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.
