What, exactly, is the relationship between Virginia Gov. Robert F. McDonnell, his family and Attorney General Kenneth Cuccinelli with the head of a money-losing, tobacco-related dietary-supplement maker that is a under investigation by federal prosecutors?
All involve Jonnie R. Williams Sr., chief executive of Star Scientific, a Henrico County-based firm that has sold discount cigarettes, smokeless tobacco and dietary supplements, including one called Anatabloc, that might someday prove to have medical applications, according to The Post. A key ingredient for Anatabloc is found in tobacco and other plants, the newspaper says.
The Post’s remarkable reporting paints an intriguing picture of how influence appears to be traded on at the highest levels in Richmond. Such things do occur around the dogwood and magnolia grounds of the State Capitol, but a decades’ long conceit has had it that the Virginia version is more gentlemanly and discreet than, say, what goes on in New Jersey.
The Post details links between Star Scientific and Williams and the McDonnell family. Not only was Star a major campaign contributor to McDonnell, donating flights on its corporate jet, it also provided $15,000 worth of catered food for the wedding of McDonnell’s daughter in 2011.
And McDonnell’s wife, Maureen, a former Washington Redskins cheerleader and skilled marketer, attended a Florida conference to tout Star’s products three days before her daughter’s wedding, the Post reported.
A spokesman for McDonnell says the governor did not disclose Williams’ wedding gift of the catered meal because the gift was not intended for him. McDonnell and Williams declined to be interviewed directly by The Post.
The Star Scientific case becomes even more intriguing with Cuccinelli’s involvement. The attorney general and Williams are friends. Cuccinelli has stayed at Williams’ house and used his boat. In 2010, Cuccinelli bought 5,060 shares of Star stock for $1.98 and later increased his holdings by more than 3,500 shares, at $2.79 a share. He sold 1,500 shares at $4.70 a share last year, The Post said, making a $7,000 profit.
Cuccinelli, however, failed to disclose his financial interests in Star for more than a year. An aide told The Post that the attorney general did not realize that his financial interest in the firm had surpassed the $10,000 threshold needed for reporting and has since updated his disclosure. Records also show that Cuccinelli was given a trip to Kentucky valued at $3,200 and a box of “food supplement” worth $6,700.
It’s always risky when the state’s top legal officer gets involved in direct, personal financial investments in a high-profile state company. But the Star case becomes even more quirky because last week, Star was sued by a former shareholder, Francis J. Reuter, who claims the company misled investors about research involving the dietary supplements and the fact that the firm has been subpoenaed by the U.S. attorney’s office for Eastern Virginia. The company has said that the suit is without merit.
Star Scientific had been seen as some of the state’s business elite as a way the Old Dominion can wean itself from its historic dependence upon harmful tobacco products by deriving healthy products from the crop. But last year, the firm lost $22.9 million and laid off workers, according to The Post. It needs Anatabloc to be successful, the Post reports.
A final thought about the Star case. The long silhouette of the tobacco leaf seems to be lurking here, as it has in other unsavory situations in the state. Virginians have long tried to come to terms with the killer and highly profitable weed. After a major lawsuit settlement against the cigarette giants, Virginia set up its Tobacco Indemnification and Community Revitalization Commission in the hopes of moving away from the industry. At first, the commission handed out thousands of dollars to holders of now-defunct tobacco-growing quotas. Then it doled out hundreds of millions of dollars that did not generate jobs or boost salaries, according to a report by the Joint Legislative Audit and Review Commission in 2011.
The clincher was when John W. Forbes, who served under former James S. Gilmore (R) was convicted of using more than $4 million from the commission for a home, investments and to start a business.
It isn’t clear if the Star matter will involve criminal violations, but the link to tobacco is undeniable.