By Kristen Smith
Capital News Service
RICHMOND – The spotlight continues to stay on Gov. Bob McDonnell and Attorney General Ken Cuccinelli over their dealings with Star Scientific Inc., which has been accused of trying to curry favor with state officials.
Star Scientific, a Henrico-based company with roots in tobacco research that now sells nutritional supplements and other health products, sued the commonwealth over an interpretation of the state tax law in July 2011.
As Virginia’s top lawyer, Cuccinelli came under fire for an alleged conflict of interest in the case. Cuccinelli owns between $10,000 and $50,000 worth of stock in Star Scientific.
“To be clear, there was absolutely no conflict of interest with the attorney general’s office. But in an abundance of caution and to move past what has become an unnecessary distraction for the office and the attorney general, the case was given to outside counsel,” Brian Gottstein, spokesman for the attorney general’s office, said in a press release.
Cuccinelli appointed former Attorney General Stephen D. Rosenthall and former Solicitor General William H. Hurd to handle the case after the concerns were raised.
Democratic leaders urged Cuccinelli to resign because of his relationship with Star Scientific and its chief executive officer, Jonnie R. Williams Sr.
“As attorney general, it’s Ken Cuccinelli’s job to represent the taxpayers, not his own investments,” said Delegate Charniele Herring of Alexandria, who chairs the Democratic Party of Virginia.
“For Ken Cuccinelli to say that it’s completely fine for him to buy stock in a company that is suing the commonwealth for over a million dollars in unpaid taxes is simply outrageous. It is shocking that Ken Cuccinelli thinks it’s ethical for him to put his own financial interests in direct odds with the Commonwealth he is supposed to be defending.”
On Thursday, Cuccinelli, who is the Republican nominee for governor, released eight years of tax and charitable gift summaries – from 2005 to 2012. According to the reports, Cuccinelli last year sold 1,400 shares of Star Scientific stock, making about $4,000.
Meanwhile, McDonnell, a fellow Republican who is finishing his four-year term as governor, also has had dealings with Star Scientific’s CEO.
In June 2011, Williams wrote a check for $15,000 for the catering bill at the wedding of McDonnell’s daughter. McDonnell was not required by law to disclose the donation in his public reports because it was a gift to a family member. Even so, he came under intense scrutiny by Virginia lawmakers.
The Washington Post posted documents last week showing that McDonnell signed a catering contract for his daughter’s wedding. That has raised questions about whether he benefited from Williams’ gift.
McDonnell also received more than $2,000 from Williams during a trip to Smith Mountain Lake during the summer of 2011. The governor disclosed the gift as being used for “lodging and entertainment” on his 2011 statement of economic interest.
According to The Washington Post, McDonnell and his family rode back to Richmond in a $190,000 Ferrari they borrowed from Williams.
Sen. Mark Herring, D-Leesburg, has asked the U.S. Justice Department to investigate McDonnell’s and Cuccinelli’s ties to Star Scientific.
“Accepting gifts from a company that has business before the state raises serious ethical questions and concerns, and the people of Virginia deserve a fair and independent investigation to determine the facts,” said Herring, a Democratic candidate for attorney general.
He also proposed that Virginia require elected officials to publicly disclose gifts given to immediate family members.
Capital News Service is a student news-gathering program sponsored by the School of Mass Communications at Virginia Commonwealth University.