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Troutman lawyers to handle state tax dispute

Virginia Attorney General Ken Cuccinelli is stepping aside from a tax lawsuit while denying there was any conflict of interest in the matter.

The attorney general’s office had been defending the state in a tax dispute with the Henrico-based Star Scientific Inc., a company in which Cuccinelli had invested. Cuccinelli’s office today announced the appointment of outside counsel.

Former state Attorney General Stephen D. Rosenthal, a Democrat, and former state Solicitor General William H. Hurd, a Republican, both of the law firm of Troutman Sanders, will be handling the case pro bono for the Virginia Department of Taxation, Cuccinelli’s office said.

“We hold the Office of the Attorney General in high regard and we are pleased to assist the attorney general and the commonwealth by taking this case at no cost to Virginia taxpayers,” Rosenthal and Hurd said in a joint statement.

“To be clear, there was absolutely no conflict of interest with the attorney general’s office.  But in an abundance of caution and to move past what has become an unnecessary distraction for the office and the attorney general, the case was given to outside counsel,” said a spokesman for the attorney general’s office.

Star Scientific is suing the commonwealth in a disagreement over the interpretation of state tax law, alleging an erroneous assessment.

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