Dirty politics

In a normal year, the race for governor between Democrat Terry McAuliffe and Republican Ken Cuccinelli would be the top political story in the state.

But this is not a normal year. Most people are blaming it on bad politics.

At its epicenter is Republican Gov. Bob McDonnell. Federal prosecutors are investigating the gifts and loans showered on the governor’s family by Jonnie Williams Sr., CEO of Star Scientific, a dietary supplement maker based in Henrico County.  McDonnell, who maintains Star received no special treatment from his administration, says he has repaid the loans and returned the gifts. (Read more about Gov. McDonnell's gifts scandal.)

The gifts were revealed after the governor’s former chef, Todd Schneider, was charged with embezzlement for stealing food and other goods from the Executive Mansion. While he was under investigation, Schneider tipped off federal and state authorities that Williams had paid $15,000 to cover the catering bill for the wedding reception of one of McDonnell’s daughters. First reported in The Washington Post in March, revelations about Williams’ gifts to McDonnell family members continued to roll out for months.

Schneider and state prosecutors reached a plea agreement in mid-September, avoiding an October trial that likely would have caused further embarrassment to McDonnell and Republicans. (Under the agreement, Schneider pled no contest to reduced charges. He will repay the state $2,300 but face no jail time.)

But the governor’s race has been marred by more than just McDonnell’s troubles. Both candidates have engaged in shameless mudslinging, attacking the each other’s ethics.

Altogether, it’s a toxic brew that has overshadowed what the candidates say is the central message of this year’s gubernatorial contest: jobs and economic development.

Gifts to Cuccinelli
Besides McDonnell’s troubles, Cuccinelli, Virginia’s attorney general, has been further burdened by his own association with Williams and Star Scientific.

The attorney general once owned Star Scientific stock and accepted $18,000 in gifts from Williams.

Those gifts range from a catered Thanksgiving dinner for his family to vacation stays at Williams’ lakefront vacation home in Southwest Virginia, which recently has been sold.

Cuccinelli did not initially disclose $5,000 worth of the gifts he received from Williams, and he was tardy in reporting the ownership of more than $10,000 in Star Scientific stock.

But at the attorney general’s request, Richmond Commonwealth’s Attorney Michael Herring investigated Cuccinelli’s compliance with Virginia’s Conflict of Interest Act and found that no laws had been broken.

Although he initially said he could not repay the gifts, Cuccinelli said in mid-September that he had donated the cash equivalent of the gifts to CrossOver Health Care Ministry, a Richmond-area free clinic. “I did this to resolve any questions surrounding the matter concerning Star Scientific. I made the decision to send the check because it is the right thing to do, plain and simple,” he said in a video discussing the donation.

Another headache for Cuccinelli is an investigation into the actions of one of the lawyers in his office, Sharon Pigeon.
State Inspector General Michael Morehart is trying to determine whether Pigeon, while representing the Virginia Gas and Oil Board, was out of line in advising two energy companies, EQT Production Co. and CNX. They are being sued by Southwest Virginia landowners over natural gas royalties tied up in state-mandated escrow accounts.

The parent company of CNX,  Consol Energy, has donated more than $100,000 to Cuccinelli’s gubernatorial campaign.

Cuccinelli has maintained that his office has done nothing wrong.

McAuliffe’s baggage
Cuccinelli’s opponent, McAuliffe, brings his own baggage to the gubernatorial debate.

A close friend of Bill and Hillary Clinton, McAuliffe is a former chairman of the Democratic National Committee, where he became the most prolific fundraiser in its history.

He ran unsuccessfully for the Democratic gubernatorial nomination in 2009, losing a primary battle to state Sen. Creigh Deeds, who was defeated by McDonnell.

One of McAuliffe’s most recent ventures has supplied Cuccinelli with plenty of ammunition. The attorney general has lambasted McAuliffe for his involvement with GreenTech Automotive, an electric car company under investigation by the Securities and Exchange Commission.

The company’s headquarters is in McLean, but its manufacturing operations, originally intended for Virginia, are in Mississippi.

McAuliffe quietly resigned as chairman of the company in December but remains a major shareholder in GreenTech. In an Aug. 16 opinion piece in The Washington Post, he said that federal investigators had not contacted him and all he knows about the investigation has been from news accounts.

The probe involves EB-5, a federal program through which wealthy foreigners could receive permanent residency if they contribute at least $500,000 for projects that would create jobs in the U.S. 

President Obama’s nominee for deputy secretary of the Department of Homeland Security, Alejandro Mayorkas, is under investigation by the department’s inspector general for allegations  he  mismanaged the EB-5 program and gave special treatment to GreenTech and McAuliffe. He denies the allegations.

Cuccinelli also has attacked McAuliffe for saying the electric car factory site wound up in Mississippi because Virginia declined to offer any incentives. Emails from officials at the Virginia Economic Development Partnership showed their concern about GreenTech’s business model and its proposed use of the EB-5 program.

The company has struggled to get its footing, and thus far has not produced the thousands of jobs that McAuliffe once predicted.

Jobs are priority
Both candidates have identified job creation as the overriding issue in their campaigns, and they have tried to break through the headlines about McDonnell’s scandal to get their messages across.

The debate has boiled down to who would be best at creating jobs and why the other guy would be a disaster.

McAuliffe cites more than 40 years of experience creating and running businesses, starting at 14 when he earned money for college by sealing neighbors’ driveways in his hometown, Syracuse, N.Y. (Click here to read more on McAuliffe's positions on business issues)

In the mid-1980s, he helped found the Federal City National Bank in Washington, D.C., where he later became chairman after it ran into problems with federal regulators. He helped lay the groundwork for the bank to merge with Credit

International Bank. He also has been involved in numerous investment deals and venture capital firms.

To promote Virginia’s economy, McAuliffe believes the state should invest in education and transportation to create a more educated workforce and to provide companies with uncongested arteries to move their goods and allow their employees to get to work.

McAuliffe has the backing of teacher groups and the Virginia Association of Realtors.

The Democrat also would create the position of chief jobs creation officer — a role similar to the one that Lt. Gov. Bill Bolling has played in the McDonnell administration — as a single point of contact and authority.

Cuccinelli, who has focused on small-business development as part of his economic strategy, says he learned the fundamentals of business as a small business owner and partner in a Fairfax law firm.  (Click here to read more on Cuccinelli's positions on business issues)

He has been endorsed by the Virginia Farm Bureau, Virginia Police Benevolent Association and TecPAC, the political arm of the Northern Virginia Technology Council. The council itself, however, did not make an endorsement, citing the deeply divided opinions of its members.

A significant part of Cuccinelli’s plan for economic development centers on $1.4 billion in tax cuts.

He wants to put more money in the pockets of individuals and businesses to stimulate economic growth at the grass-roots level.

His plan includes lowering the personal income tax rate by 13 percent, from 5.75 percent to 5 percent, and business income taxes by a third, from 6 percent to 4 percent.

Cuccinelli has said he will pay for the tax cut in part by identifying and eliminating outdated exemptions and loopholes in the tax code that promote crony capitalism.

He also pledges to ensure that state government growth does not exceed inflation plus population growth. “Last year that would have [provided] about $400 million worth of tax relief; the prior year over $500 million with growth still going on,” Cuccinelli said at a recent public appearance.

Except in special circumstances, Cuccinelli does not have much enthusiasm for economic incentives to lure businesses to Virginia. “Incentives need to help Virginia beyond the industry targeted. It is not enough just to help that one industry,” he has said.

Using GOP voices
McAuliffe likes to quote moderate Virginia Republicans in attacking Cuccinelli’s positions.

“The way to grow [the] economy is to keep our taxes low, but unlike my opponent I’m not going to propose a $1.4 billion tax cut,” McAuliffe told a Northern Virginia forum sponsored by local business groups. “Vince Callahan, the former Republican chairman of the House Financial Appropriations Committee, talked about the disastrous effect it would have on our budget. We know where it’s most likely to come out of is education and public safety.”

McAuliffe also has invoked the name of another Republican, Bolling, who was once Cuccinelli’s rival for the gubernatorial nomination.

Citing Bolling, McAuliffe said that any governor who does away with business incentives “won’t be a jobs governor.”

The quote is from a speech Bolling gave in June to Roanoke County business leaders, in which the lieutenant governor said that the 10 to 15 percent of  business projects in the state using incentive-driven deals tend to create hundreds of new jobs.

In a written response, Cuccinelli campaign spokesman Anna Nix replied that the current tax system inhibits growth by letting the government pick winners and losers.

While Bolling has refused to endorse either candidate for governor, one of his allies, Boyd Marcus, a Republican consultant who also has advised former GOP Gov. Jim Gilmore and Republican U.S. Majority Leader Eric Cantor, recently defected to McAuliffe’s camp.

Cuccinelli recently landed his own coup when Democrat Dave “Mudcat” Saunders, who advised Mark Warner’s gubernatorial campaign and former Sen. Jim Webb’s campaign, said he’s supporting Cuccinelli.

‘Full Flop’ on coal
In portraying McAuliffe as slippery on the issues, Cuccinelli has attacked the Democrat’s position on coal mining, a major industry in Southwest Virginia. 

PolitiFact Virginia, which fact-checks statements by politicians and others, has judged that McAuliffe has made a “Full Flop” on coal, backing away from criticism of the industry four years ago.

In a Democratic primary debate in 2009, McAuliffe is quoted as saying: “We have got to move past coal. As governor, I never want another coal plant built.”

PolitFact points to a statement made by Josh Schwerin, a spokesman for McAuliffe, to The Virginian-Pilot newspaper in May, when asked to clarify McAuliffe’s position.

Schwerin is quoted as saying: “Terry believes we need to support coal workers, both through increased exports throughout the world, and workforce training to ensure that displaced workers can find new careers.”

Anti-gay? Pro-union?
McAuliffe has charged that what he has called Cuccinelli’s extreme social agenda — he says Cuccinelli once referred to gays, as “soulless human beings” — will deter businesses from locating in Virginia.

However, Bev Gray, a Northern Virginia businesswoman, believes McAuliffe, not Cuccinelli, will hurt the commonwealth’s economy.

“It’s very simple,” says Gray, president and CEO of Exhibit Edge of Chantilly, which designs, produces and manages trade show exhibits. “Ken will make it easier for me to build my business, with tax incentives and with fewer regulations.

“One of my concerns is that if Terry gets elected, he will bring unions into Virginia. Every time we have to use a union employee, that’s $14 an hour added to my bottom line.” 

McAuliffe worked extensively with unions as chairman of the Democratic National Committee and has had business relationships with union leaders. Nonetheless, in January he said at an event sponsored by the National Federation of Independent Business that he would preserve Virginia’s right to work law, considered a key advantage in competing with other states for business prospects.

Role of federal government
Cuccinelli and McAuliffe have widely different views about the role of government in job creation.

“As governor, I want to go up to the federal government and get as much money as possible,” McAuliffe said recently.

Cuccinelli, however, is skeptical of government involvement in the economy.

“The private sector is in control of what’s best for them, not your governor or your government,” Cuccinelli said, in speaking of economic policy and the private sector’s ability to create jobs.

He also didn’t like the idea of a large state government.

“The role I believe the governor most appropriately can play is to rein in state government so that our struggling businesses have what they need to invest in diversification so they can stay here,” Cuccinelli says.

Transportation
An article of faith among many business leaders, especially those in heavily congested areas such as vote-rich Northern Virginia and Hampton Roads, is that improving the state’s transportation means improving the climate for business.

McAuliffe has leapt on the issue to draw a sharp contrast between his position on the $6 billion transportation-funding bill that passed in the last session of the General Assembly and the stance that Cuccinelli took on the proposal.

“I supported the plan because it was critical for our future. And I urged Democrats to put aside partisanship in support of the plan,” McAuliffe said. “My opponent, Ken Cuccinelli, opposed the plan, opposed it for ideological reasons. And he led the Tea Party opposition to the plan.

“A modern, efficient transportation plan … is an issue of business competitiveness and an issue of quality of life when Northern Virginia families are spending 67 hours [annually] stuck in traffic,” McAuliffe said.

He was quoting a statistic from the Texas A&M Transportation Institute, which in 2013 rated Northern Virginia’s congestion as the worst in the nation.

Cuccinelli told the same audience that though he opposed the transportation plan, he would fully implement it “in the spirit in which it was passed,” if he is elected governor.

He added that reforming the Virginia Department of Transportation is one of his top priorities, if he wins the governorship.

“I think more needs to be done in terms of involving the regions and localities in the control of the money and how it’s spent,” Cuccinelli said.

More mud ahead
If the last days of the gubernatorial campaign are similiar to  what has been happening so far,  voters can expect to see more mud slinging. Here is a taste of some of the character attacks thus far.

Cuccinelli on McAuliffe: 

• “He’s the person who invented the scheme to rent out the Lincoln Bedroom and proudly bragged about selling seats on Air Force One for political donations.
• “He’s an unindicted co-conspirator in a union election money-laundering case. He has famously given over a million-dollar gift loan to the president of the United States.”

McAuliffe on Cuccinelli:

• “He’s the true Trojan horse of Virginia politics. You come in pretending to be one thing, and you end up being something else.
• “He can stand up here and talk about jobs and transportation. [But] he’s done nothing but hurt jobs, try to stop transportation and led a very social ideological agenda against women’s health and gay Virginians.”

Stephen Farnsworth, director of the Center for Leadership and Media Studies at the University of Mary Washington, says this election is “tailor made for people who like their politics ugly.”

One of the big questions about this contest is whether voters will be so turned off that they decide to stay home.

A small turnout typically favors Republicans, who swept the state’s top offices in 2009 when less than 40 percent of registered voters went to the polls.

Democrats are working hard to produce a large turnout. More than 70 percent of the electorate voted in the 2008 and 2012 presidential elections when Virginia landed in Barack Obama’s column.

“One of these guys is going to be elected,” Farnsworth says with a sigh. “But I don’t think the electorate is going to be happy with either one.”