News Column

McDonnell trial: Did Williams offer McDonnells a better deal than his $50,000 loan?

August 26, 2014

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



Aug. 26--RICHMOND -- A $50,000 loan deal between then Gov. Bob McDonnell and Jonnie R. Williams Sr. was initially meant to be even sweeter than the 2 percent, no-payments-for-three-years deal they landed on, Assistant U.S. Attorney Michael Dry said this morning.

The former governor is undergoing his second day of cross-examination. He and his wife, Maureen, are on trial on corruption charges.

Going through McDonnell's own handwritten notes in detail, Dry noted that the governor repeatedly wrote "50,000 shares," not $50,000 worth of shares. Based on stock prices at the time, Williams apparently suggested letting the governor hold onto more than $150,000 worth of stock.

To pay Williams back, McDonnell could have simply returned the shares or paid Williams a lower per-share price in 2015, after he left the governor's mansion. Depending on how the stock did, the governor could have pocketed tens of thousands of dollars, Dry said.

McDonnell said he didn't fully understand the deal Williams described to him during a phone call and a 20-minute face-to-face meeting. In the end, it didn't come off. McDonnell said he simply wanted a $50,000 loan to help shore up MoBo Real Estate, the company he and his sister co-owned, and which paid the bills for a pair of vacation homes they owned in Virginia Beach.

When Dry asked McDonnell -- who is in his fifth day on the stand -- how much he could have made on the deal, McDonnell said he didn't know.

"This is a proposal that never happened," he said. "I didn't do the math."

McDonnells own notes seem to clarify the deal, though. He wrote "payback in cash at 50,000 x 1.90 = $90,000" at one point. The stock as worth about $3.10 a ahare at the time, Dry said.

Dry also questioned the governor about a letter he was forwarded, via email. In it Williams company, Star Scientific, claimed that the governor supported a tobacco commission grant to help fund studies the company wanted on its marquee product, Anatabloc, at state universities.

McDonnell said he didn't remember seeing the attachment at the time, and that he didn't know at this point that Williams wanted the studies.

"I would have been upset with the lies," he said of the email attachment.

Dry also walked the governor through a series of emails and events in February of 2012, leading up to a Health Care Leaders reception at the governor's mansion, to which Williams was allowed to invite people in an apparent effort to pitch Anatabloc to doctors and garner support for his studies, which never occurred.

McDonnell was negotiating what ended up being a simple $50,000 loan from Williams, but at this point they were discussing the more convoluted stock deal. His wife, Maureen, emailed Jasen Eige, one of the governor's close aides, asking him to call Williams because officials university research arms weren't returning his calls.

"Gov wants to get this going," she told Eige in the email. "Let us know what u find out after we return."

Dry noted that the first lady said "us." The governor has testified before that he didn't ask her to send the email, and he didn't tell her that he wanted anything to get going.

Dry wondered aloud whether Maureen McDonnell really thought Eige, one of the governor's closest advisers, wouldn't mention her email to the governor. Also, she sent it while she was in a vehicle with the governor, based on time stamps and schedules Dry showed jurors this morning, but McDonnell said he didn't have any knowledge of the email being sent.

Several days later he followed up with Williams about the loan, then emailed Eige six minutes later, asking him to see him the next day about Anatabloc and the university studies.

Eige emails back to say he'll do so and that "we need to be careful with this issue."

McDonnell said he just wanted Williams' calls returned because Star Scientific had given state researchers $175,000 in grants to work on study proposals, and an eventually larger grant proposal to the tobacco commission.

He said he wanted Williams treated like anyone else, and that Eige's apparent concern was typical of the way official state issues where handled when donors were involved. Williams had donated his jet to the McDonnell campaign, as well as giving gifts and loans to the family that Eige didn't know about.

"We wanted to make sure that we handled people fairly," McDonnell said. "They couldn't get additional consideration or no consideration."

"We don't make decisions based on money," he said.

This is a breaking news story. Come back later for updates.

CORRECTION: This article has been edited to correct loan terms. the 2012 loan from Williams had a three year term, not four.

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