Bob McDonnell reports nearly $2B cumulative surplus

Gifts scandal looms over budget feat

Virginia Gov. Bob McDonnell said Monday that the state accumulated the largest cumulative budget surplus of any administration in state history — a feat that comes as an ongoing gifts scandal threatens to overshadow the Republican lame duck’s final months in office.

The state ended the fiscal year that finished June 30 with $585 million more in its coffers than projected — the largest total since 2005. The combination of higher-than-expected revenues and spending that came in lower than projected adds up to nearly $2 billion over the course of Mr. McDonnell’s 3 1/2 years in office — the highest total in state history.

The state constitution stipulates that part of the money be deposited into Virginia’s Rainy Day Fund, which is projected to hold about $1 billion by fiscal 2016, up from $295 million at the end of fiscal 2010 as the state was grappling with the throes of the nationwide economic recession.

But the presentation also came on the same day lawyers for Mr. McDonnell and his wife, Maureen, met at the U.S. attorney’s office in Alexandria concerning possible criminal charges over the family’s accepting gifts and loans from Jonnie Williams, the CEO of the nutritional supplement company Star Scientific Inc.

Mr. McDonnell says he has returned all “tangible” gifts to Mr. Williams, but his attorney confirmed late last week that Mrs. McDonnell bought thousands of shares of Star Scientific stock soon after Mr. Williams gave her loans, reportedly without Mr. McDonnell’s knowledge.

Hours after Mr. McDonnell made the annual presentation to members of the General Assembly’s money committees in Richmond, attorneys for he and his wife met separately at prosecutors’ offices in Alexandria.

Neither Mr. McDonnell nor the attorneys offered comments about the case to reporters.

Former U.S. Attorney John Brownlee, one of the newer members of Mr. McDonnell’s legal team, unsuccessfully ran for the 2009 GOP nomination for Virginia attorney general against Kenneth T. Cuccinelli II. Mr. Cuccinelli is running against Democrat Terry McAuliffe to succeed Mr. McDonnell.

Mr. Cuccinelli has received $18,000 worth of gifts from Mr. Williams, some of which he disclosed only recently, saying he had forgotten to include them on past years’ reports.

But he has tried to distance himself from Mr. McDonnell’s situation by pointing out that an independent prosecutor’s report cleared him of wrongdoing. He has also said he’s not in a position to be able to just write a check to pay Mr. Williams back for the gifts, as some, including Mr. McAuliffe, have called for him to do.

Mr. McAuliffe’s campaign released a television ad Monday highlighting Mr. Cuccinelli’s “refusal to follow Gov. McDonnell’s lead” in paying back Mr. Williams.

Still, even as the approval rating for Mr. McDonnell dipped in May to 49 percent compared to a 26 percent disapproval rating, a strong plurality of voters attributed the ties to Mr. Williams as “just politics” and not a major issue.

Mr. McDonnell hit a new low in Quinnipiac’s numbers last month, with a 46 percent to 37 percent approval/disapproval split. Still, 44 percent of voters still thought he was honest and trustworthy compared to 36 percent who did not, and only 16 percent of voters said he should resign.

Eighty-four percent of voters who chose Mr. McDonnell in 2009 over Democratic state Sen. R. Creigh Deeds said they would do so again, compared to 7 percent who say they would now vote for Mr. Deeds. At the time, about half of the voters surveyed said they didn’t know enough about the situation to say whether they thought Mr. McDonnell had engaged in any wrongdoing.

Just 14 percent of voters said the ongoing scandal would make them less likely to vote for Mr. Cuccinelli in the fall. Seventy percent said it would make no difference and 10 percent said it would make them more likely to vote for the Republican attorney general.

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