Company In Bob McDonnell Scandal Settles Tax Bill With Virginia

The company whose CEO has been at the center of Virginia Gov. Bob McDonnell’s (R) gifts scandal has agreed to pay the state more than $900,000 in back taxes. 

The Washington Post reported on Wednesday that the company, Star Scientific, reached a settlement with the state in November, and will now avoid a trial that was scheduled to begin Friday. The deal resolves a dispute that began in 2002, when Virginia levied a tax bill of more than $700,000 on tobacco curing barns owned by the company. The company, which now focuses on the production of dietary supplements, filed a lawsuit in 2011 contesting the bill. 

“Given the Company’s expanded focus in the pharmaceutical and biotech areas, we thought it was in the Company’s best interest to resolve this matter at this time and focus our resources on our core business as we continue with the transition that is currently underway,” Star Scientific spokesperson Talhia Tuck told the Post in a statement. 

The relationship between McDonnell and Star Scientific CEO Jonnie Williams has been the subject of an ongoing federal investigation. Williams gave McDonnell and his family more than $150,000 in gifts and payments in recent years, during the same period that McDonnell and his wife, Maureen McDonnell, took steps to support the company. The McDonnells repaid and returned Williams’ money after their ties to the businessman became a scandal earlier this year.

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Eric Lach is a reporter for TPM. From 2010 to 2011, he was a news writer in charge of the website?s front page. He has previously written for The Daily, NewYorker.com, GlobalPost and other publications. He can be reached at ericl@talkingpointsmemo.com
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