Former state AG testifies in ex-governor trial

Attorney represented businessman in early efforts to obtain money from state commission

By Larry O'Dell
Associated Press

RICHMOND, Va. (AP) - The wealthy businessman who lavished former Virginia Gov. Bob McDonnell and his wife with thousands of dollars in gifts and loans said repeatedly that the couple supported his company and its signature product, former state Attorney General Jerry Kilgore testified Monday.

Kilgore, now a private attorney, represented former Star Scientific Inc. CEO Jonnie Williams in his preliminary efforts to obtain money from a state tobacco commission for university research on the anti-inflammatory nutritional supplement Anatabloc. The commission is chaired by Kilgore's twin brother, state Del. Terry Kilgore.

The company never applied for the grant, stymied in part by a lack of progress in getting two state universities on board. Kilgore recalled telling Williams that the universities were "not stepping up to the plate yet." Williams was frustrated.

"He reminded me again of the governor's and first lady's support," Kilgore said.

Kilgore, who ran unsuccessfully for governor in 2005 after completing his term as attorney general, said he agreed that the governor's support would have been helpful. And he said there is nothing illegal about the governor supporting such a project.

However, prosecutors said the McDonnells' support came with a price tag - more than $165,000 in gifts and secret loans from Williams. They are charged in a 14-count indictment with accepting the gifts and loans in exchange for promoting Williams' products.

Even before McDonnell received the loans from Williams, he borrowed $150,000 from two others to help bail out his struggling vacation rental properties, McDonnell's former brother-in law testified.

The prosecution called Michael Uncapher to the stand to help paint the former governor and his wife, Maureen, as a financially desperate couple. Prosecutors say money troubles from the Virginia Beach properties owned by McDonnell and his sister were one of the motivating factors in the gifts-for-favors scandal that resulted in a 14-count indictment against the McDonnells.

Uncapher testified that MoBo Realty borrowed $100,000 from McDonnell's father, John McDonnell, in 2007 and $50,000 from Dr. Paul Davis, a radiologist, in 2009. Two loans totaling $70,000 from Williams followed in 2012, Uncapher and other witnesses have testified.

Uncapher, who said his divorce from McDonnell's sister became final earlier this year, said family members figured when the real estate partnership was established in 2005 that it would lose $50,000 to $60,000 a year because the property was intended primarily for the family's enjoyment.

On cross-examination, Uncapher acknowledged that his ex-wife is a successful business executive who earned more than $500,000 in 2012. The defense made that point to counter the prosecution's financial desperation claim. Uncapher also said his own financial mismanagement contributed to the money problems.

Earlier, a state official testified that McDonnell ended a meeting in his office by touting Anatabloc's effectiveness.

Sara Wilson, director of the Virginia Department of Human Resource Management, said that when a March 2012 meeting to discuss the state employee health plan was breaking up, McDonnell pulled a bottle of Anatabloc from his pocket and mentioned that it was helping him and his wife.

Wilson said she had met about three weeks earlier with Star Scientific executive David Dean and rejected his request that she add Anatabloc to the list of items covered by the state plan.

Wilson described a February meeting with Dean as a salesman's "cold call" and said that, to her knowledge, McDonnell had nothing to do with it. She said she was interested but wanted to see scientific studies. Instead, he brought marketing material to a meeting.

Meanwhile, the maker of Anatabloc, now known as Rock Creek Pharmaceuticals Inc., said Monday it was halting sales of Anatabloc and another supplement called CigRx while it sorts out issues with the Food and Drug Administration.

Late last year, the federal agency sent a warning letter to the company saying that its products contain a new dietary ingredient that requires approval before it can be marketed.

The agency also said the company's website had improperly promoted Anatabloc as a drug by suggesting it can be used to treat various diseases.

Published: Wed, Aug 13, 2014