Just 10 days after he left office as Virginia governor, Bob McDonnell and his wife Maureen were indicted by a federal grand jury on charges they accepted gifts and loans from a businessman in exchange for help in promoting his company.
Federal authorities Jan. 21 filed a 43-page indictment in the U.S. District Court in Richmond.
The indictment contends the McDonnells took part in a scheme to enrich themselves and family members through loans and gifts from Star Scientific Inc. and its former CEO in exchange for McDonnell and his office “performing official actions” to legitimize and promote the company’s products, including a dietary supplement.
Among the benefits for Maureen McDonnell was a $19,288 luxury shopping trip in New York City to buy dresses and accessories for the wedding of the couple’s daughter, according to the charges. The bills allegedly were paid by former Star Scientific CEO Jonnie Williams, who is identified as “JW” in the indictment.
The indictment paints a picture of a couple deep in debt before McDonnell ever took office as governor.
“Bob is screaming about the thousands I’m charging up in credit card debt,” wrote Maureen McDonnell in an email to a staffer in late 2009, according to the indictment.
“We are broke, have an unconscionable amount in credit card debt already, and this Inaugural is killing us!!” her email allegedly said.
The indictment said McDonnell had a half interest in Virginia Beach vacation rental properties which required $60,000 annually in mortgage and expense payments. The rent would not cover the bills and, with the economic downturn, the heavily leveraged properties proved unmarketable, the indictment said.
Maureen McDonnell allegedly told Williams in 2011 the McDonnells were having “severe financial difficulties” and asked for a $50,000 loan. She allegedly said she could help his company but she needed his financial assistance.
Maureen McDonnell told Williams at the same meeting the couple needed $15,000 to pay additional catering costs for their daughter’s upcoming wedding, the indictment said.
Williams provided both a $50,000 loan and a $15,000 “wedding gift” in May 2011, the indictment said.
The same month, Williams also picked up the $2,380 tab for a golf outing for McDonnell and family members. Other golf outings followed for McDonnell family members, all paid for by Williams, the government charged.
All told, the McDonnells, both 59, obtained more than $135,000 in direct payments as gifts and loans from Williams, the indictment said.
In return, the McDonnells allegedly arranged meetings for Williams with state officials and hosted events at the Governor’s
Mansion designed to promote Star’s products. The indictment described efforts by the McDonnells to conceal the nature of their dealings with Williams.
The indictment carries 14 counts, including conspiracy to defraud the citizens of Virginia of their right to honest services, honest-services fraud, conspiracy to obtain property under color of official right, and obstruction of an official proceeding.
The case has been assigned to U.S. District Judge James R. Spencer. The indictment asks the judge to order forfeiture of “not less than $140,805.46” and a list of items including a silver Rolex watch, two sets of golf clubs and designer clothing, shoes and accessories.
The indictment ends months of waiting after it became known that federal officials were investigating McDonnell in connection with Williams’ loans and gifts.
“This case should serve as a strong warning to those who might consider similar behavior,” said Richard Weber, chief of criminal investigation for the Internal Revenue Service. “No one is above the law and everyone is accountable for their misdeeds,” Weber said in a release.
McDonnell continued to profess contrition for his actions, but maintained his innocence.
“I deeply regret accepting legal gifts and loans from Mr. Williams, all of which have been repaid with interest, and I have apologized for my poor judgment for which I take full responsibility,” McDonnell said in a statement released by his lawyer, John L. Brownlee of Washington.
“However, I repeat emphatically that I did nothing illegal for Mr. Williams in exchange for what I believed was his personal generosity and friendship,” McDonnell said.
McDonnell repeated his denial of misconduct in a Tuesday evening statement in the lobby of the Williams Mullen law firm in Richmond, with wife Maureen, his daughter and his son-in-law by his side.
“I never promised and Mr. Williams and his company never received any government benefit of any kind from me or my administration – no contract, loan, grant, funding, legislation, budget appropriation, regulation, board or commission assignment or any other official state benefit,” McDonnell said.
“The federal government’s case rests entirely on a misguided legal theory,” McDonnell said. He said the U.S. Supreme Court has rejected the “radical idea” that merely making introductions, setting up meetings, and expressing support for a donor are illegal activities for a political figure. The charges, McDonnell said, “stretch the law to its breaking point.”
“I believe the facts and law are clearly on our side,” he said.
Maureen McDonnell’s lawyer was equally emphatic.
“Maureen McDonnell is innocent,” said her attorney, William A. Burck of Washington. “The Department of Justice has overreached to bring these charges,” he said in an email, referring to what he called “the unfounded suspicions of prosecutors.”
Current Virginia Gov. Terry McAuliffe said he is “obviously troubled” by the charges and the message sent about how the state government is run.
“As this case progresses, it is my sincerest hope that justice will be served and that Virginians get the answers to which they are entitled,” McAuliffe said in a statement.
“This is a sad day for Virginia, but I remain optimistic that we can work together to reform our system in order to prevent episodes like this from occurring ever again,” McAuliffe said.