Robert (Bob) McDonnell, former governor of Virginia
Maureen McDonnell, former first lady of Virginia
Star Scientific, made supplements it claimed reduced chronic inflammation
JW, CEO of Star Scientific (Jonnie Williams)
MoBo Real Estate Partners, owned two houses in Virginia Beach, half owned by Bob McDonnell. The houses were over-leveraged and the company was in deep debt.
THE FIRST MEETING
While running for governor in 2009, McDonnell's staff asked JW for permission to use his private jet. After McDonnell was elected, JW asked to meet with the governor-elect, you know, because he had been tooling around all year on his plane.
So they met at a Four Seasons in December 2009. Maureen McDonnell immediately hit up JW for a dress for the inauguration, and he agreed to buy her an Oscar de la Renta designer dress. After she told her husband's staff, they were like "are you crazy?" Actually, the indictment says that the staffer "expressed concerns ... and would be inappropriate and should not be done." Maureen "became upset" with the staffer, which apparently means she threw a tantrum, and she wouldn't let it go. Soon thereafter, Maureen sent that staffer an email:
I need to talk to you about Inaugural clothing budget. I need answers and Bob is screaming about the thousands I'm charging up in credit card debt. We are broke, have an unconscionable amount in credit card debt already, and this Inaugural is killing us! I need answers and I need help, and I need to get this done.Still, Maureen told JW she could not accept the dress, but would take a "rain check" from him. And it was quite the rain check! In fact, it was a deluge, as you'll see below the fold.
Ten months later, in October, McDonnell started using JW's private plane again, this time to attend a political event in Sacramento. JW met with the governor in Sacramento so they could fly back home together. It was his big chance to start pitching him on his supplements business, how it had all these great potential benefits, if only someone got around to doing scientific studies to prove it! The governor promised to connect him with the Virginia Secretary of Health and Human Resources.
The governor's staff did indeed facilitate a meeting between JW and the state health official. The secretary was "skeptical" because, you know, big campaign donor with shady unproven supplements didn't fit the bill. That didn't stop McDonnell from speaking at a company event in February 2011, allowing the company to use pictures of him at the event in its promotional literature.
[F]rom in or about April 2011 through in or about March 2013, the defendants participated in a scheme to use ROBERT MCDONNELL's official position as the Governor of Virginia to enrich the defendants and their family members by soliciting and obtaining payments, loans, gifts, and other things of value from JW and Star Scientific in exchange for ROBERT MCDONNELL and the [Office of the Governor of Virginia] performing official actions on an as-needed basis, as opportunities arose, to legitimize, promote, and obtain research studies for Star Scientific's products... [And] defendants took steps throughout that time to conceal the scheme.On April 11, 2011, Maureen McDonnell asked JW to take her on a shopping spree in New York City, because dammit, she still wanted that dress by Oscar de la Renta. You see, she needed that dress for a political event at the Union League Club in NYC, and if JW hooked her up, she'd make sure that JW would sit next to the governor at the event. JW was like, "Sure!"
But he didn't just buy her a sweet Oscar de la Renta outfit, which cost $10,999, but also spent $5,685 at Luis Vitton and $2,604 at Bergdorf Goodman. It was like a real-life Pretty Woman! And sure enough, JW was sitting next to the governor at that Union League Club event that evening.
On May 2, Maureen McDonnell had a private meeting with JW where she confided about her family's financial troubles and asked for a $50,000 loan. And if he ponied up, she could help out Star Scientific. Oh, and by the way, how were they EVER going to pay for their daughter's wedding in two months hint hint? JW was like "how much?" and Maureen was like "$15,000 for the caterers".
After confirming the story with the governor, JW wrote the check, informing the governor that loan paperwork was not necessary. All he wanted was for the governor to speak at an event down at a Florida outfit partly owned by Star Research that was testing out their supplements. The event, on June 1, was the week of the McDonnell daughter's wedding, so he couldn't go. Maureen agreed to go instead, and a week later, JW had his assistant cut two checks, one for $50,000, and the other $15,000. When the catering bill came up $5,000 lower than expected, Maureen pocketed the extra cash for herself. Bonus!
On May 29, the governor, his two sons, and his future son-in-law played golf at the Kinloch Golf Club. JW paid for everything even though he wasn't present. Expenses totaled $2,380, which is crazy for a round of golf, but hey, this club is EXCLUSIVE! Costs included:
$500 for caddie
$410 for merchandise at the pro shop
$270 in food and drink
On June 1, the day of her Florida event, Maureen bought 6,000 shares of Star Scientific. At her speech, she told Star Scientific investors that she was offering the governor's mansion for the unveiling of the company's new product.
On June 16, JW emailed Bob McDonnell asking the state to initiate studies of the firm's supplements at the Medical College of Virginia and the University of Virginia School of Medicine. Remember, the firm needed independent scientific confirmation that its products did what they claimed they did. No one was biting at the chance. So JW now expected the governor to make that happen.
The weekend of July 28, the McDonnells vacationed at JW's mansion on Smith Mountain Lake, Virginia. Maureen called JW to ask whether his Ferrari would be at the place so her husband could drive it. It wasn't, so JW had a staffer drive it up from Richmond, three hours away. Maureen then emailed JW a picture of McDonnell behind the wheel of the Ferrari. And to top it all off, JW even rented a boat for the family to use.
The same night he got to tool around in a Ferrari, McDonnell sent an email to his Secretary of Health ordering departmental staff to meet with Star Scientific people and the first lady.
At that meeting, on Aug. 1, JW told Department of Health staff that the company expected the universities to conduct the studies, and oh, wouldn't it be a grand idea to use state employees as guinea pigs? No, really: "JW discussed the idea of having Virginia government employees use [their supplement] as a control group for research studies."
After the meeting, JW and Maureen met privately. She was like, "my, what a nice watch you have there!" No, REALLY!: "MAUREEN MCDONNELL noticed JW's watch and asked what brand it was. JW informed her it was a Rolex. She informed JW that she would like to get one for ROBERT MCDONNELL because he would like a Rolex." Subtlety wasn't her strong suit, was it? JW was like, um, won't that look bad to have the governor wearing a Rolex? Maureen wouldn't hear of it, insisting JW buy her husband a Rolex, and instructed him to have "71st Governor of Virginia" engraved on it. She ended up giving him the Rolex on Christmas Day. Did she pass it off as her own gift? The indictment doesn't say, unfortunately.
On Aug. 5, one of the McDonnell sons and his friend played golf at Kinloch, charging $618 to JW's account. And then more golf on Aug. 12, when TWO of his sons charged $1,309 to JW's account. And hey, why not! More golf on Aug. 13, when the governor joined one of his sons for a $869 round of golf at JW's expense.
On Aug. 30, Star Scientific launched a new product at the governor's mansion. And you better believe they trumpeted the location in all their press materials. The governor attended the event, spoke, and then presented $25,000 checks to UVA and VCU as planning grants to encourage them to study the supplement.
On Sept. 9, Maureen is thinking ahead! She asks her stockbroker how to hide her ownership of the Star Scientific stocks from end-of-year ethics reporting requirements. The broker was like, "Ew!"
Star Scientific went on a road show promoting its new product. Maureen spoke at a Virginia event and then a Michigan one on Oct. 22. She took JW's private jet to the event. During the flight, a Star Scientific researcher pressed her on the guinea pig suggestion, and followed up yet again in an email the day after: "It would be of value to perform a study of Virginia government employees ... to determine the prevalences [sic] of autoimmune and inflammatory conditions." Then, they would all be forced to take the supplement, and finally, "a follow up data assessment [would be taken] to assess whether the inflammatory markers screen for at the initial visit have been decreased in employees who have taken [the supplement]".
Maureen responded that she'd talk to her husband to see what would be the "best approach for Virginia". Meanwhile, Star Scientific was trying to get UVA to take a lead on studying its supplement, but the university was still unconvinced.
Remember those end-of-year reporting guidelines? They required, among other things, disclosure of "gifts or entertainment valued in excess of $50 received by the state official from any business or individual." Maureen had sold all her shares in Star Scientific on Dec. 20 so that she wouldn't have to report them. But take a guess how many of JW's gifts were reported? I would've guessed NONE, but turns out they did report $2,268 in gifts for their stay at that home on Smith Mountain Lake in July. No word on whether that included gas for the Ferrari. All those other gifts magically didn't exist. Soon after the report was filed, Maureen bought back her shares in Star Scientific.
So now we're into 2012, and more golf! McDonnell and his two sons racked up another $1,424 to JW's account on Jan. 7.
Around the same time, the Secretary of Health and his staff were planning a reception for health care leaders in the state. Of course, the list didn't include Star Scientific because, well, they weren't health care leaders. Once Maureen got hold of the list that all changed, as she packed the entire reception with Star Scientific-related people. In fact, she emailed them at one point to urge them to add to the 39 people the company had already invited. Meanwhile, the Office of the Governor urged the Secretary of Health to add officials from UVA and other places they were trying to get to conduct clinical trials on Star Research's supplements. At this point, JW was complaining that the universities were not returning his calls, so Bob and Maureen McDonnell were trying to force them together at this reception. It didn't matter that one McDonnell staffer emailed his boss to say, "We need to be careful with this issue." The McDonnells were charging ahead!
On Feb. 29, McDonnell met with JW about transferring $50,000 of Star Scientific stock owned by JW to a brokerage account owned by MoBo, the Virginia Beach house business. They tried to find a way to make the transfer in a way that wasn't reportable because of their "mutual interest" in ensuring it would stay secret. Eventually, they decided that the $50,000 stock transfer wasn't feasible so they made it a loan instead. When JW's assistant put the name "Maureen McDonnell" on the memo line of the check, JW had him tear it up and write a new one without her name.
That night, the "Virginia health care leaders" reception took place, except it wasn't really about Virginia health care leaders anymore. Oh well.
The governor does product placement! In a meeting March 18 with the Virginia Secretary of Administration to discuss the state's employee health care plan, McDonnell pulled out some of the supplements from his pocket and pitched them on how great it had worked for him. He suggested that these staffers "reach out" to Star Scientific and meet with them. Kinda sad, huh?
On May 19, McDonnell asked JW for another $20,000 loan for MoBo, which was wired to the account on May 22.
Starting Aug. 31, the McDonnells vacation at a luxury resort in Cape Cod at JW's expense. JW also showered them with other gifts, such as "the defendants obtained yard work and other miscellaneous home departs at their personal resident from one of JW's brothers. Those services included the installation of a hot tub cover that JW purchased for the defendants and work to re-stain the defendant's deck at their personal residence."
On Dec. 21, Maureen asked her broker to transfer all her Star Scientific shares to accounts set up for her five children. She was clear that transfers had to happen before the end of the year to avoid reporting requirements. However, the transfers couldn't be completed before the end of the year, and she still had some shares in her account when the calendar turned. One guess whether she reported ownership of that stock.
On Jan. 15, 2013, on his ethics reporting firm, McDonnell wrote that his personal liabilities totaled $10-50,000. Of course, the loans totaled $120,000. The only gifts they disclosed was the Cape Cod vacation.
On Jan. 21, Maureen asked JW to pay for roundtrip tickets so her daughters could attend a bachelorette party in Savannah. Along with the free golfing, these are some solid conservative values in action! And how did she repay JW? She tried to pitch him on paying to stay at their Virginia Beach houses.
After that, the indictment details all the ways the McDonnells tried to hide their scheme—their failure to report their loans, gifts, and Star Scientific stock in various documents. Maureen lied to investigators about their family's relationship to JW ("close friends" are exempt from the gift rule in those disclosure forms), she lied about the existence of loan documentation, etc, etc, etc. There was some frantic effort to clean up their mess—update disclosure forms, ask JW's brother for an invoice for his work on their house, and return the dresses JW had bought Maureen.
But yeah, too little, way too late.
In case you were wondering, the governor of Virginia is among the highest paid in the country, earning $175,000. And of course, he gets a car, security detail and mansion. Maybe it's not enough to pay for $10,000 Oscar de la Renta dresses, but hey, isn't that what post-office K-Street gigs are for? The worst part about this whole affair is that they could've had all this and more, legally, had they just waited four years to become lobbyists.