Bob McDonnell said he broke no laws as Va. gov

RICHMOND, Va. — Former Virginia Gov. Bob McDonnell said Friday that he did nothing wrong in accepting $70,000 in loans from a wealthy businessman at the heart of his federal corruption trial.

Except in a few cases of simple forgetfulness, he disclosed what was required by law, he said. And Jonnie Williams, then chief of Virginia-based Star Scientific, wasn't asking him for any favors, except one: a phone call to his 80-year-old father on the man's birthday.

"I spent 38 years in public office, and I would not trade that for a golf match or dinner with anybody," McDonnell said to end his third day of testimony. He and his wife are accused of accepting more than $165,000 in gifts and loans from Williams in exchange for promoting Star Scientific's dietary supplements.

By the time prosecutors finished presenting their case last week, the tally had reached $177,000 in travel, luxury goods and checks.

McDonnell didn't disclose those loans in an annual report that the Virginia requires its public officials to file each year, telling the jury that the $50,000 he negotiated for in February 2012 — a loan process that he said his wife initiated — resulted in a check a month later to a vacation-rental business that the then-governor owned with his sister.

A second $20,000 loan in May 2012 also went to the same entity, MoBo Real Estate Partners LLC. So McDonnell said he had no personal liability to repay the loans that went to help pay expenses on two oceanside houses that he and his sister bought in 2005 and 2006 for $2 million.

McDonnell's former brother-in-law said last week that the properties were operating with a $50,000-a-year shortfall though a bookkeeper testifying for the defense said that amount included depreciation.

"I felt I had nothing to hide and turned everything over that I had," McDonnell said about giving his handwritten notes to government officials who had subpoenaed them.

Virginia laws about gifts to public officials are among the most lax in the country.

A governor can accept just about any gift, but he must report anything valued at $50 or more. And if a company or individual gives him several smaller gifts, he must disclose those when the total amount reaches $100.

McDonnell made an unintentional mistake when he didn't report golf outings at private Kinloch Golf Club in Manakin-Sabot, Va., charged to Williams' tab and amounting to thousands of dollars, he said. He also should have disclosed a golf bag from Williams emblazoned with the logo of his alma mater, the University of Notre Dame.

"Those probably should have been reported," McDonnell said. "I take responsibility for that."

McDonnell said he did report Williams' May 2011 loan of $50,000 to Virginia's first lady.

It was listed on his 2012 state disclosure form as a personal liability of an immediate family member to an individual creditor for an amount between $10,001 and $50,000 — the state's form asks only for amounts in ranges — with the creditor's occupation as "Medical Services." He kept much of the same information the next year, switching the occupation to "Health Care."

On the stand Thursday, the former governor said he didn't know about that transaction until a month after it occurred and after his wife had spent the proceeds.

He said did not ask Maureen McDonnell to return the money because he thought she had the means to repay it herself.

The government has said that the McDonnells were trying to hide their involvement with Williams, conspiring to use the governor's office to enrich themselves. Among the charges leveled in prosecutors' 14-count indictment: that Bob McDonnell understated his liabilities on an October 2012 loan application when he and his wife owed Williams at least $50,000 and did the same in February 2013 when they owed Williams $120,000.

Bob McDonnell told the jury that he used the same rationale as his disclosure forms in omitting Williams' loans on the bank loan applications. He said the first loan was to his wife, not him, so he saw no need to list it among his personal liabilities. And the other loans were to MoBo, so he was not liable for them.

Yet he did decide to alter the paperwork he submitted for his February 2013 loan from Pentagon Federal Credit Union after state police and the FBI questioned Maureen McDonnell about her financial dealings with Williams. He wanted to be "absolutely correct," he said and previously had changed what he called drafts of financial paperwork that he had submitted for other loans.

Lying on a mortgage application is a federal crime.

Williams gave those loans and gifts to gain access to other state officials, prosecutors claim. The CEO's goal was to get state-sponsored research for Star Scientific's newest supplement, Anatabloc, which the company touted as having anti-inflammatory properties.

On the stand for the past three days, Bob McDonnell said that Williams received no more help and access from him than he would have given any other state company and the entrepreneur never told the governor what he wanted in exchange for his largess.

Bob McDonnell chafed at the idea that he was in desperate need of Williams' money, showing jurors that he had an 820 credit score in March 2012 out of a possible 850.

"I misjudged Jonnie Williams. I thought he was a true friend," said Bob McDonnell, someone that he had grown close enough to by 2012 that he thought Williams might be exempt from Virginia's reporting requirements for gifts on his disclosure forms. "I had no idea he would come into federal court and make false statements about me."

On Monday, Bob McDonnell's sister, whose name is also Maureen and who goes by Maureen C. "Mo" McDonnell, said accepting Williams' loans at 2% a year for three years was easier than liquidating other assets and that the terms of his loan were favorable. Bob McDonnell repaid three Williams loans with interest in July 2013 after reports about an investigation into the McDonnells' finances were made public, and Mo McDonnell said they used her savings to do so.

On Thursday, Bob McDonnell's defense team spent most of that day having the former governor talk about his broken marriage, building up their claim that the McDonnells, married 38 years, could not have conspired to enrich themselves because they were barely speaking during most of Bob McDonnell's term as governor.

Bob McDonnell finished telling jurors his version of events Friday, and his wife's lawyers will follow up Monday. The couple have separate legal teams, and a key part of their defense is the idea that their marriage was on the rocks and that they were barely communicating.

After both sets of defense lawyers quiz the former governor, prosecutors will have their chance to poke holes in his story.

Maureen McDonnell, who faces the same 14 charges as her husband, is not expected to take the stand in her own defense. Instead, she's been listening as three weeks of prosecution witnesses and this week's defense testimony painted a picture of her as a shrew at best and mentally unstable at worst.

Contributing: Joanie Vasiliadis and Peggy Fox, WUSA-TV, Washington; Shelly Wilford, WVEC-TV, Hampton-Norfolk, Va.; The Associated Press