In fact, the federal indictment of the former governor returned last week included new details of the former governor’s lack of disclosures in his interactions with businessman Jonnie R. Williams Sr.
Michael Herring (D), commonwealth’s attorney for Richmond, who has led the state probe since November 2012, said he alerted McDonnell’s attorneys to the closing of the investigation Monday.
“There will be no further resources devoted to investigation or review of materials from a state perspective,” Herring said. “Any violations of state law would be subsumed and covered by the evidence in support of the federal investigation.”
McDonnell and his wife, Maureen, were indicted in U.S. District Court in Richmond on 14 felony counts last week. They are charged with accepting $165,000 in gifts and loans from Williams in exchange for using the governor’s office to promote Williams’s company, Star Scientific.
Federal prosecutors had been investigating McDonnell’s relationship with Williams for months.
The state investigation dealt with a more narrow issue: whether McDonnell properly disclosed his interactions with Williams on annual forms filed with the state. Knowingly violating state disclosure laws is a misdemeanor.
“The prosecution of a lesser state offense would be counterproductive,” Herring said Monday, explaining his action.
He said he “would not feel comfortable” saying whether he thinks McDonnell broke state law. But asked whether Virginia residents should conclude that state investigators had ended the probe because they decided that McDonnell had complied with the law, Herring said, “No.”
An attorney for McDonnell did not respond to a request for comment. A spokesman for the U.S. attorney and an attorney for Maureen McDonnell declined to comment.
The McDonnells have pleaded not guilty to the federal charges. The former governor has said that he made no promises to Williams to do anything in exchange for the gifts and loans and that he tried diligently to comply with Virginia law.
In a public statement Jan. 21 after the federal charges were unveiled, he referred to the largess he received from Williams as “legal gifts and loans.”
The former chef at the executive mansion first told state authorities in March 2012 that Williams had paid $15,000 for catering at the wedding of one of the governor’s daughters, a gift McDonnell did not disclose.
Virginia law allows elected officials to accept personal gifts of any value, provided they disclose those worth at least $50. An official is not required to enumerate gifts to immediate family members or those from “personal friends,” provided they are given without regard to an official’s position.
The General Assembly is debating tightening those rules, including placing a cap on some gifts at $250.
McDonnell has said the catering was a wedding gift to his daughter and therefore did not have to be disclosed. But the chef provided documents showing McDonnell had signed the contract for the event, assuming financial responsibility.
Federal prosecutors also say that Maureen McDonnell asked Williams for the check, not as a gift for her daughter but instead after fretting that she did not know how she and her husband would pay for their daughter’s reception.
In November, then-Virginia Attorney General Ken Cuccinelli II (R) designated Herring to conduct a review of the matter under a law that requires the attorney general to appoint a local prosecutor “if he determines that there is a reasonable basis to conclude that any officer or employee serving at the state level of government has knowingly violated” disclosure laws.
State law imposed a statute of limitations that required charging the governor within a year of possible violations coming to light.
As the federal probe heated up, an agreement was reached to extend that deadline.
But the deadline, now early February, is looming, and a state charge could complicate the federal case. Trial is scheduled for July 28.
McDonnell’s defenders have cited his insistence that he did not violate Virginia’s admittedly lax ethics laws as a sign that federal authorities have overreached with their charges, attempting to criminalize behavior that has been common in Virginia.
But the federal indictment contains new information that underscores why the investigation into possible state violations had been opened.
For instance, authorities allege that Maureen McDonnell told her broker that she needed to find a way to avoid publicly disclosing stock she had purchased in Star Scientific. State law requires elected officials to list all stock held by them or their spouse worth at least $10,000.
Maureen McDonnell sold her Star stock in December 2011 and then repurchased it in January 2012, after the form was filed for 2011.
A year later, the indictment alleges that she again tried to evade disclosure by transferring much of her stock to her children’s names. The transfer took place Jan. 2 but was made effective by the broker Dec. 31, federal prosecutors say.
Federal authorities also say that Williams paid for the former governor to golf three times with his sons at an exclusive country club in the Richmond area in 2011 and 2012. The McDonnells racked up hundreds of dollars in greens fees, caddy costs and charges at the pro shop. None of that was disclosed. (His sons separately golfed two additional times on Williams’s account, federal prosecutors say.)
In July 2011, the McDonnell family vacationed at Williams’s lake house for four days and borrowed the businessman’s Ferrari. McDonnell disclosed that gift, valuing it at $2,268. Authorities say that was the rental fee for a boat Williams provided for the family’s use, which would suggest McDonnell undervalued the gift.
Prosecutors also say Maureen McDonnell asked Williams to buy her a Rolex watch in August 2011, which she gave to her husband for Christmas. If he knew the watch had been purchased by Williams, state law would likely require its disclosure.
There’s also the matter of Williams’s loans — $50,000 directly to Maureen McDonnell and $70,000 to MoBo Real Estate, a limited liability corporation the governor owned with his sister.
Virginia law requires disclosing liabilities held by elected officials and their spouses, as well as the occupations of all lenders.
In 2011 and 2012, McDonnell disclosed that his wife had received a loan from an individual creditor employed in “medical services.” The next year, he described the loan as having been provided by someone in “health care.” Williams’s company sold nutritional supplements.
McDonnell did not disclose the 2012 loan to MoBo. He has said state law does not require revealing corporate liabilities. Federal prosecutors allege that McDonnell and Williams discussed how to structure the loan to avoid disclosure.
Herring declined to comment on the specifics of McDonnell’s actions, but he described the general lesson of the probe for other elected officials this way: “I think when you report gifts or benefits received from other parties, you have to do it in a transparent way. It can’t be mischaracterized.”