RICHMOND — A sobbing Jonnie R. Williams Sr. phoned the chairman of his company’s board shortly after the FBI and state police first knocked on his door in January 2013, asking him about his relationship with then-Gov. Robert F. McDonnell (R) and his wife, Maureen.
Williams confessed to Paul Perito, a Harvard-educated lawyer and former federal prosecutor, that he had given gifts and made large loans to the McDonnells, something Perito told jurors that Williams had kept hidden during his nearly two years of intense contact with the first couple.
“It’s one of the most egregious errors of judgment. It’s taking hubris to a whole new level,” Perito said he told his longtime friend.
Prosecutors focused on secrecy Friday in the McDonnells’ corruption trial, showing that Williams kept his own company, Star Scientific, in the dark about the items he gave the McDonnells and also trying to prove that the McDonnells took steps to hide their financial ties to the businessman.
The second week of a trial estimated to last five weeks wrapped up amid national attention, drawn in part to the drama of a live-action soap opera. As prosecutors have trotted out gift after luxury gift provided by Williams, attorneys for the McDonnells have tried to fight back with a defense premised on a broken marriage and a mercurial first lady. The couple, the defense contends, were barely communicating, let alone conspiring to commit a crime.
The former first couple stand accused of trading the governor’s office for more than $150,000 in gifts, vacations and loans from Williams. To win a conviction, prosecutors must show that the McDonnells were engaged in a corrupt bargain with Williams. The prosecution is allowed to use evidence the couple worked to conceal the arrangement to make their case.
Perito’s testimony suggests that Williams, at least, believed he had an improper relationship with the first couple — something Williams told Perito, in that tearful conversation, that he had hidden from the chairman he considered “a prosecutor at heart.”
The defense suggested that Williams was upset over possible securities violations that were unrelated to the McDonnells.
Perito, a Washington lawyer, testified that he did manage to kill a proposal from Maureen McDonnell that she be placed on the Star board in 2012. Williams, he told jurors, reported back that the first lady was angry with the decision.
With witness testimony and exhibits shown to jurors Friday, prosecutors set out to prove that Maureen McDonnell tried to dodge state reporting disclosure law by twice unloading thousands of shares of Star stock at the end of a calendar year.
And a former top staffer to the governor testified that the first lady was “hoarding” gifts in the executive mansion so they would not have to be reported on her husband’s annual financial report.
John Piscitelli, a stock broker who has been friends with the McDonnells for more than 25 years and is the godfather of one of their children, agreed that Maureen McDonnell was emphatic that he help her get more than 6,660 shares of Star stock she purchased in 2011 out of her name before the end of the calendar year.
Virginia law requires elected officials to disclose whether they or any members of their family hold stock worth $10,000 or more in any single company. The first lady’s holdings at that time exceeded $15,000 in value.
Under her direction, Piscitelli testified, he sold her shares at a loss on Dec. 20, 2011. Again under her instruction, he said, he repurchased the shares on Jan. 20, 2012. By that time, the governor had filed his financial disclosure for the previous year.
Pressed by Assistant U.S. Attorney Michael Dry, Piscitelli acknowledged that Maureen McDonnell had specifically mentioned reporting requirements in conveying her wishes.
“As you sit here today, did the request make you uncomfortable?” Dry asked of conversations about how Maureen McDonnell could get the stock out of her name.
“Yes,” Piscitelli conceded.
In December of the following year, Piscitelli said, Maureen McDonnell was again eager to get her Star stock out of her name before the year ended and decided to press ahead with a long-stated desire to gift some to her children. That got the value of her stock below $10,000 before the year ended.
In between those dates, Piscitelli also discussed a possible loan from Williams with the McDonnells. He testified that he held a conference call with the governor and first lady in which the two said they were considering attempting to borrow money against Star stock that was owned by Williams.
Williams has testified that he and the governor discussed that arrangement during a one-on-one meeting in the governor’s office suite, during which the two agreed it would benefit them both to keep the loan quiet.
Piscitelli said the couple told him he should open an account to handle Williams’s stock but it should be in Maureen McDonnell’s name only, he said.
He said he found the arrangement “a bit puzzling.”
He opened the account but heard no more about the deal. When he asked Maureen McDonnell whether it was still on, she replied that the couple had “decided to go another way.”
“Were you relieved?” Dry asked.
“Relieved is a good word,” Piscitelli said.
In the end, Williams wrote a $50,000 check directly to a small real estate company that Robert McDonnell owned with a sister, which the former governor has said did not need to be disclosed.
Defense attorneys have told jurors that the McDonnells marriage was in shambles in 2011 and 2012 and they were barely speaking, which could lend credibility to the idea that the governor was unaware of his wife’s stock trades.
Piscitelli, who attended church with the McDonnells in Virginia Beach in the late 1980s, threw some doubt on that claim when he said he attended a joint 60th birthday party hosted by the couple in June.
At the conclusion of the party, he said, he saw the two dancing “in a loving way.” But he also said the two spent most of the party apart and danced after their daughter issued a surprise public challenge for them to do so.
Lynh Bui contributed to this report.