CREW Files IRS Complaints against VA Gov. Bob McDonnell, Maureen McDonnell, and VA AG Ken Cuccinelli

  CREW Files IRS Complaints against VA Gov. Bob McDonnell, Maureen McDonnell,
  and VA AG Ken Cuccinelli

Business Wire

WASHINGTON -- July 23, 2013

Today, Citizens for Responsibility and Ethics in Washington (CREW) called on
the Internal Revenue Service (IRS) to investigate whether Governor Robert
McDonnell (R-VA), his wife, Maureen McDonnell, and Attorney General Kenneth
Cuccinelli (R-VA) violated tax law by failing to report and pay taxes on
income received from Jonnie R. Williams, Sr. and Star Scientific, Inc.

CREW Executive Director Melanie Sloan stated, “Their tax returns may turn out
to be the McDonnells’ and Attorney General Cuccinelli’s Achilles’ heels. Even
if prosecutors have a tough row to hoe proving willful and knowing violations
of gift and bribery laws, tax violations may be easier to pursue. Al Capone,
after all, was convicted not of extortion or murder, but tax evasion. The IRS
should investigate immediately.”

In the past two years, Gov. and Mrs. McDonnell have received at least $166,150
in payments, goods, and services from Mr. Williams, a trust he controls, and
his company. At the same time, Gov. and Mrs. McDonnell repeatedly promoted
Anatabloc, a dietary supplement critical to Star Scientific’s success.
Additionally, Mrs. McDonnell hosted a luncheon at the governor’s mansion to
launch Anatabloc and touted it to potential investors.

Since 2009, Attorney General Cuccinelli has received at least $18,893 in goods
and services from Mr. Williams, including lodging for several family vacations
at Mr. Williams’s lake house, trips on his private jet, and a box of Anatabloc
valued at $6,711. During the same period, the attorney general purchased
nearly $20,000 worth of Star Scientific stock, and his office oversaw the
investigation and prosecution of the governor’s former chef, who revealed
alleged misconduct by Mr. Williams and Gov. and Mrs. McDonnell.

The Internal Revenue Code requires taxpayers to report all income received. A
gift can only be excluded from income if it was genuinely given out of
generosity with no expectation of receiving a benefit in return. Similarly,
only a bona fide loan — one the borrower expects to pay back and the lender
expects to be repaid — may be excluded from reported income. Failing to report
all income and pay taxes can result in fines and criminal liability.

Sloan continued, “Given everything the McDonnells failed to disclose and all
Attorney General Cuccinelli ‘forgot’ to disclose, it seems highly unlikely
they would have declared the income on their tax returns. Further, it defies
credulity to believe Mr. Williams expected no benefit in return for the many
gifts he bestowed on Virginia’s most powerful politicians. Attorney General
Cuccinelli has been quick to criticize his Democratic gubernatorial opponent,
Terry McAuliffe, for failing to release his tax returns. Perhaps he’d like to
allow journalists to re-examine his own returns so the public can learn
whether he accurately reported his income.”

CREW also requested the IRS investigate whether Mr. Williams or Star
Scientific violated the tax code by failing to report the supposed gifts,
failing to pay potential taxes on those gifts, or improperly deducting the
gifts as business expenses.

Read the IRS complaint against Gov. and Mrs. McDonnell

  *Read the supporting exhibits

Read the IRS complaint against Attorney General Cuccinelli

  *Read the supporting exhibits

Read this release on CREW’s website

Citizens for Responsibility and Ethics in Washington (CREW) is a non-profit
legal watchdog group dedicated to holding public officials accountable for
their actions. For more information, please visit www.citizensforethics.org or
contact David Merchant at 202.408.5565 or dmerchant@citizensforethics.org.

Contact:

CREW
David Merchant, 202-408-5565
dmerchant@citizensforethics.org
 
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