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Peter’s Take: Star Scientific Burns Two Virginia Leaders

by Peter Rousselot | April 25, 2013 at 1:30 pm | 983 views | No Comments

Peter’s Take is a weekly opinion column. The views and opinions expressed in this column are those of the author and do not necessarily reflect the views of ARLnow.com.

Peter RousselotStar Scientific, a Virginia company trying to rescue its sagging economic prospects, has damaged the hopes for higher office of Governor Bob McDonnell and Governor wannabe Ken Cuccinelli.

Both cases illustrate the toxic mix of Virginia’s notoriously weak conflict of interest laws with ambitious politicians who flew too close to the sun.

McDonnell: In 2011, the CEO of Star Scientific made a $15,000 gift to defray the costs of the wedding of McDonnell’s daughter Caitlin. The $15,000 was not disclosed as a contribution on the grounds that the money was a gift to McDonnell’s daughter — not to him.

While it is disputed whether McDonnell’s agreement to be responsible for the cost of the wedding did require disclosure of the $15,000 gift, there is no disagreement that Star Scientific is the subject of a federal securities investigation. Moreover, both McDonnell and his wife have found several occasions to promote a new Star Scientific dietary supplement.

Cuccinelli: Star Scientific filed a lawsuit challenging a tax assessment on property it owned. Cuccinelli was required to arrange for legal representation to defend the state against Star Scientific’s lawsuit, but that legal representation did not have to be provided by the Attorney General’s own office.

Cuccinelli did represent the state in Star Scientific’s lawsuit, but failed to disclose that he had a financial interest exceeding $10,000 in Star Scientific. In October 2010, Cuccinelli purchased a little more than $10,000 worth of Star Scientific stock. At the end of the year, the value of that stock dropped below $10,000, and therefore did not need to be disclosed. But, in September 2011 Cuccinelli acquired 3,600 additional shares in the company, lifting the value of his total stock holdings to nearly $19,000.

After enterprising reporters published the whole story, Cuccinelli agreed to appoint outside lawyers to represent the state of Virginia in Star Scientific’s lawsuit.

These events illustrate some inconvenient truths about:

  • Virginia’s conflict of interest laws
  • Bob McDonnell
  • Ken Cuccinelli

As the average person instinctively recognizes, it is just ridiculous that Virginia law says there is no conflict of interest if a Virginia elected official has a $9,999 financial interest in a company which can benefit from public decisions, but there is a conflict of interest if the same public official has a $10,001 financial interest. It‘s also ridiculous that the law says that gifts to a public official’s immediate family members do not require disclosure.

Let’s assume that McDonnell and Cuccinelli both knew what the law required, but decided they had not violated the law.

Such decisions reflect ethical standards that are far too low, and reflect negatively on their aspirations for higher office.

Peter Rousselot is a member of the Central Committee of the Democratic Party of Virginia and former chair of the Arlington County Democratic Committee.

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