News Column

McDonnells owed up to $90,000 on credit cards

August 13, 2014

By Bill Sizemore, The Virginian-Pilot

Aug. 13--RICHMOND -- Evidence this afternoon in the federal corruption trial of former Gov. Bob McDonnell and his wife, Maureen, shed new light on the first couple's finances and level of communication during the height of their interactions with businessman Jonnie Williams.

Credit card records of the first couple indicate that they had a $75,000 balance on seven cards in January 2010 -- a number that rose to a high of $90,000 in September 2010.

Additionally, tax returns of a real estate entity formed by Bob McDonnell and his sister showed losses of more than $40,000 each year in 2009 and 2010.

Prosecutors have argued that financial pressures motivated the McDonnells to strike a corrupt bargain with Williams, soliciting more than $160,000 in loans, gifts and luxury vacations in exchange for promoting his diet supplement business from the governor's mansion.

Prosecutors also introduced cell phone records today showing that Bob and Maureen McDonnell had more than 300 phone conversations longer than one minute from April 2011 until February 2013. During that same period, the first lady had 167 such conversations with Williams.

The number of calls between the McDonnells increased from one year to the next. Those between the first lady and Williams decreased.

That evidence runs counter to defense claims that the McDonnells were barely on speaking terms because of a close relationship between the first lady and Williams.

Earlier today, the jury heard testimony about a second bank loan for which the ex-governor applied without disclosing off-the-books loans the couple had received from Williams.

The McDonnells refinanced four real estate properties in early 2013 with Pentagon Federal Credit Union in Alexandria for $812,000. On the application the governor submitted on Feb. 1, there was no mention of the $120,000 in loans the McDonnells had received from Williams, nor was there any acknowledgment of Maureen McDonnell's stock holdings in Williams' company, Star Scientific.

On Feb. 15, the first lady was interviewed by State Police agents probing the first couple's relationship with Williams -- the couple's first indication that they were under scrutiny. Three days later, on Feb. 18, the governor submitted amended loan documents that included the Williams loans and the Star stock.

The Feb. 1 application is the basis for one of the charges in the multi-count indictment in the McDonnell case. Making false statements on bank loan papers is a felony.

Nanette Bolt, the mortgage supervisor who worked on the loan, said neither the governor nor the first lady ever mentioned the Williams loans until the amended documents were submitted.

On cross-examination, Bolt acknowledged that the amended documents also included other revisions unrelated to Williams.

Earlier this morning, Virginia Beach Mayor Will Sessoms faced cross-examination about an earlier loan that the governor secured from Sessoms' bank, TowneBank of Virginia Beach, without disclosing the Williams loans.

Sessoms acknowledged that the 2012 loan application was from Bob McDonnell individually, not the McDonnells as a couple, and therefore he was not required to list the $50,000 loan Williams made to the first lady in 2011.

A second $50,000 loan check from Williams in 2012 was made out to a corporate entity the governor formed with his sister to manage two rental properties the family owned in the Sandbridge area of Virginia Beach.

Defense attorney John Brownlee tried to elicit testimony from Sessoms that a loan from a separate corporate entity, granted without a personal guarantee from the governor, would not have been required to be listed. After a flurry of objections from prosecutor Michael Dry, Sessoms said the practice of the bank is that such loans do not have to be disclosed.

Sessoms also said he was comfortable that the McDonnells had sufficient assets to cover the debt on the Sandbridge properties, despite earlier testimony that they incurred 47 late fees over a four-year period.

Dry said today the government expects to rest its case Thursday. The defense is expected to begin presenting its case Monday. Bob McDonnell's attorneys have said they plan to put the former governor on the stand.


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