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RICHMOND -- Attorney General Ken Cuccinelli has decided to give away $55,500 in campaign contributions he received last year from the director of an embattled veterans charity organization that is under investigation in Virginia and several other states.

Cuccinelli's decision, announced Wednesday, comes after two months of controversy and unanswered questions about the activities of the U.S. Navy Veterans Association and its mysterious director, Bobby Thompson.

Thompson, who most recently resided in Tampa, Fla., was the second-largest individual donor to the Republican attorney general's 2009 campaign. He also gave $12,500 to other Virginia elected officials last year, including $5,000 to Gov. Bob McDonnell's campaign.

McDonnell and three legislators who received contributions from Thompson announced plans to donate those funds to charity in May, shortly after The Roanoke Times published a story detailing the U.S. Navy Vets' efforts to gain an exemption from certain charitable solicitation reporting requirements. Virginia's consumer affairs agency has since opened an investigation of the association and at least six other states have launched probes amid questions about how the group spent millions of dollars in reported donations.

Cuccinelli was criticized by Democrats for holding on to contributions from Thompson after McDonnell and other politicians gave up their donations. Cuccinelli announced last month that he would put $55,500 in a separate, restricted account pending the outcome of the state's investigation.

But when Thompson's lawyers told an Ohio judge earlier this month that they could not find their client, it became apparent that Thompson had chosen not to defend himself, Cuccinelli said.

"We were practicing the principle of presumed innocence with Bobby Thompson, awaiting proof from law enforcement that the money he had given the campaign was either a legitimate donation or was not his to give," Cuccinelli said in a prepared statement. "With Mr. Thompson's recent disappearance and apparent unwillingness to maintain contact with his own attorneys, it seems that he does not wish to defend himself or the U.S. Navy Veterans Association. Because of this, I chose to divest my campaign of any funds associated with Mr. Thompson."

Cuccinelli's political team has been reaching out to Virginia veterans over the past week to determine how they can put the funds to use for veterans and their families, said Noah Wall, Cuccinelli's political director.

"We want to make sure we do this whole process right," Wall said. "We're looking at a whole lot of options."

House Minority Leader Ward Armstrong, D-Henry County, argued that public pressure, not altruism, drove Cuccinelli to give up the funds.

"It would have been nice if he had come to this conclusion because it's the right thing to do, not because of public pressure," Armstrong said.

Armstrong last month asked McDonnell to put the state police in charge of investigating U.S. Navy Vets without involving the attorney general's office. Cuccinelli's office could become involved in the state's current investigation if legal action is required.

Thompson abandoned his rented Tampa duplex earlier this year after the St. Petersburg Times began questioning him for a series of stories published in March that raised questions about the legitimacy of the U.S. Navy Vets group and what happened to the money it raised. Wall said he talked briefly to Thompson by phone in mid-June, when Cuccinelli's political team was trying to determine whether Thompson's donations to the campaign came from personal funds. Wall said he did not ask where Thompson was at the time and has not talked to him since.

Thompson made three separate donations to Cuccinelli's campaign last year. The first two contributions were unsolicited. Cuccinelli has said that he received a $50,000 contribution after calling Thompson to request another donation, but did not believe he asked for such a large sum.

The St. Petersburg Times stories were published shortly after Virginia's General Assembly passed legislation that could allow the group to gain an exemption from annual registration requirements under the state's charitable solicitation law.

After learning of the stories, state Sen. Patsy Ticer, D-Alexandria -- who sponsored the bill -- asked aides in McDonnell's office to veto it. But McDonnell's staff said Ticer's concerns weren't communicated to the governor before he signed the bill.