Gov. Bob McDonnell was blunt: The nation's debt, he told a radio audience back in 2010, was so large that it was "immoral and unsustainable."
That year, the federal government's debt stood at $13.6 trillion, roughly six times its total annual income. Four years earlier, then Attorney General McDonnell had taken on personal debt totaling 18 times his salary — more than $2.8 million. In September 2010, just a few months before he spoke on WTOP radio, his credit card debt peaked at nearly $91,000.
Struggling to keep his head above water, federal prosecutors allege, led the former governor and his wife on a path of corruption that included soliciting loans from a businessman seeking favors from the state, then lying about that money when seeking bank loans to refinance their enormous debt.
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As the third week of the McDonnells' federal corruption trial turned to the details of their financial position, the focus shifted to what's always been at the heart of the scandal involving $165,000 in gifts and loans to the former governor and his family from Star Scientific chief executive Jonnie R. Williams Sr.: honesty.
"Politicians too easily use political rhetoric for political gains without actually checking to see if it's consistent with what they believe and put into practice in their personal lives," said Quentin Kidd, a political scientist at Christopher Newport University.
The scandal over the gifts and loans to McDonnell, a government spending hawk who has pushed for a balanced budget amendment to the U.S. Constitution, erupted when federal and state investigators began looking into allegations from a former governor's mansion chef that Williams had paid him for catering the wedding of McDonnell's daughter Cailin. (The chef revealed the payment when he was under investigation for allegedly stealing food from the mansion.)
McDonnell never disclosed that gift in his annual financial disclosure filings with the Secretary of the Commonwealth. Nor, as it turned out, had he reported $120,000 in loans from Williams to himself and a family business.
That turned out not to be much of a problem under Virginia's loose ethics laws — McDonnell said the gift was to his daughter, not to him. But when the McDonnells neglected to mention the Williams loans on applications to refinance their debt, federal prosecutors allege, they violated federal law on bank fraud.
The borrowing spree started before McDonnell took office as attorney general in January 2006.
The job paid $150,000. After his election, McDonnell bought an $835,000 house in an upscale Richmond suburb — a bit of a stretch by the usual calculators for affordability, even with the $185,000 in savings he put down. He refinanced the house in 2007 and again in 2013, borrowing an additional $46,000 as he did so.
But before that, in early 2005, he also joined with his sister to buy an 11-bedroom, 5,600-square-foot house overlooking the ocean in the Sandbridge area of Virginia Beach. It cost $1.15 million and they borrowed $920,000 to do the deal, court records show. Sandbridge Realty, which manages the property, lists the house under the name "Sunseeker."
Five months after buying the house, McDonnell's real estate venture, MoBo Real Estate Partners, arranged a $249,990 line of credit, secured by the property.
After another five months, the venture borrowed an additional $350,000 on the house, bringing the total debt burden on the property to $1.5 million. The house's assessed value at the time was $1.1 million — Sunseeker was already underwater.
McDonnell wasn't done borrowing money, though.
In March 2006, two months after arranging the third loan against the house in Sandbridge, he and his sister bought another house, this one across the street and right on the beach. Sandbridge Realty lists the second house as "East Coast Palace." McDonnell and his sister paid $850,000 for the house and borrowed $722,550 to finance the deal.
"When they got the loans they were probably playing on their position and their political situation — I think that's part of the story," Kidd said. "But another side of the story is the disconnection between personal business and political rhetoric."
University of Virginia political scientist Larry Sabato is more brusque.
"Ever heard the expression, 'Do what I say, not what I do'? It fits many politicians to a T. The difference between McDonnell and the U.S. government is that he didn't have a printing press for dollars," Sabato said.
McDonnell did have a plan.
The idea was to rent the two houses out. Sunseeker, which features a pool, hot tub and accommodations for 26, currently rents for as much as $10,875 a week in July and early August, and $3,000 a week in the off-season from the end of September to January, according to the Sandbridge Realty website. It is currently booked through mid-October and already has reservations for half of next June and most of next July. But many weeks remain available.