Star Scientific chief believed McDonnell was helping firm get funding


Virginia Gov. Robert F. McDonnell listens during an event on Aug. 20 at ICF International in Fairfax County. (Alex Wong/Getty Images)
October 11, 2013

A wealthy political donor has told federal prosecutors that he believed that Virginia Gov. Robert F. McDonnell was helping his company get state research funding at the same time the executive was providing McDonnell’s family with gifts and money, according to two people familiar with the donor’s account.

E-mails obtained through the Freedom of Information Act also show that researchers and scientists working with the company thought that McDonnell (R) and his wife, Maureen, wanted the company to receive the funding from the state’s tobacco commission. The researchers were in communication with Star Scientific Inc. officials during the same months that Chief Executive Jonnie R. Williams Sr. said he believed McDonnell was helping, the e-mails show.

Records show Star did not ultimately get funding from the tobacco commission. And a spokesman for McDonnell’s attorney and an attorney for Maureen McDonnell denied that either the governor or his wife agreed to try to help Star get the money.

The effort to win commission funding is of keen interest to prosecutors as one piece of a possible pattern in which McDonnell and his wife offered to assist the company in 2011 and 2012, according to people with knowledge of what Williams has told investigators. That is the same time frame in which the McDonnell family received the gifts and money.

Under federal law, it can be illegal for elected officials to agree to take official actions in exchange for gifts or money — even if they do not ultimately follow through on their promises or have the power to do so.

Timeline: Star Scientific and Gov. McDonnell

The new information comes as McDonnell’s defense against potential criminal charges for his dealings with Williams has come into focus:

McDonnell has acknowledged that his family took more than $150,000 worth of gifts and cash the governor has said were loans from Williams. But his legal team says that any claims from Williams that the governor agreed to help the businessman or his company in exchange for the gifts are not credible.

“The governor never asked or directed anyone . . . to assist Star Scientific in obtaining research funding from the Virginia Tobacco Fund,” spokesman Jason Miyares said in a written statement. “Also, the Governor never told anyone at Star Scientific that he would try to help the company get funding from the Tobacco Commission.”

A key question for prosecutors is who is most believable about the interactions between the governor and Williams.

Federal prosecutors have been investigating the largess that Williams has provided to the McDonnell family, which included the cash, vacations, golf outings and gear, a $15,000 shopping trip in New York for the first lady, $15,000 in catering for the wedding of one of the governor’s daughters, a $10,000 engagement gift for another and a Rolex watch Williams purchased for the governor.

As part of their investigation of the governor, prosecutors have spent months conducting interviews and gathering documents to determine whether there is evidence to corroborate Williams’s account.

The documents reviewed by The Washington Post, which represent only a fraction of those that have been collected in recent months by the FBI, do not provide a definitive link between McDonnell and the company’s efforts to get funding.

But they do suggest that Williams was telling other Star employees in 2011 and 2012 that the governor was helping — one piece of information that could lend credibility to Williams’s claims.

A spokeswoman for the U.S. attorney’s office declined to comment. An attorney for Williams also declined comment, as did an attorney for Star, although a company spokeswoman has previously said the company did not seek special benefits.

Anatabloc e-mails

The Virginia tobacco commission distributes much of the state’s share of the 1998 legal settlement with major tobacco companies. It gives millions each year to projects intended to help the state’s economy recover from the declining tobacco industry.

Bill Burck, an attorney for Maureen McDonnell, said the first lady also “never helped Jonnie Williams or anyone else obtain funding” from the tobacco commission.

“She has never been involved in or attempted to influence the work of the Virginia Tobacco Commission,” he said in a statement.

Miyares noted that the governor has no authority to award the funds, which are doled out by the independent commission. Commission members are appointed by both the governor and the legislature.

But even though McDonnell does not distribute the funds, three McDonnell Cabinet members sit on the board, along with other citizen appointees of the governor and a number of Republican lawmakers.

A series of e-mails written in 2011 and 2012, included among hundreds of documents reviewed by The Post, show that Star hoped the tobacco commission would pay for scientists at the University of Virginia and Virginia Commonwealth University to conduct clinical trials on anatabine, a chemical found in tobacco and other plants that is the key compound in Star’s new product — a nutritional supplement called Anatabloc.

They hoped to show that the pill, which was launched with a luncheon at the governor’s mansion in August 2011, had anti-inflammatory properties and could be helpful in treating a variety of diseases.

In the e-mails, scientists at VCU and U-Va. described what they had been told by the company about the project.

In June 2011, VCU diabetes researcher John Clore wrote to university colleagues about a phone call he had just received from a doctor at Johns Hopkins University, who was also a paid consultant to the Star subsidiary that makes Anatabloc.

Hopkins scientist Paul Ladenson had informed Clore of a research opportunity involving anatabine, Clore wrote.

Clore wrote that Ladenson — who would later vacation on Cape Cod with Williams and McDonnell — had told him that Williams was a “very good friend” of the governor’s.

“The governor would like to sponsor these trials as evidence of Virginia’s commitment to research and entrepreneurship,” Clore wrote.

A month later, the e-mails show that Clore and another scientist from the University of Virginia flew on a private jet courtesy of Williams from Virginia to Baltimore, where they attended a Star seminar on anatabine at exclusive Gibson Island in the Chesapeake Bay.

“It was an interesting meeting,” Clore wrote to colleagues upon his return. “The governor would like to use tobacco funds to support Virginia research demonstrating the states commitment to support research to reduce health care costs in the commonwealth.”

He wrote that the company was preparing to give scientists preliminary grants of $25,000 so they could plan for larger studies that would be funded by the tobacco commission. He wrote that the larger studies had a “very high likelihood” of getting funded.

The e-mails show that another passenger on the private plane for the event was Mary Shea Sutherland, the chief of staff to Maureen McDonnell.

Williams has told investigators that he believed she attended in her official capacity, and he saw her presence as a sign of the interest the McDonnells had taken in the project, according to two people familiar with his account.

But the governor’s spokesman and the first lady’s attorney said that neither directed Sutherland to attend the seminar or even knew at the time that she had taken part.

“Whatever Ms. Sutherland may have said or done on that trip with Mr. Williams was in her personal capacity, and not as a representative of the Governor’s office,” Miyares said in the statement, indicating that “at about that time” Sutherland was attempting to position herself to leave the governor’s office and get a consulting contract from Williams.

Clore declined to comment. Ted Bruns, an attorney for Sutherland, said he found the governor’s account “curious” but declined to elaborate.

Since leaving her government job in October 2011, Sutherland has done no work for Williams or his companies, Bruns said.

Ladenson did not respond to a request for comment.

Correspondence on funding

In a separate e-mail exchange in November 2011, an administrator at the University of Virginia wrote to a top official at the tobacco commission, asking whether Star had been in touch with the fund.

The official indicated that the university was preparing for a conference call with Star executives to discuss whether U-Va. would submit a grant proposal to the commission on the company’s behalf. The commission does not accept applications from for-profit entities.

In an e-mail, U-Va. associate vice president Phillip Parrish wrote that university officials had been told that the governor’s wife was “gently advocating” for Star. He described that report as “unconfirmed.”

Parrish did not respond to requests for comment. A U-Va. spokesman declined to comment.

In his 2011 e-mail, Parrish wrote that Star had also been corresponding about the issue with Jerry Kilgore, a lawyer who is a former state attorney general and whose brother, Del. Terry G. Kilgore (R-Scott), is chairman of the tobacco commission.

Jerry Kilgore, who is a private attorney in Richmond and continues to represent Williams, declined to comment.

In an interview, Terry Kilgore said he was aware of one inquiry from Star to tobacco commission staff about the possibility of a grant but that neither the company nor U-Va. ever filed an application.

He said he never spoke to the governor or anyone acting on behalf of the company, including his brother, about the idea, and he was not aware of any conversations between the governor or his staff and the commission.

McDonnell and his wife both attended the mansion luncheon that marked Star’s introduction of Anatabloc, where the company formally awarded preliminary planning dollars to U-Va. and VCU scientists.

In the months that followed, the e-mails show that the scientists grew increasingly anxious about the fate of the tobacco commission money that was to fund the larger clinical studies for which they were supposed to be planning.

Several times, they e-mailed Rock Creek Pharmaceuticals, the Star subsidiary that makes Anatabloc and had awarded the planning dollars, to inquire about the status of the project.

The e-mails show that on at least four occasions, the company’s research director responded by informing VCU officials that the company was working with state officials to try to get the project funded.

“This is a matter that our counsel is working out with the universities that are involved, including UVA and VCU, as well as with government officials in VA,” Ryan Lanier wrote in September 2011.

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