Cuccinelli broke no laws in late filings, prosecutor says 

RICHMOND — Attorney General Ken Cuccinelli solicited and initially neglected to disclose thousands of dollars in gifts from Jonnie Williams Sr. and troubled dietary supplement company Star Scientific, but broke no laws, a prosecutor's report today says.

The investigation has also found no evidence that Cuccinelli, who also initially failed to disclose his ownership of more than $10,000 in Star Scientific stock, "in any way, promoted supported or assisted Star Scientific while he had a financial interest in the company."

The findings, released this morning by the office of Richmond Commonwealth's Attorney Michael N. Herring, are a significant political boost for Cuccinelli, the Republican candidate for governor this year. The attorney general has been dogged by Democrats over his affiliation to Williams and his company — at the center of ongoing state and federal probes involving Gov. Bob McDonnell and the gifts received by his family.

The inquiry by Herring's office, which also involved the Virginia State Police, found no evidence that Cuccinelli knowingly violated the State and Local Government Conflict of Interest Act.

"I appreciate the work of the Virginia State Police and Commonwealth's Attorney Mike Herring to provide an independent, impartial review of my financial disclosures. This review vindicates what I have said all along," Cuccinelli said in a statement today.

"There was no legal requirement to refer my own filings to a commonwealth's attorney to review, but I did it because I wanted to be completely transparent with the public."

The investigation was conducted at the request of Cuccinelli, who in April appointed the Richmond prosecutor to review the statements of economic interest he filed between 2009 and 2012. The move followed a public admission by the attorney general to reporters that he had omitted more than $12,000 in gifts from his disclosure forms.

The gifts included roughly $5,000 in gifts from Williams: airfare to New York City on Williams' private jet, a catered Thanksgiving dinner, as well as a vacations at Williams' Smith Mountain Lake home. Herring's report notes that Cuccinelli asked Williams for the use of his vacation property in 2012 and to host his family at the lake home in 2010 for Thanksgiving in 2010

"Although one cannot help but question whether repeated omissions of gifts from Williams are coincidence or a pattern reflecting intent to conceal, the disclosure of several other gifts and benefits from Williams in his original statements suggests that the attorney general was not attempting to conceal the relationship," write Herring and John C. Bullard, Herring's Chief Deputy Commonwealth's Attorney.

"Furthermore we find no evidence that in his statements the AG intentionally mischaracterized gifts and benefits from Star Scientific and Williams."

The attorney general, who was interviewed as part of Herring's investigation, told Herring that he realized he needed to amend his statements in April as his political campaign prepared to publicly release his old tax returns.

Cuccinelli had already amended his 2011 statement in fall 2012 to reflect his stock holdings of more than $10,000 in Star Scientific — an addition made after he learned that Williams and his company's relationship to Gov. Bob McDonnell was also the subject of investigations.

"This knowledge triggered his recollection of his own obligation to disclose his financial interest in Star Scientific, and he did so on October 4, 2012," the report states, noting that Cuccinelli subsequently referred the Williams/McDonnell investigation to his office on Nov. 7.

Herring's report acknowledges the failure of Cuccinelli to disclose "a number of reportable gifts and certain financial interests" that were outlined by the attorney general when he met with reporters in April.

"However, the attorney general has admitted to the omissions, and he has filed amended Statements which include the additional disclosures."

Elected officials are required to file annual statements of economic interest with the Secretary of the Commonwealth that demand, among other data, reporting of any gift worth $50 or more, and disclosure of any financial interest exceeding $10,000. Simply omitting gifts or holdings is not in itself a violation of the law. A prosecutor must determine that an official knowingly failed to report what he has received. Knowingly failing to disclose is a misdemeanor and can be the basis for removal from office.

The law also prohibits public officials from receiving gifts from individuals on such a frequent basis that it raises suspicion that the official is using his office for personal gain. But that provision carries no criminal penalties.

Herring's report provides details of a number of the gifts and the stock holdings Cuccinelli initially failed to disclose.

It was compiled with assistance of the Virginia State Police, who conducted interviews and reviewed documents and focused on statements made by Cuccinelli.

There is no indication that Williams was interviewed, though the report also concludes that the CEO derived no apparent benefit from the gifts he provided to Cuccinelli and showed no evidence that Williams "either intended to curry favor or influence the Attorney General in the performance of his duties."

But Herring was careful to note the limitations of the report, released to the media this morning.

"This report is in no way intended to offer an explanation for the behavior of the attorney general or any member of his staff," it states on the first of its nine pages. And later it states: "Our conclusions regarding the attorney general's statements are based on evidence, or lack thereof, not suspicion."

The report does offer a further explanation by Cuccinelli for his interest in purchasing Star Scientific stock in October 2010 and September, 2011. The attorney general told investigators that he became interested in the science behind Star's anti-inflammatory dietary supplement, Anatabloc, "because of his engineering background."

The report also states that according to Cuccinelli, Williams "aggressively sought ways to promote the product.

"The attorney general indicates that he referred a friend and a family member to Williams so that they could learn about the product's uses," but otherwise the investigation "revealed no actual evidence, beyond hearsay" that Cuccinelli promoted Anatabloc.

Likewise, Herring's report says his investigation could not confirm that the "pace and or substance" of litigation filed by Williams' company against the state in 2011 challenging a $700,000 tax assessment on Star's tobacco curing barns in Mecklenburg County. Critics had charged that the attorney general's office had dragged its feet in the case, for which Star stands to pay $1.7 million in penalties if it is unsuccessful in its suit.

The report says Cuccinelli, who owned Star Scientific stock at the time the lawsuit was filed "made no recommendations of attorneys who might be able to assist" in the lawsuit.

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