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SoVaNow.com / April 03, 2013It’s an iron rule of journalism that the quickest way to lose a reader is to dive headlong into murky legal entanglements, potential conflicts of interest and other quasi-lawyerly subjects when writing about … pretty much all that.
On the other hand, you can count on people sitting up and taking notice when, just to offer an example, a high-rolling businessman whose company is under federal investigation is reported to have forked over $15,000 to provide jumbo shrimp, bruschetta and stuffed free-range chicken at the wedding reception of the governor’s daughter because, well, go figure.
And so it was that The Washington Post opened its report this week on a potentially shady relationship between a bigfoot biznessman and a pliant politician — by harkening back to that lovely day at the Governor’s Mansion when Virginia Gov. Bob McDonnell’s daughter was betrothed to her beloved in the presence of family, friends and one heck of a catered spread.
Bought, it turns out, by a guy who has proven adept at spreading his losses.
The Post article, published Sunday (http://www.washingtonpost.com), is of particular interest locally because it involves Star Scientific, a company that once offered the promise of reviving Southside’s tobacco economy from its manufacturing base in Chase City. The high-roller in question is Jonnie Williams, Star’s chief executive, well-known hereabouts as the man behind the non-existent business miracle. Star has seen better days — the company is losing millions each year, and federal prosecutors are investigating alleged stock improprieties — but it’s still alive, unlike the Chase City tobacco operation, which was officially jettisoned last year once the company decided to focus exclusively on selling dietary supplements.
Williams, aside from being quite the salesman, to gather from press accounts, is also a prominent Friend of Bob who dropped $15,000 on Caitlin McDonnell’s special day, although the wedding gift went unreported until The Post got the goods for its story (“Va. Gov. McDonnell on two-way street with chief executive of struggling company,” by reporters Rosalind S. Helderman and Laura Vozzella).
The Post report exposes a slew of favors back and forth between Williams and McDonnell — rides on Williams’ private jet for the Guv, a personal testimonial by First Lady Maureen McDonnell at a Florida seminar highlighting Star Scientific’s flagship product, a tobacco-based dietary supplement that may or may not have actual medicinal benefits — as well as a spotty record of disclosure by the governor’s office about the relationship. Is a friendly urge by Williams to play sugar (shrimp?) daddy all there is to this story? Stay tuned.
The Star inquisition is trouble for more than just McDonnell. A week earlier, The Post revealed that Attorney General and GOP gubernatorial candidate Ken Cuccinelli also has a potential conflict of interest in his dealings with Star. The company has balked at paying up to $1.7 million in tax liabilities on tobacco barns in Mecklenburg and has sued Virginia to get out from under the bill. Cuccinelli’s dilemma? He’s the state’s top lawyer, with responsibility for overseeing the response to the Star lawsuit. He also is the beneficiary of Williams’ largesse, having been gifted use of his lake home and boat and, somewhat oddly, a box of “food supplement” valued at $6,711. Six grand in food supplements? (The gift reportedly consisted of Anatabloc). If this were whale oil, Cuccinelli would’ve just swallowed Moby Dick.
In addition to gifts, The Post found that Cuccinelli has a further problem: he failed to disclose stock ownership in Star exceeding $10,000, as required by Virginia law, at the same time the AG’s office has been defending the state in the slow-moving tax proceeding with the company. The AG’s office says the failure to disclose was an honest oversight, triggered by a rise in the stock price that pushed the value of Cuccinelli’s holdings above the $10,000 reporting threshold. What has not been answered satisfactorily is why Cuccinelli made an additional stock purchase after his office took up the lawsuit with Star.
Of course, these sorts of deep-in-the-weeds speculations lead us away from the juicier revelations of the Star-McDonnell-Cuccinelli saga, such as First Lady Maureen McDonnell’s visit to Florida to attend a conference on anatabine, a tobacco derivative and key ingredient in Anatabloc, Star Scientific’s flagship product. Anatabine, an anti-inflammatory, may help people afflicted by Alzheimer’s and other conditions believed related to inflammation, although the science behind the claims is tenuous. This uncertainty apparently did nothing to dampen Mrs. McDonnell’s enthusiasm for Anatabloc, which she touted to Star investors only three days before guests at her daughter’s wedding sampled the gustatory delights purchased by the company CEO.
According to attendees at the event, Maureen McDonnell, who is a former Washington Redskins cheerleader and marketer of nutritional products, said she was interested in Star’s Anatabloc because the product holds promise in reining in the high costs of health care. It matters not, apparently, that Star flies under the radar of the FDA, which does not regulate nutritional supplements, nor that the supplement industry has a long record of humping products with exaggerated benefits. If you’re wondering how the wife of a Republican governor and prominent critic of Obamacare could peddle such transparent hokum and not break out in laughter, well, you’re not alone.
Truth be told, Star Scientific has attracted the blandishments of Virginia politicians ever since its early days of Star Tobacco, which supposedly had invented a process for making a safer cigarette that would take the world by storm. (Remember nitrosamine-free tobacco? According to company lore, Jonnie Williams figured out a way to cook the golden leaf, just so, to make it less lethal. His secret? Sticking it in a microwave, an innovation that had eluded millions of dollars of R&D by Star’s Big Tobacco competition.) For a reminder of all that Virginia has done for Star, one only need go back to 2002 to the days when Mark Warner was governor and Star’s Chase City operation received upwards of a million dollars in grants and tax breaks to create 315 projected jobs in town. “Projected,” by the way, translates today as “zero.”
And what of the future? It may be that Williams’ favors to McDonnell and Cuccinelli don’t amount to a hill of beans, and neither one of Virginia’s top Republicans has done anything wrong other than make the mistake of getting too cozy with a benefactor beset by business and legal troubles (which, especially in the latter instance, are far from conclusive at this point). But there’s enough that smells fishy about this story that you can rest assured it’s not going away anytime soon. Especially not with Cuccinelli running for governor and McDonnell positioning himself for life after the Governor’s Mansion.
A small, probably insignificant twist to the tale (although at this point, who really knows?): A former principal in Star is none other than Mecklenburg supervisor Jim Jennings, who has come under indictment for allegedly violating election law in connection with his 2011 re-election campaign to the Board of Supervisors. Court documents indicate Jennings improperly swore off on petition signatures submitted with his candidate’s filing. In response, not a small number of people have wondered why such a seemingly minor infraction would incur a criminal charge. It is no secret that Jennings is a stalwart Republican rumored to have political aspirations beyond county government. A criminal indictment, even if it ultimately leads to nothing, hardly aids his cause. Yet think what you will about the seeming seriousness of the allegations, the criminal inquiry into the conduct of a public official had to be green-lighted from above — by none other than Virginia Attorney General and Star investor, Ken Cuccinelli.
Assuming for a minute that everyone is guilty here, is Jennings’ failure to come clean on his petition signatures any worse than Cuccinelli’s failure to report his stock portfolio?
Pass the shrimp.
(Editor's note: The print version of this column in The Mecklenburg Sun attributes a federal investigation into alleged stock improprieties at Star to the Securities and Exchange Commission. The probe is being handled by the U.S. District Attorney's Office for the Eastern Division of Virginia).