Gannett Co. Inc. announced Tuesday it has completed the acquisition of digital marketing firm ReachLocal for $156 million.
The McLean-based company, which owns USA Today and newspapers in more than 120 markets, said the acquisition will increase Gannett’s digital revenues by 50 percent and approach $1 billion in 2017.
“We expect that in its first full year of operations following the acquisition, ReachLocal will be approximately neutral to our earnings per share, and slightly accretive in the second full year,” Robert Dickey, Gannett president and CEO, said in a statement.
Gannett bought the company for $4.60 per share.
Raptor Merger Sub Inc., a Gannett subsidiary, will merge with ReachLocal.
Gannett has made several acquisitions since the company divided its print and television businesses in 2015.
Earlier this year, Gannett purchased Journal Media Group’s 15 daily newspapers. Last year, the company purchased Romanes Media Group, a newspaper chain with publications in Scotland and Northern Ireland, and the remaining interest in a Texas-New Mexico Newspapers Partnership, which it previously only partly owned.
The New York Post reported last week that Gannett was preparing a formal takeover bid of Tribune Publishing Co., now known as Tronc, which rejected a $864 million bid in May.
Dollar Tree Inc. announced Wednesday it is spending $110 million to expand its headquarters in Chesapeake and add 600 new jobs over the next six years.
“Dollar Tree has seen tremendous growth over the past 30 years,” Dollar Tree CEO Bob Sasser said in a statement. “We have grown from a small company to a leading retailer with more than 14,000 retail stores across North America. To facilitate our continued growth, we are investing in the expansion of our corporate facilities. Chesapeake will be our center of growth for services shared across the entire corporation.”
Virginia competed with North Carolina for the project, which in addition to the 600 new jobs retained 825 jobs in Chesapeake.
Gov. Terry McAuliffe approved a $4 million grant from the Commonwealth’s Opportunity Fund and a $5.3 million from the Virginia Economic Development Incentive Grant (VEDIG), which includes performance-based incentives Virginia offers to large companies who offer a significant number of jobs with high-paying wages.
The company also will receive benefits from the Port of Virginia Economic and Infrastructure Development Zone Grant Program. Dollar Tree will also be eligible to receive funding and services to support the company’s employee training activities provided through the Virginia Jobs Investment Program.
After working several years as an orthodontic assistant, Sara Falzone was ready to advance her education and change her career.
In 2012, then living in Hampton Roads, she started classes at Thomas Nelson Community College to study business. She’d previously taken some courses at Rappahannock Community College and earned a dental assistant certification from a technical center in Virginia Beach.
Falzone then decided she wanted to pursue a bachelor’s degree.
“As I grew as a person I realized that I was not only capable of more, but I deserved more,” says Falzone, now 27. “That was what sparked me wanting to go back to school was realizing this potential that I had.”
Equipped with a bundle of community college credits, she was eager to transfer to Virginia Commonwealth University.
The timing seemed right. She and her husband were moving to Richmond so that he could attend VCU. She had discovered an interest in marketing, and the university offered a wide array of classes in that field.
Nonetheless, an hour on the phone with an adviser at VCU’s Transfer Center changed her plans.
The adviser encouraged Falzone to complete her associate degree at J. Sargeant Reynolds Community College before transferring. That move would save her money and provide for a smoother transition, the woman advised.
So Falzone started classes at a third community college, taking a year to complete her degree requirements. “It was really helpful because I could transfer in as a junior,” says Falzone. “There are a lot of classes you can lump together with your associate degree so you don’t have to take some of the earlier requirements.”
Using scholarships and grants and her own contributions, Falzone left community college with just $5,000 in student loans and expects to have an additional $25,000 of debt after graduating from VCU.
Virginia’s higher education leaders want to reach more community college students like Falzone, encouraging those wanting to transfer to four-year universities to earn associate degrees first. Right now, only about one-third of these transfer students do that.
Studies show students who transfer with associate degrees can save money and are more likely to graduate on time.
“Time is an enemy when students pursue postsecondary credentials, and the longer it takes them to reach the finish line, the less likely they are to do so,” says Jeff Kraus, assistant vice chancellor for public relations for the Virginia Community College System (VCCS). “So, for the sake of their pocketbooks and their student loan debt and for the sake of our institutions, we want everyone moving as efficiently as possible to the finish line.”
Transfer agreements
A new study from the State Council of Higher Education for Virginia (SCHEV) supports the community college system’s concerns. Some Virginia students are taking an unnecessarily long and expensive path to earn four-year degrees.
Virginia, however, has been trying to smooth the transition between two-year and four-year schools, establishing a more affordable way to earn a bachelor’s degree.
In 2006, Virginia passed the Higher Education Restructuring Act, which gave Virginia’s public colleges and universities more autonomy but also required them to create better pathways for students transferring from Virginia’s two-year schools.
The result was the creation of Guaranteed Admissions Agreements (GAAs) between universities and community colleges.
The VCCS now has 27 GAAs between Virginia’s two-year and four-year institutions. The agreements outline specific course requirements and GPAs students must achieve to receive guaranteed transfers.
GAAs were heralded as a way to save almost one-third the cost of earning a bachelor’s degree. In the ideal “2+2” scenario, a student would spend two years at a community college and then two years at a four-year school.
The potential savings are substantial.
The 2+2 scenario could save students an average of $14,000 in tuition depending on which institution they transfer to, according to the SCHEV study. That could increase to savings of more than $18,000 using the Two-Year College Transfer Grant program, which provides additional aid for transfer students demonstrating financial need.
Few students, however, are using the 2+2 pathway — and many are taking significantly longer than two years to graduate once they have transferred, according to SCHEV. “We know most students don’t do it on a two-plus-two scenario, and we know that they lose a tremendous economics savings by not doing that, and yet they still do it,” says Joe DeFilippo, SCHEV’s director of academic affairs and planning.
The SCHEV study found that 18 percent of students who transferred with an associate degree during the 2009-2010 school year were taking an additional four years to complete their bachelor’s degree.
For students graduating community college without a degree but transferring with 16 to 30 credits, that number rose to 23 percent, with another 8 percent taking five years to graduate.
SCHEV is considering researching the issue further, potentially with additional studies. “My biggest interest would be to try to identify the factors that we could get a larger number of students to take advantage of the savings that are available to them, because those savings are very, very substantial,” says DeFilippo.
Performance-funding standards
Virginia’s community colleges have noted the same trends outlined in the SCHEV report.
Each year about 22,000 students transfer for the first time from Virginia’s community colleges to Virginia’s public and private four-year schools and out-of-state institutions. About one-third of those transfer students have completed an associate’s degree.
So VCCS, which oversees Virginia’s 23 community colleges, is working with its schools to encourage students to complete their associate degrees before transferring and use the GAAs if possible.
“We have data showing they’re more successful once they get to the university,” Kraus says of students who use GAAs and complete their associate degrees before transferring. “We know that more of their credits transfer properly … and we know that in building a foundation of success at the community college they are stronger students and succeed better once they arrive at the university.
“There are some that chose to move earlier, and there’s a price they are paying for that. And it’s an unnecessary price.”
So with a goal to triple the number of credentials and degrees awarded by Virginia’s community colleges by 2021, the community college system is tying some state funding for community colleges to student success.
Twenty percent of a community college’s funding from the state is now determined by outcome measures. Among other measures, these include degree completion, associate degrees awarded before students transfer and the completion of a bachelor’s degree requirements by former VCCS students.
“We have a lot of students who transfer prior to completion of any sort of certificate or degree,” says Catherine Finnegan, assistant vice chancellor for institutional effectiveness with the VCCS. “What we find is those students probably have an idea that they want a bachelor’s degree, but they might not be clear on what that goal is, and we also find they don’t succeed in completing a bachelor’s degree in a level that we think is acceptable.”
For the past year, the community colleges have been creating plans to improve degree and credentialing completion. The goals include better career exploration for students at the beginning or their academic careers, better advising and better technology to do both.
This year the budget passed by the General Assembly provided additional funding for the new standards and for upgrading technology to help students explore their career plans earlier. “We want them to understand what the job opportunities are, what the costs of the lifestyle they want are and what sort of degree or credential it would take,” says Finnegan. “Knowing where you want to end up helps in that planning, and it also helps your advisers to provide you with better information.”
Virginia’s transfer magnets
For their part, some of Virginia’s four-year colleges have made it a major part of their mission to attract transfer students. Together, George Mason University, Old Dominion University and VCU attract two-thirds of all students transferring from two- to four-year public institutions.
“There is a strong relationship between the Virginia Community College System and Mason,” says David Burge, vice president for enrollment management at GMU. “We want transfer students here, and I don’t believe that message is universal [among all Virginia colleges].”
George Mason University accepts the most transfer students of any of Virginia’s public institutions — more than 3,000 a year — making up about 27 percent of those transferring from a two-year to a four-year public school, according to SCHEV research.
Schools like Mason, VCU and ODU have recruitment and advising services for transfer students to help students before and after the transition. The universities are encouraging their students to complete school as efficiently as possible, while recognizing that transfer students often lead very different lives than students starting their four-year degree right out of high school. “They often have part-time jobs, or they have a family, and they need to live at home or in the apartment they have,” says Seth Sykes, an associate vice provost for the Division of Strategic Enrollment Management at VCU.
In Northern Virginia, George Mason, Northern Virginia Community College and eight K-12 public school systems work together in a program called Pathway to Baccalaureate. The nationally recognized program helps students from challenging backgrounds transition from high school to community college and then on to complete a degree at Mason.
In addition to recruiting transfer students, ODU holds socials such as Transfer Tuesdays to connect transfer students, prospective students and professors. “These aren’t your typical students,” says Sandy Waters, ODU’s executive director for advising and transfer programs. “Our average transfer student is 28. They are typically commuter students who are working or raising a family.”
The university, which takes about 20 percent of the state’s transfer students each year, has established a number of ways to help transfer students, including offering online classes and a letter of intent that allows students to lock in ODU’s current requirements to ensure their credits transfer.
All three schools are launching campaigns to encourage all students — including transfer students — to take 15 credits a year to help them graduate on time.
“I would say the biggest benefit to getting out in four years is financial,” says Sybil Halloran, also an associate vice provost of VCU’s Division of Strategic Enrollment Management. “The longer you’re in school, you’re not only paying for that school, but you’re not in a full-time job. You could be taking out additional loans. The longer you’re in school, the more money you’re spending.”
For her own path, Falzone is taking VCU’s advice — again — to heart.
Even though she still works 30 hours a week as a digital marketing assistant at a car dealership in Henrico County, she’s on track to graduate next May, two years after she transferred to VCU.
To manage competing activities, she’s using night classes and summer and winter sessions to earn required credits. In addition to the time spent at work and school, she’s also joined organizations, including VCU’s Business Student Ambassadors and the VCU chapter of the American Marketing Association, where she serves as vice president.
Falzone admits that the transition to VCU wasn’t easy — the large lecture classes and testing style took some adjustment. She also faces a bit of a generation gap with younger students.
But without the ability to spend part of her education at community college, a bachelor’s degree would have been out of her reach. “I wouldn’t have been able to afford four years at a university,” she says. “Now I’m at a university that is more expensive, and starting in community college has made it possible for me. It wouldn’t have been possible otherwise.”
Hillary Clinton announced Friday evening she has picked U.S. Sen. Tim Kaine to be her vice presidential running mate.
Kaine, who was elected to the Senate in 2012, is expected to benefit Clinton’s campaign with his low-key campaigning style, honest reputation and fluency in Spanish. When he was a student at Harvard Law School, he took a year off to attend a Catholic mission in the Honduras.
He also hails from Virginia, which has become a key battleground state in presidential contests.
Kaine started his political career as a Richmond City councilman. He later served as mayor of Richmond, lieutenant governor of Virginia and was governor of Virginia from 2006 until 2010.
Kaine was chairman of the Democratic National Committee from 2009 until 2011, giving him national exposure.
He defeated George Allen, a former Virginia governor and a former U.S. senator, for Kaine’s current Senate seat in 2012.
Kaine, an early supporter of Barack Obama’s presidential bid, was vetted by Obama as a potential running mate before he picked Vice President Joe Biden.
Virginia Business has covered Kaine throughout his political career, including a Q&A interview with him last year.
Here’s some other coverage of Kaine over the years:
· In a 2015 opinion column Editor Robert Powell reflects on the possibility that Kaine could become vice president (and who could fill his Senate seat);
· Special Projects Editor Veronica Garabelli attended an April 2015 roundtable with Kaine on the potential benefits of the Trans-Pacific Partnership for Virginia businesses;
· Powell’s 2014 column focuses on an entrepreneurship roundtable Kaine attended;
Virginia Business interviews the governor of Virginia each year. Here are just some of the stories we published during Kaine's governorship:
· January 2009 interview with Kaine, where he talks about budget cuts and reflections on his future;
· A story in our January 2009 issue included comments from Kaine about the historic shift in Virginia’s voting pattern following Obama’s election.
Evatran Group Inc. is entering the Chinese market.
The Richmond-based company announced Thursday it is forming a joint partnership with Zhejiang VIE Science and Technology to integrate its Plugless power system into electric vehicles in China.
The joint venture, created with an initial investment of $5 million, expects the Plugless EV charging to be in series production and commercially available with a China-based manufacturer in 2017.
“China is the fastest growing EV market in the world, and we see tremendous opportunities in bringing Plugless technology to the market,” Evatran CEO Rebecca Hough said in a statement.
Plugless is the first and only wireless electric vehicle charger available for purchase by electric vehicle drivers. In March 2014 Plugless EV charging became available to electric vehicle owners across the United States and Canada.
Currently, Plugless supports 3.3kW charging for Chevy Volt, Nissan LEAF and Cadillac ELR electric vehicles.
In 2008, the founders of SUNRNR of Virginia Inc. began a business in the Shenandoah Valley selling portable, solar-powered generators.
The three executives believed Americans’ growing appetite for clean energy would fuel demand for the generators, which can be used as backup power or as off-grid energy sources.
What the founders didn’t foresee at first was the product’s potential market abroad — particularly on islands or in rural areas where power sources can be unpredictable.
“It’s not that Africa is necessarily looking for green products, but they just need power,” says Jenny French, president of SUNRNR, who leads the business with her husband, Scott, and Alan Mattichak, the inventor of the generators.
Today, the Shenandoah-based company sells generators in countries such as Angola, Ghana, Morocco and Japan. In the Republic of Palau, an island nation in the western Pacific Ocean, the generators are used to power circulation pumps for a fish hatchery. Last year, the company’s generators arrived in the Bahamas just days before Hurricane Joaquin struck. One generator was sent to power a health clinic in a region that had been without power for seven days.
French has used a range of local, state and federal export-assistance programs to build overseas sales for SUNRNR. She has even served on an exporters roundtable at the White House.
All along the way, she’s received help from the International Trade division of the Virginia Economic Development Partnership (VEDP), including a recent grant she used for a trade mission to the Canary Islands and the translation of company documents into Spanish.
Business leaders and government officials believe thousands of Virginia companies also could find potential markets abroad — a move which could be particularly helpful to the state economy in the face of federal budget cuts.
“We cannot make ourselves as vulnerable as we were four or five years ago when we lost about $9.8 billion in direct spending from the Department of Defense,” Gov. Terry McAuliffe said during a May speech to the Virginia International Business Council in Richmond. “We’ve got to become less reliant [on federal spending], and we can only do that through international trade.”
And so the commonwealth is putting an emphasis on developing exports with new programs, additional funding and the creation of an entity dedicated to international trade — the Virginia International Trade Corp. (VITC).
A new focus on trade
For years, Virginia’s business community has sought ways to increase exporting opportunities. “We have been looking at international trade as an important feature of transitioning into a new Virginia economy,” says Barry DuVal, president and CEO of the Richmond-based Virginia Chamber of Commerce. “We recognize that 95 percent of the world’s population lives outside the U.S., and providing more tools for businesses to export their products and services will provide more opportunities in the world market.”
VEDP’s International Trade division now houses Virginia’s export-assistance programs, which have received rave reviews from many companies. “I haven’t run into another government organization that acts more like a consulting firm than VEDP,” says Joe Fluet, CEO of Momentum Aerospace Group, a firm that provides aerial surveillance to the U.S. government. The company recently expanded internationally, exporting to the United Arab Emirates, the Philippines, Canada, NATO and the United Nations.
The Woodbridge-based company graduated earlier this year from VEDP’s Virginia Leaders in Export Trade (VALET), a two-year program designed to increase participants’ international sales. “We were treated like clients. They were responsive and tried to go above and beyond and cared a lot about whether I was happy or satisfied with their services,” says Fluet.
The effectiveness of state export programs encouraged some of Virginia’s largest business associations to lobby this year for the creation of a separate group dedicated to developing trade.
VITC, they believe, will provide additional exposure to the state programs, encouraging more companies to explore foreign markets and allowing easier integration with local and federal trade programs. “When we looked out into the future, we thought that the most important economic development resource that would help the largest number of small and medium-sized manufacturers that the state would play a role in was trade,” says Brett Vassey, president and CEO of the Virginia Manufacturers Association. “We thought the best way was to develop a trade corporation around a very practiced and proven model [with] a laser focus on trade.”
The VITC, approved by the General Assembly this year, is scheduled to officially become a separate entity next April. Until then, business groups are helping Maurice Jones, Virginia’s secretary of commerce and trade, develop a business plan. The agency will be governed by a 17-member board of directors, including five cabinet secretaries and 12 citizens appointed by the governor.
After Senate Finance and House Appropriation committees review and approve the business plan, the governor and board will appoint VITC ‘s CEO by Dec. 1.
Investments in trade
The General Assembly also is giving the state’s trade programs a financial boost, which is especially important as some federal grants expire.
The state budget includes $1.5 million each year to continue Virginia’s Going Global Defense Initiative. That program, originally supported by a federal grant, is designed to help defense contractors hampered by lower federal spending find new markets abroad.
The state money will allow the popular program to continue, says Paul Grossman, VEDP’s vice president of international trade. Typically, funding is “sold out” within 60 to 90 days after the start of each fiscal year.
Another $400,000 from the state will double to $30,000 the money each company in the state’s VALET program can use to help with exporting expenses. The increase reflects the growing cost of doing business, says Grossman, and the desire of many companies to market their products in more than one country.
The budget also provides $250,000 a year to help companies market their products at international trade shows.
Another $1 million each year will support the Virginia International Trade Alliance (VITAL), which began in July 2015. The program encourages trade associations to promote Virginia’s export programs to their members. The partnership already is bringing in more clients to the VEDP, including some small craft breweries looking at export opportunities.
VITAL also includes Virginia’s public universities, which work with companies to develop international market research. In just a year, about 30 companies have been paired with colleges’ research teams.
That collaboration provides an ancillary benefit, says Grossman. “Now you have kids who are coming through college who have developed the skillsets so they are prepared to work for a company doing business internationally.”
Investment in the Port of Virginia also is expected to be a major boon to international trade efforts. The General Assembly this year approved a $350 million bond issue to increase the capacity of Norfolk International Terminals, the port’s largest marine terminal.
David White, vice president of the Virginia Maritime Association, says this commitment, combined with the creation of a dedicated state marketing arm for exports, will reverberate in overseas markets. “Elevating the stature of trade activities in the commonwealth, I think, sends a message to the global marketplace that Virginia is trade friendly,” White says. “Anything we can do to move more cargo through those facilities only hastens the return on investment coming through the port.”
In addition to state programs, local export-assistance programs are being promoted by cities such as Norfolk and regional development groups such as the Virginia Coalfields Economic Development Authority and the Greater Richmond Partnership. “All of this is converging at the same time, and it’s not by accident,” says Vassey. “It’s really a group of us that have been working in earnest to develop a multi-tier export development network.”
Agricultural exports
Virginia also is making a major export push for agricultural and forestry products. Today, 30 to 35 percent of Virginia’s farm income results from exports.
Virginia began marketing its agricultural products aggressively under former Gov. Bob McDonnell, says Todd Haymore, Virginia secretary of agriculture and forestry, who has served two governors in that post. Since 2010, Virginia has moved up from fifth to second among the East Coast’s largest agricultural exporting states.
Haymore says McAuliffe wants Virginia to overtake Georgia to become No. 1 on that list. “[This year] the governor was as aggressive as we’ve ever been in providing even more resources and manpower to provide export enhancement,” says Haymore.
To that end, this year’s budget includes $850,000 in new funds to develop agricultural exports, including two additional export representatives in Richmond and two new trade representatives in North Africa and Southeast Asia. New money also is available for “reverse trade” missions, bringing potential customers to Virginia.
While new initiatives remain under the agriculture department’s purview, Haymore will be required in November 2017 to explain how and whether VITC will integrate any of its exporting services.
The case for trade
In the current presidential campaign, trade is getting much different play. Presumptive nominees Hillary Clinton and Donald Trump both have denounced the current Trans-Pacific
Partnership (TPP) as a potential job killer for the U.S. TPP is a trade agreement supported by President Obama involving 12 Pacific Rim nations. Congress still must ratify the deal.
Virginia’s business leaders support the TPP. “[TPP] includes the elimination of 18,000 taxes on exports,” says DuVal with the Virginia Chamber. “It will level the playing field for American companies to compete in the markets, and it supports good-paying jobs in America and Virginia.”
To boost its state and federal lobbying efforts, the Virginia Chamber of Commerce last year commissioned a study highlighting exports’ effects in the commonwealth.
The first-of-its kind analysis shows that exports made up 30 percent of Virginia’s gross domestic product (GDP) growth between 2009 and 2014. It also reveals that exports generated almost 320,000 jobs (about 8.5 percent of state employment) with an average annual income of $58,333. “The importance of exports to Virginia and America is often overlooked,” says DuVal. “At the state and national level, we want policymakers to understand the facts, and we think our study helps underscore the importance of exports to the Virginia business community and the sub-regions outside the metro areas.”
The study, conducted by McDearman Associates LLC and the Raymond A. Mason School of Business at the College of William & Mary, highlights the importance of international trade in Virginia’s less-populated regions.
While Virginia’s urban areas are involved in 60 percent of the commonwealth’s total exports, international trade made up a greater share of local economies in areas with smaller populations. For example, Bristol’s “export intensity” was 17.2 percent in 2014, while exports made up 6.2 percent of Northern Virginia’s economy.
“Virginia has two great problems that it constantly has to work on,” says Jones, the secretary of trade and commerce. “One, it is too dependent on public-sector growth, and two, the need for more balance and growth among its regions.
“The international trade space is the one solution to both of those problems,” he says.
Frontier Secure is planning to open a customer care center in Wise County, creating up to 500 new jobs.
Frontier Secure is a division of Stamford, Conn.-based Frontier Communications Corp., which provides communications services to customers in 29 states. Frontier Secure helps home and small business customers with a variety of digital communications services, including high-tech products, identity protection, computer security and new applications for the “Internet of Things.”
The customer care center will provide customer and technical support for its clients.
Virginia competed against Connecticut, Kentucky, Tennessee and West Virginia for the project.
The Virginia Coalfield Economic Development Authority approved a $5.6 million loan to the Wise County Industrial Development Authority to secure the deal. The Virginia Tobacco Region Revitalization Commission approved $2 million for the deal.
The center will be located at 10431 Pinnacle Drive, and the company's first training class will begin August 14 with 50 employees.
Carter Bank & Trust has promoted a longtime employee to become president of the Martinsville bank.
Phyllis Q. Karavatakis, who has been employed with Carter Bank & Trust for 38 years, most recently served as executive vice president and chief lending officer.
She received an associate degree from Ferrum College and a bachelor’s degree in business administration from the University of Richmond. She also is a graduate of the Virginia Bankers Association School of Bank Management at the University of Virginia.
Karavatakis currently serves on several boards, including The Launch Place in Danville, Ferrum College and the Virginia Bankers Association School of Bank Management. She also is a former chair of the Martinsville-Henry County Chamber of Commerce and is a founding member of the Martinsville-Henry County Chamber’s Partnership for Economic Growth.
Pittsburgh-based Dollar Bank announced Tuesday it will acquire Virginia Beach-based Bank @Lantec.
Both banks are mutual banks, owned by depositors rather than shareholders. The boards of directors at both banks have approved the merger, which is expected to close in the fourth quarter of 2016.
Dollar Bank will retain all Bank @lantec employees and will continue to operate all four of Virginia’s branch offices. Susan Ralston, president and CEO of Bank @Lantec, will lead Dollar Bank’s Virginia operations as senior vice president and chief operating officer.
“This merger will further advance the position of having a stronger mutual institution available as an option to compete with national stock-based banks in this region,” Ralston said in a statement.
Dollar Bank is the largest independent mutual bank in the country with assets of more than $7.4 billion. Post merger, its assets would growth to more than $7.5 billion. The bank currently has more than 60 locations in the Pittsburg and Cleveland metropolitan areas.
Jim McQuade, president and CEO of Dollar Bank, said Dollar Bank is looking to acquire smaller mutual banks.
“We want to use our significant financial strength to expand our footprint in both markets we currently serve as well as new markets, when appropriate to offer customers what we believe is the purest form of community banking,” McQuade said.
In a unanimous decision, the Supreme Court Monday reversed former Virginia Gov. Bob McDonnell’s 11 federal corruption convictions in a case that could have wide-reaching implications for what defines public corruption.
“I express my heartfelt gratitude to the justices of the United States Supreme Court for the time and attention they have given to the law in my case,” McDonnell said in a statement. “Today, a unanimous United States Supreme Court Vacated my convictions, and it is a day in which my family and I rejoice and give thanks.”
The ruling vacates the judgment from the Fourth Circuit Court of Appeals and remands it back to the court, which will have to decide whether the case could be re-tried given the Supreme Court’s new, more narrow definition of “official acts,” says Hank Chambers, professor of law at the University of Richmond.
If the court determines that there is sufficient evidence to convict McDonnell under the new definition, federal prosecutors could then decide whether to re-try the case. The court also could dismiss the charges.
“The Supreme Court certainly narrowed the scope of what is an official action in a way that severely and tremendously undercuts the Department of Justice’s arguments,” says Chambers. “So it’s going to be tough for the Fourth Circuit to say that the jury could have come to this conclusion given the new definition of ‘official acts,’ and it’s going to be really tough for the Department of Justice to fight this thing again.”
In the opinion, the Supreme Court ruling now says that “something more” than setting up a meeting, hosting an event or calling another official is required to qualify as an “official act.”
The government’s case said McDonnell did all three actions for businessman Jonnie Williams in exchange for more than $175,000 in gifts and loans. Williams wanted the state universities to conduct studies on its anti-inflammatory dietary supplement, Anatabloc.
“The government’s expansive interpretation of ‘official act’ would raise significant constitutional concerns. Conscientious public officials arrange meetings for constituents, contact other officials on their behalf, and include them in events all the time,” the Supreme Court opinion states.
The justices say that an “official act is a decision or action on a ‘question, matter, cause, suit, proceeding or controversy.’” And this “must involve a formal exercise of governmental power that is similar in nature to a lawsuit before a court, a determination before an agency, or a hearing before a committee.”
Chambers says the court’s more narrow definition of official acts will make it more difficult for the government to prosecute corruption cases.
“If you’re required to get the kind of evidence that the Supreme Court seems to want to require, then you’re really going after the dirtiest of the dirty,” says Chambers.
The court’s opinion conceded that the McDonnell case was “distasteful,” but the government’s interpretation of “official act” was too broad: “There is no doubt that this case is distasteful; it may be worse than that.
“But our concern is not with tawdry tales of Ferraris, Rolexes, and ball gowns. It is instead with the broader legal implications of the Government’s boundless interpretation of the federal bribery statute. A more limited interpretation of the term “official act” leaves ample room for prosecuting corruption, while comporting with the text of the statute and the precedent of this Court.”
McDonnell has been free on bond since his January 2015 sentencing, while his case was being appealed. U.S. District Judge James R. Spencer sentenced McDonnell to two years in prison after a jury convicted him on 11 counts of corruption.
A Fourth Circuit Court of Appeals upheld McDonnell's conviction, but he then appealed to the Supreme Court.
McDonnell became the first Virginia governor ever to be convicted of a felony.
For her role in the scandal, former first lady Maureen McDonnell was sentenced to a year and a day in prison. Her prison sentence likely will be changed due to the Supreme Court’s ruling.
McDonnell’s conviction ruined what looked like a promising political future for McDonnell.
He was considered in 2012 to be a vice presidential pick for Republican presidential candidate Mitt Romney.
He reached a major political milestone in the 2013 General Assembly session following that election. With bipartisan support, he secured passage of a $6 billion comprehensive transportation funding bill, an achievement that had eluded his predecessors for 27 years.
Just weeks after the 2013 General Assembly session ended, a story appeared in The Washington Post revealing that Williams had paid for the Executive Mansion wedding reception for one of McDonnell’s daughters.
The story began a 10-month chronicle of revelations about gifts and loans showered on the McDonnell family by Williams, whose struggling company had switched from tobacco products to making dietary supplements. The scandal eventually led to the federal indictment of McDonnell and his wife, Maureen, shortly after the governor stepped down at the end of his four-year term.
Reactions from politicians around Virginia began to trickle in on Monday:
Former Virginia Gov. Bob McDonnell:
“I express my heartfelt gratitude to the justices of the United States Supreme Court for the time and attention they have given to the law in my case. Today, a unanimous United States Supreme Court Vacated my convictions, and it is a day in which my family and I rejoice and give thanks.
From the outset, I strongly asserted my innocence before God and under the law. I have not, and would not, betray the sacred trust the people of Virginia bestowed upon me during 22 years in elected office.
Over this past 40 months, God strengthened and comforted me through the love and many support of friends, family, and even strangers, through His abundant, miraculous and amazing grace, and through the eternal truths of His holy word.
I am exceptionally grateful to my faithful legal team who zealously advocated my cause at every step, as well as the authors and signers of the 13 excellent amicus briefs that argued for reversal. I thank the many friends and relatives who steadfastly supported my family and me through this time of great uncertainty. Countless people have called, emailed, texted, and came to see me to lend a wise piece of advice, a message of hope, a heartfelt prayer, or a hug. These multiple acts of kindness have become the new tapestry of my life, and have given me a vivid and indelible example of Jesus' admonition to live by the Golden Rule.
It is my hope that this matter will soon be over and that my family and I can begin to rebuild our lives.”
House Speaker William J. Howell:
“The strength of the American legal system is measured not by the guilty convictions it levies, but instead by the innocence it preserves. I am relieved for Bob, his family and the Commonwealth of Virginia. Bob will be the first to tell you he takes responsibility for his actions, but he is a good man with an honest heart. I have always been proud to call him my friend. Throughout this process, and even in the darkest hour, the depth of Bob’s character was on full display. His faith never wavered. He was a source of strength to his family. And he lifted the spirits of his friends and supporters when we should have been lifting his. Above all, his belief in the justice system persevered. That belief, and Bob McDonnell, were vindicated today.”
Del. Scott Lingamfelter
“I am delighted to learn that my friend Bob McDonnell received such an overwhelming verdict from the Supreme Court. I believe this case was legally flawed from its inception. My best wishes are with Bob and his family, who have endured this torturous process for many months. My prayers and fondest hopes are with his family as they reassemble their lives.”
Citizens for Responsibility and Ethics in Washington (CREW)
“Gov. Robert McDonnell accepted nearly $200,000 in cash and luxury goods, including a Rolex watch and flights in a private jet, in exchange for using the Governor’s office to help a business. The Supreme Court today held that although the Governor and his aides took action—with state resources—on behalf of the business, those actions do not go far enough to constitute “official actions” without prosecutors proving still more, creating an additional hurdle before corrupt conduct is considered illegal. This narrow reading of the law will seriously impede law enforcement’s efforts to clamp down on corruption. The Supreme Court essentially just told elected officials that they are free to sell access to their office to the highest bidder. If you want the government to listen to you, you had better be prepared to pay up.”
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