But Star Scientific, a former tobacco company that now sells dietary supplements, was required to repay the first installment, a $300,000 grant from the Governor’s Opportunity Fund, after failing to meet investment and job goals outlined in its agreement with the state, said Suzanne West, a spokeswoman for the Virginia Economic Development Partnership. She said all of the money was returned by 2008.
An additional $657,000 in other incentive and worker-training money was not provided to the company, for the same reason, West and another state official said.
Three years after the last of the money was returned, McDonnell and his wife, Maureen, worked to promote the company, which marked the launch of a dietary supplement in 2011 with an event at the Executive Mansion in Richmond.
Through a spokesman, McDonnell (R) has described efforts that he and his wife made on behalf of the company as part of a broad campaign to promote state businesses. But the spokesman acknowledged recently that the McDonnells were not aware of the company’s record with state efforts to boost its business.
The problems with Star began more than a decade ago. Project notes maintained by one state official detailed difficulties the official had getting meetings with company officials in 2002 and 2003 to discuss a $157,500 worker-training grant.
According to the notes, the official recommended revoking the offer after learning that a project coordinator for Star had “left the company to be incarcerated for some scandal that occurred outside this company.”
The project coordinator, Lloyd A. Jones, was a part-time consultant to the company who served on its board of directors for eight months and who resigned after he informed Star that he was the target of a federal investigation. In 2003, he pleaded guilty to accepting a bribe in his previous job as an official with the U.S. Department of Agriculture.
In an interview, Jones said he did not recall the details of the project but did not believe that its troubles stemmed from his unrelated legal difficulties. He said Star was a “solid” company with “great potential.”
“We were not aware of this decade-old grant,” Jeff Caldwell, a McDonnell spokesman, said in a statement.
Caldwell said the 2011 launch event for the dietary supplement, an anti-inflammatory product called Anatabloc, was organized by Maureen McDonnell’s office and paid for by the governor’s political action committee.
Caldwell described the luncheon as a “small event” that the governor attended briefly to greet guests and acknowledge Star Scientific’s presentation of research money to two public medical schools.