Virginia Gov. Robert F. McDonnell was aware of gifts and financial help provided by a wealthy Richmond area businessman during the same months the governor and his wife took steps to help his company, according to people familiar with documents and interviews gathered by federal investigators.
For example, McDonnell (R) was present at a charity auction in 2011 when the chief executive of Star Scientific, which makes a dietary supplement, successfully bid on a fashion tour of New York for the governor’s wife in front of a crowd of onlookers, witnesses said.
Separately, the executive, Jonnie R. Williams Sr., flew the governor and his wife on a weekend trip to Cape Cod, in Massachusetts, over Labor Day weekend last year. And Williams repeatedly allowed the governor, his sons and staff to play golf and buy golf gear at elite Richmond area country clubs, running up more than $7,000 on Williams’s tab, according to the documents turned over to authorities.
Each of these newly public examples of Williams’s generosity came on top of more than $150,000 worth of valuables and money The Washington Post has previously reported — gifts that Williams provided to the governor’s family over more than 18 months in 2011 and 2012.
People familiar with accounts that Williams and others have provided to investigators, as well as witnesses interviewed by The Post, say each of those gifts came with the governor’s knowledge — contrasting with an assertion by McDonnell’s attorneys that he was in the dark about the extent of the gifts Williams bestowed on his family.
Attorneys for the governor and first lady Maureen McDonnell argued to federal prosecutors two weeks ago that the governor should not be charged with any crimes, in part because of this ignorance, people familiar with the sessions said.
The governor could not have been influenced to improperly help the Star Scientific executive, they asserted, based on gifts he didn’t know about at the time. The couple’s attorneys told prosecutors that Maureen McDonnell worked to hide Williams’s gifts because she feared her husband’s disapproval, the people said.
What had been an unusually fast-paced investigation has hit some delays as prosecutors consider the evidence, including the governor’s account and new information, several people familiar with the probe say.
In recent weeks, the governor’s legal team lost a secret court battle to withhold from prosecutors internal office communications, those people said. McDonnell’s attorneys said the papers were protected by attorney-client privilege because they concerned communications between the governor and some staff members who are lawyers.
Prosecutors have now asked the governor’s and first lady’s attorneys to return for a second round of discussions no later than the week of Sept. 15, during which prosecutors are expected to lay out the key elements of the case, said a person familiar with the schedule.
Prosecutors could decide whether to file charges after the meetings, the person said. But the timing is somewhat tricky, because voters go to the polls Nov. 5 to select McDonnell’s successor, and prosecutors may want to avoid a perception that their work is influencing the results, people familiar with the investigation said.
A spokesman for the U.S. attorney’s office declined to comment.
Rich Galen, a spokesman for the governor’s legal team, said the “evidence is clear” that McDonnell complied with state disclosure laws, which require that elected officials report all gifts worth at least $50 but do not require that gifts to immediate family members be made public.
McDonnell has disclosed receiving $9,650 in gifts from Williams and Star Scientific, including private plane trips and a summer lake-house vacation.
On Friday, Galen said that Williams’s version of events cannot be trusted, and he stressed that neither Williams nor his company received any state grants, loans, contracts or similar tangible state benefits. Bill Burck, an attorney for Maureen McDonnell, said it is not surprising that the first couple socialized with Williams, since they were all friends.
Galen noted that a Star spokeswoman has previously said that the company never sought any special benefits from the state.
Williams and other Star Scientific officials have provided investigators with extensive details of gifts Williams gave to the governor and his relatives, and in some cases, their accounts differ from the governor’s about McDonnell’s role and knowledge, according to people familiar with the evidence.
Those accounts show that Williams arranged to be reimbursed by his company for many of the gifts, a sign that he viewed the gifts as a business expense that would pay dividends to the company.
The company has told investigators that corporate officials initially were not aware that Williams was tapping company accounts to pay for gifts to the McDonnells, other than when Williams formally sought reimbursement for plane trips he provided to McDonnell for campaign events, according to people familiar with their accounts.
Jerry Kilgore, an attorney for Williams, declined to comment, as did Abbe Lowell, Star’s attorney.
People familiar with the probe say Williams and the company have turned over records showing that he paid for golf outings for the governor at elite country clubs in the Richmond area a half-dozen times between May and September 2011. The records are also said to indicate that Star reimbursed Williams that year for $7,500 in greens fees, golf equipment and apparel for the governor, his twin college-aged sons and members of his staff.
Star, likewise, underwrote a trip Williams arranged for the governor and first lady to Cape Cod a year ago, paying for private plane travel and a stay at a seaside inn.
The governor’s disclosure form appears to report the gift, noting that Star paid nearly $7,400 for flights between Richmond and Massachusetts, lodgings and event expenses in 2012.
The disclosure form doesn’t note these details: that the first couple went together to the Cape, joined by Williams, Williams’s wife and Johns Hopkins University doctor Paul Ladenson, who has served as a top consultant to Star. The weekend was part of a campaign by Williams to sell the governor and other top state officials on his company’s new dietary supplement, Anatabloc, the people said.
Ladenson, who also attended a luncheon hosted by the first lady at the governor’s mansion to mark the launch of Anatabloc in 2011, did not respond to requests for comment.
Virginia State Police records show taxpayers paid $2,967.83 for the governor’s protective detail to join him for the five-day stay at the Chatham Bars Inn, a hotel once described by Boston Magazine as a likely haunt of a modern-day Jay Gatsby.
That same Labor Day weekend, Williams also used personal credit card reward points to pay for McDonnell’s then-24-year-old daughter, Rachel, and a friend to fly to Florida for a vacation, according to people familiar with his account. The trip was described as a graduate school graduation present.
Another example of Williams’s gift-giving submitted to investigators involved a September 2011 fundraiser in Richmond for the American Cancer Society, which Williams attended as a guest of the first lady. The event, “Cure By Design,” featured a fashion show with cancer survivors as models and an auction of clothing and other fashion-related items.
Williams arranged for a male model with whom he is friends to travel to Richmond from New York for the event and escort Maureen McDonnell down the catwalk, recalled designer Alex Garfield, who served as a celebrity auctioneer at the event. Pictures on the charity’s Facebook page show the governor and first lady posing with Williams, the model and Garfield.
Garfield recalled that as the auction began, the governor appeared on the stage to take part. In front of a large audience, Williams agreed to pay $15,000, the winning bid, to give the first lady one of the evening’s most prized items: a weekend in New York and a tour of the fashion district conducted by Garfield.
“The governor was standing on the stage next to me,” Garfield said. “We were watching everybody. If he knew [Williams], he knew it.”
Although Williams paid for the trip, Garfield indicated that the first lady hadn’t claimed her prize.
McDonnell has said he once considered Williams — whom he met shortly before his 2009 campaign for governor — a “family friend.”
“The McDonnells and Williams families were friends. They socialized together because of their friendship. The notion that there was anything else to it is just plain wrong,” Burck, the attorney for Maureen McDonnell, said Friday.
Since news emerged that Williams is cooperating with prosecutors, the governor’s spokesman has described the executive as someone long in trouble with government entities. On Friday, Galen said Williams needs to “appear to be cooperating” to avoid his own legal troubles.
Galen called Williams “hardly a credible source” and said evidence will show that Williams repeatedly “falsified his expense accounts with respect to his claimed dealings with the Governor and Mrs. McDonnell.”
In an e-mail exchange with The Post, Galen did not address the most recently discovered gifts from Williams to the governor and his family.
McDonnell apologized last month for breaching the public’s trust in his interactions with Williams. But he has also said publicly that he was not aware of all of Williams’s gifts.
For example, attorneys for the first couple told prosecutors in their August meeting that Maureen McDonnell did not initially tell her husband that Williams took her on a $15,000 shopping trip in New York in spring 2011. Nor did she tell him that Williams was the source of a $6,500 Rolex watch, inscribed with the words “71st Governor of Virginia,” which she gave the governor for Christmas that year, the McDonnells’ attorneys said.
Many of McDonnell’s loyalists have long maintained quietly that the governor was a victim of his wife’s excesses and was so busy with state business that he had little time to monitor her behavior.
As a legal matter, ignorance could be helpful to the governor if it helps him convince prosecutors that he was not taking action in exchange for Williams’s gifts and that his wife was not working on Williams’s behalf when she used her role and state offices to help the company.
Attorneys for the governor and first lady maintain that he also was initially unaware that she on several occasions bought stock in Star Scientific, purchases that gave his family a financial stake in the company as she was simultaneously promoting the company at Star events across the country.
They have said publicly that the governor’s actions to help the company were limited, were not out of the ordinary and were not undertaken as part of any exchange with Williams.
Those actions are even less problematic, they have argued to prosecutors, when paired with how little he knew about his wife’s actions.
Prosecutors are now weighing that claim, along with Star corporate records and other evidence they have gathered over a months-long investigation. People familiar with Williams’s account have said that the executive has told prosecutors that he and the governor had discussed ways to help Star.
The governor’s allies have bemoaned leaks of allegations that have surfaced in the probe, and Galen said in a written statement that the leaks were intended to “harm the reputation of Governor McDonnell and his family.”
“It is important for citizens to take much of what Mr. Williams says with a grain of salt,” Galen said.