Today’s evidence seems to have had two main points — that Bob McDonnell was fully involved in Maureen’s purchases of Star Scientific stock with money borrowed from Jonnie Williams, and that Williams didn’t tell the rest of the Star Scientific executive corps that he was trying to buy access to the Governor.
The overall picture from today’s evidence was that staffers both in the Governor’s office and at Star Scientific were concerned about what they did know of the relationship between the McDonnells and Williams, and kept in the dark about the details.
One thing that Bob McDonnell absolutely has to do is to persuade the jury that he didn’t know that Maureen and Jonnie were violating the law. If there is a little proof that he was being secretive himself, he might explain that away by saying that he was worried about political appearances, not legality. But if there is very much proof of him being secretive, that becomes a tough sell.
Today Matt Conrad, deputy chief of staff, testified about how Bob McDonnell prepared and filed his Statements of Economic Interests for 2012 (filed in 2013, reflecting all economic interests, including all gifts, in 2012). The SoEI did not include the $70,000 in loans made by Williams’ Starwood Trust to McDonnell’s MoBo Realty LLC.
Paul Perito, vice president and chief counsel of Star Scientific, testified about Williams and the reaction of the Star Scientific leadership to Williams’ lobbying efforts. He testified that he did not know about the various loans and gifts to the McDonnells. He had hoped that Anatabloc could attract the legitimate attention of researchers, and he hoped that the “product launch” in August, 2011, would get that going. But in November, 2011, he had a conference call with “bureaucrats” at UVA, and it was apparent to Perito that they had no support from the people who could help Star Scientific. (At the August product launch, Williams had given UVA researcher $25,000 to defray the costs of putting together a proposal for funding from the Virginia Tobacco Commission — presumably this was a follow-on to that gift.) When Perito told Williams that they were getting no help from UVA, Williams was furious.
Williams told Perito some time in 2012 that Maureen McDonnell wanted to be on the Board of Star Scientific, because it would enable her to get paid a director’s fee. Perito told Williams that “that was one of the worst ideas I’d ever heard,” because she had no qualifications for the position and it would be a conflict of interest.
Perito learned in January, 2013, that Williams had been subpoenaed, and he began asking Williams what this was all about. When he learned that Williams had been writing checks to the McDonnells, he was “breathless.” Perito, a former prosecutor, understood that Williams was in big trouble; he called Williams’ behavior “egregiously bad,” and if he had known about it he would have put a stop to it.
The last witness of the day was stockbroker John Piscitelli, long-time friend of the McDonnells and godparent of one of the McDonnell children, testified about how Maureen and Bob McDonnell bought Star Scientific stock. He was at times forgetful, seemingly evasive, as he had to be reminded time and again about his grand jury testimony.
Let’s take a look at some important dates in the conspiracy indictment.
April, 2011 — Jonnie Williams took Maureen McDonnell to New York for a shopping trip, spending about $20,000 at Oscar de la Renta, Louis Vuitton and Bergdorf Goodman.
Late May, 2011 — In a private meeting at the Governor’s Mansion, Maureen told Williams that the first family was having “severe financial difficulties,” and she asked him for a $50,000 loan. Williams wrote Maureen a $50,000 loan from Starwood Trust, and also a $15,000 check to the caterer of Cailin McDonnell’s wedding.
June 1, 2011 — Williams and Maureen traveled to Florida to attend a presentation about Anatabloc to investors and researchers. On the same day, Maureen asked stockbroker Piscitelli to open an account so that she could buy 6,000 shares of Star Scientific (STSI, on the stock exchange) stock for $31,079.
June 4, 2011 — Cailin McDonnell was married.
July, 2011 — The McDonnell family vacationed at the Williams home at Smith Mountain Lake, and Bob drove Williams’s Ferrari home to Richmond.
August 2, 2011 — Maureen bought another $2,000 in STSI stock, even though her initial $31,000 investment had lost more than half of its value. Maureen asked Piscitelli a number of questions about how she could transfer stock to one of her children, and whether there was a way that she could keep the stock, but not have it in her own name. Piscitelli had the sense that she was trying to avoid a disclosure requirement.
August 30, 2011 — Maureen arranged for a product launch at the Governor’s Mansion for Anatabloc. The event was paid for by Bob McDonnell’s political action committee, and at the event Jonnie Williams gave checks of $25,000 each to UVA and VCU Medical School researchers (apparently surprises to the doctors).
December, 2011 — Ultimately, Maureen dumped the stock before the end of the year; the SoEI reflected stock owned on December 31, so the investment didn’t have to be disclosed.
January, 2012 — Maureen bought back the STSI stock.
Late February, 2012 — Piscitelli participated in a conference call with Bob and Maureen during which they discussed opening a second brokerage account in Maureen’s name to hold the Star Scientific stock. They were then planning to borrow money from Star Scientific, posting those shares as collateral (which struck Piscitelli as extremely odd). During the call, Bob thanked Piscitelli for his help in arranging Maureen’s earlier stock transactions — which proves an important prosecution point that Bob knew what Maureen had been doing in buying and selling STSI stock. Williams has testified that in the last few days of February, he and Bob had a late night conversation about this suggestion of a loan against STSI stock; they apparently concluded that they couldn’t do that, so Williams agreed to a straight-up loan of another $50,000, this time to MoBo Realty, LLC.
March 6, 2012 — Williams writes a check for $50,000 to MoBo Realty from Starwood Trust.
Piscitelli’s testimony seems to poke holes in the “I didn’t know what my wife was doing” defense.
These three witnesses were a very good way for the prosecution to have ended the week. The thinking is that the prosecution will wrap up its case next week, and that the defense witnesses will begin the following week.
