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Ex-Virginia Governor Pleads Not Guilty to Corruption Charges

Jan. 24 (Bloomberg) -- Former Virginia Governor Robert McDonnell, once a rising star in the national Republican Party, pleaded not guilty to federal charges he used his office to help a businessman in exchange for more than $165,000 in loans and gifts.

McDonnell, whose term ended Jan. 11, and his wife, Maureen, were allowed to remain free without bail while awaiting trial after appearing today in Richmond federal court. Both were ordered by U.S. Magistrate Judge David Novak to surrender their passports. They face as long as 30 years in prison if convicted on the most serious counts.

The trial, on a grand jury indictment for fraud, conspiracy and obstruction of an official proceeding, was set for July 28. Novak warned parties in the case, which has received intense coverage by the Virginia and Washington media for months, against publicity related to the case.

“The gamesmanship with the media ends now,” he said. U.S. District Judge James Spencer, who presided over today’s arraignment, added, “It will not be a trial by press conference or press release.”

The scandal and probes surrounding McDonnell’s relationship with businessman Jonnie Williams dominated the governor’s final year in office, contrasting with the image of a politician who had led the Republican Governors Association and was mentioned as a potential running mate for presidential candidate Mitt Romney in the 2012 election.

Prosecutorial Overreach

The McDonnells, both 59, have denied wrongdoing and vowed to fight the charges, calling them a prosecutorial overreach.

Supporters thronged the corridors and courtrooms of the Richmond federal court building today, embracing the couple when they left the courtroom. A Catholic priest from their parish walked a few steps behind them.

On hand also was William Howell, the Republican Speaker of the House of Delegates.

Prosecutors alleged in the 14-count indictment that the couple took benefits including vacations, loans, private plane flights and a Rolex watch from Williams, the former chief executive officer of Star Scientific Inc., a company based in the McDonnells’ home town of Glen Allen, Virginia.

Williams, who met McDonnell as he campaigned for governor in 2009, allegedly showered the family with New York shopping sprees, golf matches and a $15,000 wedding luncheon for a McDonnell daughter at the governor’s mansion. He also loaned the family thousands of dollars to cover their losses in resort property they had purchased, according to the government.

Mansion Events

In return, McDonnell set up meetings for Williams with state officials and held events at the mansion to push the company’s biggest product, Anatabloc, a dietary supplement it billed as an anti-inflammatory compound, according to the Jan. 22 indictment.

McDonnell was not restricted in the gifts he could take under Virginia ethics law as long as he made the proper annual disclosures for anything worth more than $50 -- something he failed to do, according to the indictment. The law permits gifts to politicians’ immediate family members without any disclosure requirement.

McDonnell’s lawyer, John Brownlee of Holland & Knight LLP in Washington, said the allegations of a federal crime are baseless because McDonnell never took any “official act” on Williams’s behalf. In court papers filed Jan. 21, Brownlee sought access to grand jury records so he could see how prosecutors instructed the panel’s members on the law before they issued the indictment.

The charges against the McDonnells include theft of honest services through wire fraud, obtaining property under color of official right and making false statements.

“The centuries-old crime of bribery requires -- as it always has -- proof of a quid pro quo in the form of illicit payments made to secure official government benefits,” Brownlee wrote. “Not everything a public official does to benefit a donor is an ‘official act,’ however, or every photo-op would be a crime.”

The case is U.S. v. McDonnell, 14-cr-00012, U.S. District Court, Eastern District of Virginia (Richmond).

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