Bloomberg News

Virginia Governor McDonnell Apologizes as He Pays Back Loans (1)

July 23, 2013

Virginia Governor Robert McDonnell

Virginia Governor Robert McDonnell speaks at the Bloomberg Link Economic Summit in Washington, D.C., on April 30, 2013. Photographer: Andrew Harrer/Bloomberg

Virginia Governor Robert McDonnell said he and his wife returned more than $120,000 in loans from the chief executive officer of Star Scientific Inc. (STSI:US) as he apologized for the episode.

“I am deeply sorry for the embarrassment certain members of my family and I brought upon my beloved Virginia and her citizens,” he said in a statement released today by his legal team. “I want you to know that I broke no laws and that I am committed to regaining your sacred trust and confidence.”

McDonnell’s relationship with the CEO, Jonnie Williams, has drawn a federal investigation and is tarnishing the reputation of the Republican governor in the final year of his term. It may also hurt Kenneth Cuccinelli, the Republican attorney general seeking to replace McDonnell in November, because of his own ties to Williams.

The Federal Bureau of Investigation is investigating McDonnell’s ties to the Williams, questioning whether he used his office to help Star in return for tens of thousands of dollars in gifts and loans.

McDonnell has described Williams as a friend and said his administration hasn’t given any special favors to Star, based in Glen Allen, Virginia. On July 18, McDonnell released a review saying there were no grants, contracts or public funds given to Star during McDonnell’s administration, even after three meetings that Williams and another Star employee had with state health and human resources officials.

Real-Estate Business

Between 2011 and 2012, Williams loaned the money to McDonnell’s wife and to a real-estate business owned by the Republican governor and his sister.

McDonnell said the repayments included $52,278 for a loan made to the governor’s wife in 2011 and $71,837 for two loans made to the real-estate business in 2012. The payments included both principal and interest, according to the statement.

The loans, along with other gifts from Williams, weren’t originally listed on McDonnell’s financial disclosure reports.

Cuccinelli has acknowledged failing to disclose gifts from Williams, including using the CEO’s vacation home last summer. The attorney general appointed a special prosecutor to look into the financial-reporting issues.

To contact the reporter on this story: Toluse Olorunnipa in Washington at tolorunnipa@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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