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« Corruption isn't just 'over there' | Main | The answer to corrupt competition »
Tuesday
Jul162013

Virginia’s Shamefully Inadequate Ethics Laws, Part I: 145,000 Reasons Why Bob McDonnell’s Political Career May Be Over

Virginia Governor Bob McDonnell and his wife Maureen (photo courtesy of www.governor.virginia.gov)In 2011, Phil Hamilton, a state delegate from Newport News, Virginia, was sentenced to 9-1/2 years in federal prison for bribery and extortion.

The conviction was based on Hamilton’s solicitation of a paid position as a director of a teaching training center at Old Dominion University that he helped to create with taxpayer dollars. After he was convicted, Virginia politicians took the opportunity to praise Virginia’s intolerance for corruption and purported reputation as a beacon of ethical government.

At the time, Virginia Governor Bob McDonnell also commended the prosecution and Virginia’s pristine reputation for honest government, stating: “Virginia has long been a state marked by honest, transparent and ethical governing by both parties. Today's judgment is a reminder that no one is above the law." 

One can’t help but marvel at the irony of that statement now that the public is aware of McDonnell’s penchant for accepting luxury items and trips from donors. Indeed, the public is now aware that McDonnell and his family have accepted at least $145,000 in gifts and payments from Jonnie R. Williams Sr., one of McDonnell’s political donors and the chief executive of Star Scientific. 

To date, the alleged list of gifts and payments from Star Scientific (and Williams) to McDonnell (or McDonnell’s family members) is staggering. According to the Washington Post, the list includes (but is certainly not limited to) the following:

  • Star Scientific contributed more than $28,500 in air travel to McDonnell's 2009 campaign, and more than $80,000 in air travel to McDonnell's political action committee.
  • Williams took McDonnell’s wife, Maureen, on a $15,000 clothing shopping trip in New York City.
  • Willams wrote a $15,000 check to pay for food at the wedding of McDonnell's daughter, Cailin.
  • Williams provided a $50,000 check to Maureen McDonnell. McDonnell claims this was a loan.
  • The McDonnell family vacationed in Williams's Smith Mountain Lake vacation home and borrowed Williams's Ferrari to drive back to Richmond.
  • Williams purchased a $6,500 men's Rolex for Maureen McDonnell. The Rolex was engraved with the words "71st Governor of Virginia." The Governor then wore the watch during an interview with the Richmond Times-Dispatch and told the paper it was a Christmas gift from his wife.
  • Williams wrote $70,000 in checks to MoBo Real Estate Partners, a corporation owned by McDonnell and his sister. The McDonnells claim the checks were "loans" to the corporation.
  • Williams gave McDonnell's daughter, Jeanine, a check for $10,000 as a wedding present. 

State investigators are reviewing the transactions to determine whether the gifts and payments violate Virginia’s gift and disclosure laws. As I will discuss in Part II of this series, Virginia’s ethics laws are shockingly lax (especially when compared to the ethics laws of the federal government and most other states in the country). 

In addition, the FBI has been investigating allegations that McDonnell used his position to benefit Williams and Star Scientific in exchange for all of the gifts and payments. A federal grand jury is also considering allegations that:

  • McDonnell's wife flew to Florida to promote a Star Scientific product at a meeting with doctors and investors.
  • McDonnell's wife arranged a meeting between Williams and a top official from the Virginia Department of Health and Human Services to pitch a Star Scientific product.    
  • Star Scientific used the Virginia governor’s mansion to host a luncheon, attended by the Governor, to market a Star Scientific product (despite concerns voiced by McDonnell’s aides that his participation in the event might be inappropriate).   

There are now numerous calls for McDonnell to resign from office. If additional egregious facts in this case become public, it is likely that these calls will grow louder. While the facts of this particular case are unique and worthy of discussion, a lengthier discussion about Virginia’s ethics laws (or lack thereof) is warranted -- a discussion we will have in Part II of this series. 

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Jessica Tillipman is a Senior Editor of the FCPA Blog. She's the Assistant Dean for Field Placement and Professorial Lecturer in Law at The George Washington University Law School, where she teaches an Anti-Corruption seminar. She also advises companies on FCPA compliance and government procurement-related issues. She can be contacted here.