bought and sold stocks from the same company and Bob did not know.


    something is so rotten in Denmark that you can smell it a zillion miles away.

    Either Maureen McDonnell is one of the slimiest first ladies in Va …scratch that – US history or we have an world class case of “plausible deniability”.

    these two have raised kids… I shudder to think what those kids have be taught..

    yessiree… “family” comes FIRST!…

    did these folks all of a sudden go from honest and ethical to this or were they like that all along – and this just got exposed?

    it makes you wonder…

    @Viper – stick around… we may disagree on some things (not this apparently) but you’ll find plenty of others who will agree with you here…on right-leaning politics!


  4. Les Schreiber Avatar
    Les Schreiber

    If you believe that the “Guv”was unaware of these transactions I can sell you a bridge the connects Manhattan and Brooklyn real cheap. Didn’t they file a joint tax return for that year?

    1. They probably did file a joint return and my bet is she does the taxes in the family. He just signs when told to. I present my own circumstance: I’ve been married 36 years (to the same woman) and I’m the one that has always done the taxes. When it’s time to send them off I hand her a pen and she signs. She’s never been interested in going over the taxes with me. That’s the way it works for us–a combination of trust, division of labor, and not wanting to be bothered (prior to and for the first few year of our marriage she was a bookkeeper, so it’s not that she couldn’t audit my work). Perhaps it’s the same for the Governor and his wife.

      1. yes..but does your wife by and sell 30K worth of stock and not tell you?

        In our household – anything over couple hundred dollars gets “communicated” and thousands require a full-up “consult” and veto power.

  5. “plausible deniability” Les… repeat that …. and you’ll start
    to get used to it!!! you gotta see this from McDonnells point of view!

    where’s you “empathy”?

    ok so which is true:

    1. – McDonnell “used” his wife to do this

    2. His wife “used” her Husband to do this

  6. DJRippert Avatar

    “The person familiar with the stock purchase said the first lady e-mailed Williams from time to time to check how the stock price was doing.”.

    Yes, I often e-mail the CEOs of publicly traded companies to find out how the stock price is doing. It’s so much more intimate and fun than using my iPhone or any of the dozens of free, online investing web sites.

    This story is just getting weirder and weirder.

    Les’ point about the tax returns is a good one. Mrs. McDonnell apparently sold the stock on Dec 20, 2011 but then reinvested the proceeds back into the stock on Jan. 20, 2012. I can only assume they wanted to force a tax loss to offset other tax gains. In other words, the sale of the stock was part of a tax plan that would require knowledge of the ownership of the stock.

  7. Just when you think it couldn’t get any worse… it gets worse.

    Just wondering: Was a possible motive for selling, and then re-buying, the Star Scientific stock to dodge reporting it on McDonnell’s financial disclosure form? What’s the time window for reporting ownership of a particular asset?

    1. DJRippert Avatar

      I hadn’t even thought of that. I guess my native criminality is insufficient for me to consider elected office in Virginia.

  8. OMG Bacon! the heck you say! surely they would not have done such a slimy thing !

    win-win = don’t disclose.. claim loss on taxes… hmmm….

    It’s ok… we’re pretty sure than Kaine and Warner did just as bad on MWAA and stuff, right?

  9. Peter Galuszka Avatar
    Peter Galuszka

    Give Jim a break! After he all, he’s down at the South Carolina beach enjoying the view .You want to rattle his gin and tonic?
    Have a heart!

  10. well I figured after he did his Toodle-oo, he was gone but noooooo.. he had to comment once more!

    besides – this is supposed to be a “working vacation”. He has assignments and he can’t do them right if he gets all liquored up.

  11. wesghent Avatar

    It’s legal to sell stock to establish a loss, then buy it back to regain a position in that company. What’s not legal is all the unreported and insider activity of our governor and his wife that show bad judgment and a lack of trustworthiness. This is not a party matter, it’s ethics and public trust. Virginia has had a high standard over the years in public service, though not perfect, especially in racial matters. Can we tell our members of the General Assembly to address these problems? I hope so, but time will tell. Right now we are being embarrassed by people who seem to think they are “the elect,” not just elected.

    1. DJRippert Avatar

      It’s completely legal to sell stock and then buy it back to force a tax loss. I just thunk that the governor would have known about the stock since it became part of the family’s tax return (I assume they file jointly).

  12. well… each thing by itself is “legal”. the gifts are “legal”; buying and selling stock are legal. selling it at a loss to lower your tax due bill is legal and effectively not reporting the gifts is legal because there is no penalty for not doing so.

    and I’m quite sure that kind of thinking went into the calculations but it was obviously bereft of judgement or even common sense.

    I don’t have any hope at all that the GA will do anything serious – beyond some window dressing… For one thing – it would require the GOP to admit one of their own was less than wonderful on ethics.

    I’m still trying to understand how “godless” progressives are worse than the “Christian” GOP.. … I guess it means Church is sorta like a sin toilet…. eh?

  13. I don’t get the quotes around “legal.” Legal is well . . . legal. And the sum of legal transactions is legal. I agree with Wes on this, while all legal, it reflects poor judgement and lack of trustworthiness. I don’t know why people in power don’t step back sometimes as they decide to do something (or not) and ask themselves, “Would I want to read about this the front page of my local pager?” or “Would my mother (parents) be proud of me if they found out about this?” And I agree further with Wes that our GA needs to address it (and they will if we (citizens) demand that the do). I vote for forbidding them all together. There might be a time when protocol dictates that a governor give or accept a gift on behalf of the State– that’s ok (as long as the gift rec’d is given to a museum or held to be auctioned off at the end of term, and our (taxpayer paid for) gift isn’t extravagant). As for the receiving gifts from business people, associations, political groups, etc.–no.

    I have to ask, where did “godless” progressives and the “Christian GOP” enter into this discussion? Keeping it partisan, aren’t you Larry? Just like the good liberal you are.

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