The Tobacco Commission, GiftGate and Sleaze

TOBACCO_LEAF_ONE-226x187By Peter Galuszka

The latest turn in the McDonnell GiftGate scandal goes back to a familiar entity, the Virginia Tobacco Indemnification and Community Revitalization Commission which has acted as a large slush fund for favored projects in Virginia’s tobacco land for more than a decade.

No surprise there. The tobacco fund is swimming with money from a 1998 settlement from the four major tobacco companies and offers a cornucopia of funds for projects favored by the commission staff and board.

The settlement was a whopping $206 billion over 25 years to 46 states and the District of Columbia. States could distribute funds according to vague and broad guidelines but the gist was they were supposed to support help for people suffering from tobacco-related diseases and keep young people from smoking.

Virginia, of course, took that a step further and went for economic development in the state’s bright and burley leaf tobacco belt that stretches from Southside regions around Interstate 95 all the way west to the coal fields. The Virginia commission has a checkered history. Its former head, John W. Forbes II, was sentenced to 10 years in prison for wire fraud in 2010 for wire fraud involving skimming from the commission.

And when the commission got underway, its first act was not to stop teenagers from smoking, it was to send checks of up to $12,000 to people who held tobacco “quotas” in a now-defunct federal program to grow the leaf under government control and keep prices artificially high.

An article I wrote for Virginia Business a decade ago found that 28 percent of the checks didn’t even go to people who lived in Virginia but in places like Brooklyn, the Gold Coast of Chicago and Las Vegas. They happened to have inherited “quotas” and the Tobacco Commission felt they needed to be made whole since the tobacco industry was taking hits.

Now, The Washington Post reports, federal prosecutors are examining emails about whether Star Scientific boss Jonnie R. Williams Sr. was pushing Governor and Mrs. Robert McDonnell to help him get research funds from the Tobacco Commission so Virginia Commonwealth University and the University of Virginia could start investigating “anatabrine,” a substance derived from tobacco that Williams believes has miracle properties. He now uses it in his over-the-counter vitamin supplement product “Anatabloc.”

This is where it all starts getting squirmy. Lawyers for the McDonnells say that they did not intercede to help Williams get tobacco money despite the $150,000 or more they got from Williams in gifts and loans. The Tobacco Commission itself apparently did not give any money specifically for Star research.

But a slew of emails show that researchers from VCU and UVA had evidence that the McDonnells were influencing the tobacco commission to help Williams. “The governor would like to sponsor these trials as evidence of Virginia’s commitment to research and entrepreneurship,” wrote VCU diabetes researcher John Clore.

More evidence connects the McDonnells to the Tobacco Commission blitz. Mary Shea Sutherland, chief of staff for First Lady Maureen McDonnell, was on a private plane to attend a July 2011 conference in Maryland hosted by financially troubled Star whose very existence depends on expanding sales of Anatabloc, according to securities documents it has filed with the federal government.

According to the Post, under federal law, it can be illegal for elected officials to agree to take official actions in exchange for gifts and money even if they do not follow through on their promises or have the power to do so.

This is apparently the key question on which indictments could turn.

There’s a ton of coincidental or circumstantial material. The entire case crawls with bizarre connections. Here’s another one. Jerry Kilgore is a former attorney general who now represents Jonnie Williams. And guess who is the head of the Tobacco Commission? None other than Terry Kilgore, Jerry’s brother.

To sum it up, tobacco, Richmond power and lots of personal and family connections. It’s the Virginia Way!