Cuccinelli says he may have helped donor Williams apply for state grants 

Attorney General Ken Cuccinelli says he may have helped a businessman who gave him thousands of dollars in gifts in an effort to get grants from a state agency.

The businessman, Jonnie Williams Sr., chief executive officer of Star Scientific, never did get any state grants, however.

The disclosure came in a footnote to a special investigation report that found Cuccinelli did not violate ethics law by failing to report all of Williams’ more than $19,000 of gifts or all his holdings in stock in William’s company Star Scientific.

Star sued the state to reverse a $1.7 million tax bill in 2011, shortly before Cuccinelli made a second, $10,000 investment in its shares and before the attorney general asked Williams if his family could stay for a third time at Williams’ Smith Mountain Lake vacation home.

Cuccinelli has said he never talked to Williams about the lawsuit, though he has said Williams had earlier complained about the disputed taxes.

The attorney general told the ethics investigators “that he may have suggested that Williams contact a certain attorney at a Richmond law firm ‘to assist him and his company with the Tobacco Fund,’ ” according to a report issued by Richmond Commonwealth’s Attorney Michael Herring, quoting an investigators’ findings.

Cuccinelli said he couldn’t remember exactly when this occurred, the report added.

Cuccinelli was referring to the state’s Tobacco Indemnity Fund, which was set up after the national settlement with cigarette companies in 1998, spokeswoman Anna Nix said.

The settlement was mainly intended to compensate states for the cost of caring for people with tobacco-related disease, but Virginia used some proceeds to help tobacco-producing regions cope with a likely blow to their economies from slumping sales of leaf. Star, which started as a discount cigarette maker in Mecklenburg County, is now in the diet supplement business.

“Ken Cuccinelli was asked by Jonnie Williams if he knew anything about the grant process. Ken said he did not and referred him to Jerry Kilgore,” Nix said. Kilgore, a former attorney general, is now Williams’ lawyer. Williams had given more than $27,000 to Kilgore’s unsuccessful 2005 bid to be governor.

Neal Noyes, executive director of the state’s Tobacco Indemnity Fund, said, “There has been no relationship at any time” between the fund and Star.

After interviewing members of Cuccinelli’s staff, the ethics investigators found no evidence that Cuccinelli’s personal financial interest in Star affected his judgment.

The investigators said they could not confirm “any suspicion that the pace and or substance of the litigation” was affected by Cuccinelli’s stockholdings or his relationship with Williams.

The attorney general’s office’s only response was a filing that said Star’s view that the assessment should be overturned is “a legal opinion to which no response is required.”

For nearly two years after that, the attorney general’s office did not seek a hearing or move to dismiss the case. In May, after Cuccinelli finally disclosed his stockholdings in Star, the attorney general’s office found two Richmond attorneys who volunteered to take on the case.

Cuccinelli told the investigators he first met Williams when the businessman lent his private jet to Cuccinelli for a trip to New York for an event in December 2009, which Cuccinelli attended in place of Gov. Bob McDonnell.

Beginning the next month, Cuccinelli stayed several times at Williams’ Goochland County mansion, just outside Richmond, as he was settling into his new job as Attorney General.

In October, Cuccinelli made a $10,000 investment in Star shares.

Though he has reported no other such large investments in one company, he told investigators he was interested in the purported science around Star’s tobacco-derived diet supplements because of his engineering background. He also asked Williams if his family could stay at Williams’ Smith Mountain Lake home for Thanksgiving, which they did.

The next year, Cuccinelli bought another $10,000 worth of stock. In both 2011 and 2012 he asked if his family could again vacation at Williams’ Smith Mountain Lake home, which they did.

The share purchase and the 2012 vacation stay came after Star sued the state to reverse a tax assessment that has climbed to more than $1.7 million.

“Ken Cuccinelli avoided prosecution for disguising his conflict of interest with Star Scientific and Jonnie Williams because of Virginia’s extraordinarily weak ethics laws,” Democratic Party spokesman Brian Coy said about Herring’s report. “Given his pattern of ‘forgetting’ to disclose stocks and gifts from financial patrons whose lawsuits over unpaid taxes are sitting in his office, it’s no wonder that Cuccinelli won’t accept Terry McAuliffe’s proposal to ban gifts and give our ethics laws real teeth.”

In addition to Williams’ gifts to Cuccinelli, he and Star have given more than $350,000 to McDonnell, his family and his campaign funds and political action committee since 2009.

The ethics investigators said they found no evidence that Williams’ gifts to Cuccinelli affected his investigation into allegations by the ex-chef at the Executive Mansion about the governor’s ties to the businessman.

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