Gov. McDonnell and the Supremes: Corruption by any other name is still corruption
Friday, June 17, 2016 at 9:18AM
Claudia Dumas, Shruti Shah, and Jacqui de Gramont in Bob McDonnell, Gift Giving, Jonnie R Williams Sr, Virginia

The Supreme Court of the United States is currently finalizing its review of former Virginia Governor Bob McDonnell’s 2015 conviction, with the Court’s opinion expected at the end of June.

This is a landmark case that demonstrates the fine lines between influence buying, political elites and the power of access. In our opinion, the Court of Appeals for the Fourth Circuit, which affirmed the conviction of McDonnell, got it right. Here’s why.

Former Governor McDonnell and his wife accepted lavish gifts, loans, and expensive vacations from Virginia businessman Jonnie R. Williams of an estimated value of $177,000 -- more than the Governor’s annual salary of $175,000. At the time, Williams wanted the Governor’s assistance in securing state university testing of Anatabloc, a dietary supplement that his company Star Scientific Inc. had developed.

McDonnell helped out. He gave Williams access to key decision-makers involved in drug testing at universities by hosting an event at the governor’s mansion for which Williams supplied names for the guest list. Separately, in a meeting with the Secretary of Administration and the Director of the Department of Human Resources Management in which state employee health insurance plans were discussed, the governor mentioned he thought Anatabloc would be good for state employees.

McDonnell’s lawyers are arguing that these events are something that politicians do all the time for their constituents. We beg to differ. Those in positions of power are not supposed to trade their influence for personal gain.

Let’s see what McDonnell and his family gained from Williams. Among other lavish gifts, there was a $20,000 shopping spree, including a leather coat from Oscar de la Renta, a raincoat from Louis Vuitton, and a dress from Bergdorf Goodman; a personal loan of $50,000 and another of $15,000 to pay the caterers of their daughter’s wedding; a free vacation at a multi-million dollar home at Smith Mountain Lake in Virginia; a Rolex watch; and golf outings.

Governor McDonnell did not disclose these gifts or loans on a timely basis and, astonishingly, Virginia State law did not prohibit him from accepting those gifts.

Virginia’s ethics rules were among the most lax in the country. Robust laws restricting the size and making transparent the acceptance of gifts by elected officials are an essential component of combating corruption by elected officials, and are part of TI-USA’s recommendations to further integrity by elected officials. In fact, prompted by this case, Virginia’s General Assembly has made at least two attempts at ethics reform. Effective this January, Virginia has a new law on gifts, lobbying and pay-to-play compliance, which puts a $100 cap on gifts to public officials from lobbyists and from people with state business. Virginia also now requires electronic filing of disclosure forms with the Virginia Conflicts of Interest and Ethics Advisory Council.  

We think this legislation still has several deficiencies -- notably gifts from “personal friends” are exempt from the $100 cap, the exclusion from the cap of travel, food, or beverages for widely attended meetings, and the absence of rules on campaign accounts which are used by some lawmakers for personal expenses.

The question before the Supreme Court is whether McDonnell took any official action for Williams in a quid pro quo arrangement or whether, as his attorney puts it, all the governor did was provide access to decision makers. The Governor’s attorneys claim mere ingratiation and access are not corruption.

The Transparency International definition of corruption is the use of entrusted power for personal gain.

Governors have significant authority and influence over the operations of the state executive branch and they do not have to give explicit orders to pressure others to take specific actions. A governor also has authority over the state budget and appointments of influential leaders in state institutions such as state university systems. This would not have been lost on Williams who wanted the Governor to use his position for his advantage. As such, a governor’s promoting a product with state university employees at an event hosted by him in the Governor’s mansion, among other actions on his part, has an element of pressure and should be deemed “official action.”

Based on the above, we are of the view that these acts by the Governor amount to corruption. In deciding whether McDonnell used the power of his office to help Williams we hope the Court will consider the true victims in this case: the people of Virginia who deserve ethical and honest elected officials who prioritize the interest of their constituents over their own self- interest.

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Claudia Dumas is the President and CEO of Transparency International-USA. She has more than 25 years of public, private, and not-for-profit experience in anti-corruption, rule of law, and international finance law. She can be contacted here.

Shruti Shah is a contributing editor of the FCPA Blog. She's Vice President of Programs and Operations at Transparency International-USA. She can be contacted here.

Jacqueline de Gramont is the Policy Director for the private sector integrity portfolio at Transparency International-USA. She can be contacted here.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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