McDonnell touts budget surplus as lawyers huddle


Virginia Gov. Robert F. McDonnell addresses the joint money committees of the General Assembly in Richmond on Monday as members of his cabinet look on. (Bob Brown/Associated Press)

Virginia Gov. Robert F. McDonnell announced Monday that the state finished its fiscal year in June with a significant budget surplus, a ray of good news overshadowed by an intensifying federal investigation into gifts and money provided to the governor and his family by a wealthy political supporter.

At the same moment the term-limited Republican appeared before a meeting of the General Assembly’s joint money committees to announce the $585 million surplus, his attorneys were prepping for a key meeting with federal prosecutors in Alexandria, where they argued that the governor and first lady should not face criminal charges over their relationship with the head of a ­dietary supplement company.

The contrast made for an unusually subdued legislative gathering for a governor at the end of his term delivering healthy financial news about the state.

While McDonnell was given a customary standing ovation upon entering the room, members of the Senate Finance, House Appropriations and House Finance committees, as well as cabinet members and a large crowd gathered in a Capitol Square hearing room, otherwise listened to his address without interrupting for the applause that usually accompanies such speeches.

“We have now achieved surpluses at the end of all four fiscal years of this administration with a cumulative record total of nearly $2 billion,” he said.

Timeline: Star Scientific and Gov. McDonnell

The money came from a combination of a $264 million revenue surplus, plus $321 million in savings in state spending. McDonnell also said the state’s rainy-day fund would exceed $1 billion by the end of the two-year budget he will propose in December.

“Unemployment is down. The rainy-day fund is up. The core functions of government are being funded well. General-fund spending is flat. And Virginia’s economy is growing,” he said to silence.

His attorneys met with federal prosecutors for nearly two hours, then left the U.S. attorney’s office in Alexandria quickly with only a cursory greeting to a crowd of reporters gathered outside.

“We’re all done for the day. Thank you,” John Brownlee, an attorney for the governor, said as reporters chased him into the street. “We just don’t have any comment.”

Not long after his team departed, a separate group of attorneys for first lady Maureen McDonnell made its way into the offices, connected to the federal courthouse. They too declined to comment when they emerged two hours later.

People familiar with the meetings said they brought no resolution to the situation and prosecutors continue to weigh their options.

In Richmond, McDonnell likewise avoided questions about the luxury items, five-figure monetary gifts and $120,000 in loans that Star Scientific chief executive Jonnie R. Williams Sr. provided to McDonnell and his family.

Asked after his address what information he could provide about his attorneys’ meeting 100 miles to the north, he replied, “Nothing.”

“I want to talk about the good news of the commonwealth,” said the governor, who in recent public appearances had offered at least limited responses to queries about the gifts controversy.

McDonnell has said he has not given Williams or Star any state favors in exchange for the gifts and money, which he recently returned. He and the first lady have promoted Star’s dietary supplement, Anatabloc, but the governor has said that was in line with their broader efforts to boost Virginia businesses.

McDonnell’s appearance came four days after he wrapped up a week-long statewide tour meant to highlight his accomplishments as governor and, perhaps, shift attention from the gifts scandal.

News reports over the weekend brought fresh attention to the controversy: The Washington Post reported that Maureen McDonnell bought $30,000 in Star stock in 2011, days after Williams wrote her a $50,000 check.

There were signs the new revelations might be leading to an erosion of McDonnell’s political support.

A well-known conservative talk-show host in Hampton Roads called for McDonnell’s resignation Monday.

John Fredericks of WHKT (1650 AM) said he had been an “unabashed, unequivocal supporter” of the governor.

The stock purchase changed that for three reasons, he said in an interview with The Post. First, he said, he believes the first lady timed stock sales and repurchases to skirt disclosure laws. Second, the stock gave the McDonnells a financial stake in the company they were promoting.

Finally, he said he found it hard to believe the contention of the governor’s legal team that the first lady bought the stock without his knowledge.

That, he said, amounted to throwing Maureen McDonnell — the governor’s wife of 35 years and mother of their five children — “under the bus.”

“Anybody that knows the McDonnells, that’s been in their company — this couple is inseparable. You can’t slide a piece of paper between the two,” Fredericks said. “He sits there, holds her hands, kisses her on the back of her neck and twirls her hair. . . . You’re going to tell me your wife is investing in stock, and turning it over three times, and you’re broke, and you don’t know it?”

Zapotosky reported from Alexandria. Rosalind S. Helderman and Carol D. Leonnig in Washington contributed to this report.

Laura Vozzella covers Virginia politics for The Washington Post.
Matt Zapotosky covers the federal district courthouse in Alexandria, where he tries to break news from a windowless office in which he is not allowed to bring his cell phone.
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