News Column

Williams connects dots on McDonnells, says he tried to hide loans

July 31, 2014

By Travis Fain Tfain@dailypress.Com, Daily Press (Newport News, Va.)

July 31--RICHMOND -- The star witness against Bob and Maureen McDonnell detailed his efforts to keep payments to the couple secret Thursday, telling jurors that he knew it was wrong to shell out cash as he pushed for the governor's help launching one of his company's products.

Former Star Scientific CEO Jonnie Williams said time and again that the first couple's credibility was important to him, and that he paid for it. Maureen McDonnell apparently had the most contact with Williams, but Williams testified that he had conversations with the governor, too.

Maureen McDonnell travelled with Williams around the country, pitching doctors in an effort to get them to embrace the product and recommend anatabloc, a Star Scientific supplement, to patients. But Williams also wanted state research hospitals at UVA and VCU to study anatabloc, and he said the governor called one day to check on the status of that project.

The effort had bogged down, Williams said, and he hoped the governor would re-invigorate it.

"(The governor) said -- he called me and he said, 'I'm following up on the situation over at UVA,'" Williams testified today. "And then it shifted to he needed some more money."

The governor needed that money because rental properties he co-owned in Virginia Beach wasn't pulling in enough money to cover the mortgages, Williams said. Williams said he looked for several ways to transfer stock into the governor's name, or at least let him borrow it, wihtout having to disclose the transfer to the Securities and Exchange Commission, or to Star Scientific's shareholders.

"I didn't want anyone to know what I was doing," Williams said. "It may be wrong. I think it's wrong. It could be wrong. It could be violating laws."

The governor said it was fine with him to keep it secret, Williams said, but in the end Williams said he couldn't find a way to use the stock. He wrote checks instead, which he said he now regrets.

He also falsified a disclosure form used to put together Star Scientific's annual reports to share holders. The form specificially asked whether Williams was making any payments to public officials "to recieve favorable treatment."

"I was making payments," Williams said today.

"In exchange for what," Assistant U.S. Attorney Michael Dry asked.

"To help our company," he said.

Williams also testified that he was never friends with the governor, despite Maureen McDonnell telling crowds of doctors that they were long-time friends.

Williams will continue his testimony this afternoon. It's unclear whether his admissions will be enough to convince a jury the McDonnells are guilty of the federal corruption charges against them.

The defense has not yet had a chance to question Williams in court, but the McDonnells' attorneys have said he's lying to get a full immunity deal from the government.

This is a breaking news update, filed during the trial's lunch break. Keep reading for coverage from this morning, and background on the case.

RICHMOND -- The government's star witness against Bob and Maureen McDonnell connected the dots for the jury this morning, saying he never would have gotten a launch party for one of his products without lavishing the former first couple with gifts and loans.

Former Star Scientific CEO Jonnie Williams also testified that the McDonnells were never his friends, and that his generosity was a business decision.

"The McDonnells were not my personal friends," he said. "I thought it was good for our company."

Williams also said it was a mistake to buy an engraved Rolex watch for the governor, which Maureen McDonnell requested after admiring his. He said he tried to keep it a secret.

"I thought it was wrong," Williams said. "It was a bad idea for anyone to know that."

"I shouldn't of had to buy things like that to get the help I needed," he testified. "It was a bad business decision."

Williams will continue his testimony today as the U.S. government tries to prove its corruption case against the former governor and his wife. Attorneys for the McDonnells have accused Williams of being a liar, saying he changed his story a number of times to extract a stronger immunity deal from prosecutors.

They have said Maureen McDonnell developed a crush on Williams, and that the smooth-talking businessman duped her, her chief of staff and the U.S. Attorney's Office now prosecuting the McDonnells.

Williams testified yesterday, and in more detail this morning, that he wanted the credibility and prestige of the governor's office behind his effort to get state research hospitals to study anatabloc, a tobacco-derived supplement he believes has significant health value.

Maureen McDonnell got him a meeting at the governor's mansion with a state health official, and Williams pitched her on asking state employees to volunteer to test anatabloc. He said he believed it would lower health costs by cutting down on sick days and cutting reliance on prescription drugs.

The state didn't agree to the study, and Williams never got the grant funding he hoped for from the state's tobacco commission, which doles out economic development grants. Williams said the governor thought going to the commission was a good idea, though, and Williams said he hired former attorney general Jerry Kilgore to push for the funding.

He also doled out $25,000 grants to Virginia doctors, and doctors at Johns Hopkins, to prepare grant materials, he said. Williams did get his product launch party at the mansion, which he said was Maureen McDonnell's idea.

He told prosecutors that it was held after he had given the McDonnells a $50,000 loan, $15,000 for their daughter's wedding, taken the first lady on a $20,000 shopping spree in New York and let the family use his vacation house and exclusive golf club membership.

He also let the governor borrow his Ferrari, which he had an employee deliver to the lake house, again at Maureen McDonnell's suggestion, he said.

"She said, 'It'd just be nice," Williams recounted. "'You know, we never get to do things like that.'"

Williams said he aquiesced to this, and the first lady's other requests, because he wanted her and the governor to attend various events, set up meetings and generally support his efforts to promote and study anatabloc.

Their support "sends a signal to those medical schools that this is important," he said. Williams wanted doctors at state hospitals "to see that Virginia was supportive of this ... this is being taken seriously by the state of Virginia," he said.

This is a breaking news update, filed during the trial's morning break. Check back for updates.


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