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McDonnell's economic disclosures under investigation

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Posted: Wednesday, May 22, 2013 11:18 pm | Updated: 4:00 pm, Thu May 30, 2013.

At the direction of Attorney General Ken Cuccinelli, Richmond's top prosecutor has been investigating Gov. Bob McDonnell's statements of economic interest since November for possible violations of disclosure laws.

Cuccinelli sent a letter to Richmond Commonwealth's Attorney Michael N. Herring, appointing him to review McDonnell's statements. By law, elected officials are required to account for all gifts received in excess of $50.

"I did what I have consistently tried to do as attorney general, which is to uphold the law impartially," Cuccinelli said in a statement Wednesday.

Cuccinelli said he "made a referral" to Herring "to conduct an investigation into possible violations of financial disclosure provisions, as information came to my attention that triggered my requirement to look into the matter."

He added: "My referral to Mr. Herring was not a conclusion that any violation occurred. Under the law, that conclusion will be made by Mr. Herring alone."

The investigation into McDonnell's statements of economic interest follows weeks of disclosures surrounding the governor and first lady Maureen McDonnell's relationship with Jonnie Williams Sr., the CEO of Henrico-based dietary supplement maker Star Scientific.

It also underscores the difficult nature of the relationship between two of Virginia's top elected officials.

Cuccinelli, a Republican, is running for governor. McDonnell, the titular head of the state Republican Party, who has been mentioned as a possible presidential candidate in 2016, is supporting the attorney general and helping to raise money for him.

In response to a Freedom of Information Act request for correspondence between the attorney general's office and Richmond Commonwealth's Attorney Office, which The Richmond Times-Dispatch filed last week, Herring says: "In that letter, the attorney general designated me, pursuant to Virginia Code Section 2.2-3126(A)(2), to review certain Statements of Economic Interest filed by the governor."

That section of the Virginia Code outlines the responsibility of the attorney general as the sole official charged with the initial enforcement function with regard to disclosures required by certain state officers and employees.

It states: "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 any provision of this chapter, he shall designate an attorney for the commonwealth who shall have complete and independent discretion in the prosecution of such officer or employee."

In his response to the Times-Dispatch FOIA request, Herring says he will not provide the letter Cuccinelli sent requesting the investigation "because I believe it constitutes 'criminal investigative file' material."

Herring adds: "For future reference, I will not disclose the content, substance or results of my review until it is complete, and only then through due process and in accordance with the law."

Tucker Martin, a spokesman for McDonnell, said, "We are aware of the review and look forward to working with them as this process moves forward."

McDonnell's lawyer, former Attorney General Anthony F. Troy, had no immediate comment.

Last month, Cuccinelli asked Herring to investigate his own statements of economic interest after the attorney general admitted he had omitted some gifts from his financial disclosure forms for the previous four years, including roughly $5,000 in gifts from Williams that included a catered Thanksgiving dinner and vacation stay at Williams' Smith Mountain lake home.

Cuccinelli said April 26 that he had amended his forms to reflect the additional gifts, which raised the total he had received from Williams and Star Scientific since 2009 to more than $18,000.

A spokesman for the Democratic Party of Virginia said Wednesday Herring's investigation of McDonnell calls attention to Cuccinelli's own lapses on financial disclosure.

"It is inexcusable for Cuccinelli to use the fact that it was his responsibility to investigate his own financial disclosure statements to avoid an investigation for six months after he began the investigation into the governor's statements," Brian Coy said.

Brian Gottstein, a spokesman for the attorney general's office, said Cuccinelli had nothing to report to Herring until Cuccinelli reviewed his own records in April.

Herring's probe of McDonnell also unfolds against the backdrop of a pending felony embezzlement case against Todd Schneider, chef at the Executive Mansion from 2010 to 2012.

In early 2012, Schneider told FBI, Virginia State Police and the attorney general's office that he had evidence of "wrongdoing" and "abuse" by the McDonnells in their use of state resources. He also provided information about their relationship with Williams.

Williams and his company have donated more than $100,000 to McDonnell and his political action committee, Opportunity Virginia, in cash contributions and airfare on Williams' private jet. He has also showered the first family with thousands of dollars worth of gifts — including use of a Smith Mountain Lake vacation home and a $15,000 check to cover the catering at the June 2011 Executive Mansion wedding of McDonnell's daughter, Cailin.

The governor has refused to say whether he or his family has received any gifts from Williams or others that he has not included in his disclosure statements.

There is no criminal penalty for accidentally failing to disclose a gift; knowingly failing to disclose a gift is considered a misdemeanor.

Authorities are also probing whether McDonnell provided Williams or Star any special consideration in his role as governor in exchange for the gifts Williams provided to the first family.

McDonnell has said Williams and his wife are personal friends, but the governor has steadfastly denied that he or his administration gave Star Scientific and Williams any special treatment.

In his own letter to Herring requesting an investigation of his filings, Cuccinelli said: "I have discovered some shortcomings in my own disclosures.

"None of my initial filings were knowingly wrong; rather, I did not give adequate attention to some of the details in the statements I filed on those occasions."

Cuccinelli amended his disclosure forms and divested his holding of Star Scientific stock, which he had also failed to initially disclose, claiming that he did not realize his holdings in the company exceeded the $10,000 threshold for reporting of investments required by law.

Herring's investigation of Cuccinelli's own economic interest forms continues. The attorney general's involvement with Williams has already forced him to recuse his office from handling a lawsuit filed by Star Scientific against the state over a long-disputed $700,000 tax assessment in Mecklenburg County.

Citing conflicts with potential witnesses in the case that it technically represents at state employees, Cuccinelli's office was also allowed by Richmond Circuit Court Judge Margaret P. Spencer to withdraw from its prosecution of Schneider, who goes on trial Oct. 15, three weeks before Election Day.

Schneider's attorneys have argued that Cuccinelli's relationship with Williams and McDonnell during the time when Schneider was providing information to authorities regarding mansion operations and the governor constitute grounds for dismissal of the charges. Arguments on that motion will be heard July 8.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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