Donnie Williams, a former sheriff's deputy, told prosecutors that he believed he was doing the work at the McDonnells’ home for free last year, at the request of his brother, the two people said. Williams eventually was paid for the work.
At the time of the renovations, Jonnie Williams was giving the McDonnell family more than $160,000 in gifts and money that the governor has said were loans. Donnie Williams told prosecutors his brother believed the financial assistance to the governor would help Star, according to two people familiar with his interviews.
The events surrounding the improvements to the governor’s house are in dispute. Jason Miyares, a spokesman for McDonnell’s legal team, said Williams did a series of small projects in late 2012 and early 2013. He said text messages show that Donnie Williams’s work continued into February.
Miyares said that Williams submitted a $1,685.50 bill for the work March 4 and that the McDonnells promptly paid it. He described the arrangement as a routine business transaction. “Any suggestion otherwise is categorically false,” he said in a statement.
“Governor McDonnell always expected to pay for his services when the work was completed and in fact did so,” Miyares added.
Two people familiar with the investigation said Williams told prosecutors that the work was completed in November 2012.
Williams told prosecutors that first lady Maureen McDonnell asked him to submit a bill this year, months after the work was completed, the two people said, and that he was paid then.
By that time, authorities were conducting interviews about the McDonnells’ dealings with Jonnie Williams.
The new information provides a fresh example of the McDonnells’ financial and social entanglements with Jonnie Williams in 2011 and 2012. It also suggests that the McDonnells turned to him for help in arranging relatively mundane tasks, as well as for luxury items.
The recent meeting between prosecutors and Donnie Williams is also an indication that the federal probe remains active.
Even as this week’s election to choose McDonnell’s successor dominated state headlines, prosecutors continued their work. A spokesman for the U.S. attorney’s office declined to comment.
Prosecutors have been exploring whether Williams or his company received anything in exchange for a steady stream of vacations and luxury goods, as well as money that the governor has described as loans from the businessman.
Williams was bestowing this largess on the McDonnells as they took steps to promote his Virginia-based company, including hosting a 2011 luncheon at the governor’s mansion to mark the launch of a Star Scientific dietary supplement.
On Thursday, Star Scientific announced that Williams will resign as chief executive and take a different job with Star, part of a corporate reorganization. He will be replaced by an Alzheimer’s researcher from Florida as the company refocuses on drug research.
The timing of the announcement was not directly related to the criminal probe, according to a person familiar with the decision, but the action was taken in part because of the investigation. Giving money and gifts to public officials is against Star company policy.
Members of Star’s board were mindful that publicity surrounding Williams’s interactions with the governor would raise investor concerns if Williams remained in a leadership role and the federal probe resulted in charges, the person said.
McDonnell apologized over the relationship with Williams, but he has insisted that he broke no laws and did nothing to help the executive or Star that he would not have done for any state business. The company received no state contracts or economic incentives, and its employees received no board appointments.
When details of the McDonnells’ relationship with Williams first emerged in the spring, a spokesman for the governor said he and the first lady were family friends with Williams and his wife.
More recently, as it became clear that Williams was cooperating with the federal investigation of the governor, the governor’s legal team said in public statements that Williams had a troubled business past and that his account of his interactions with the governor were not credible.
They said Williams began cooperating with authorities in response to a separate federal probe of Star’s security practices.
Miyares said that Donnie Williams was one of four contractors hired in the same months to work on the McDonnell house, which is outside Richmond in Henrico County, and that all of them were paid in late February and March of this year. “Mr. Williams work was done in the regular course of business, no different than the other contractors hired by the McDonnells,” he said in a statement.
When Williams’s work was done and when it was paid for could be important in a parallel state investigation into whether McDonnell complied with state financial disclosure laws.
The governor has repeatedly said he followed Virginia law as he understood it, which allows elected officials to accept gifts of any size, provided they make an annual disclosure of those gifts worth more than $50.
The law does not require the disclosure of gifts to officials’ immediate family members, including spouses.
McDonnell did not disclose receiving home services in 2012 from Donnie Williams, as would have been expected if the work was provided free of charge and finished before the end of the year.
If the McDonnells paid full price for the work or if it took place in 2013, there would have been no need for disclosure.
The McDonnells bought the Henrico County house in 2006 for $835,000 when they moved to Richmond from Virginia Beach after Robert McDonnell’s election as state attorney general. They lived there until they moved to Virginia’s historic Executive Mansion in 2010, when McDonnell took office as governor, but they have not sold the house.
In July, the Richmond Times-Dispatch reported that McDonnell had been renting the house to Cynthia Romero, the Virginia health commissioner, who moved from Virginia Beach to take the state job in January.
At the time, a McDonnell spokesman said the governor’s daughter and her husband had been living in the house before that.
Rent paid by Romero was used to help defray the McDonnells’ monthly mortgage bills.
In addition to the Richmond area home, the McDonnells have other real estate interests. The couple and the governor’s sister bought a vacation house in Virginia Beach for $1.15 million in 2005 and another for $850,000 in 2006. With two of McDonnell’s sisters, they bought a $1 million home in 2007 at the Wintergreen mountain resort in central Virginia.
They rent the three homes to vacationers for additional income.
But Maureen McDonnell has told friends in recent years that there had been trouble keeping up with monthly payments.
Alice Crites contributed to this report.