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Virginia AG to Recuse Office in Star Scientific Tax Suit

Thu, 04/04/2013 - 11:44pm
BOB LEWIS - AP Political Writer - Associated Press

Attorney General Ken Cuccinelli will announce the hiring Friday of an outside law firm to represent the state in a tax lawsuit filed against Virginia by a company in which Cuccinelli has investments.

The announcement by the presumptive Republican gubernatorial nominee follows reports by The Associated Press and the Washington Post detailing Cuccinelli's interests in Star Scientific Inc.

The struggling maker of nutritional supplements represents Cuccinelli's lone stock holding with a value estimated at $10,000 to $50,000, according to Cuccinelli's statements of economic interest.

He also reported personal gifts from the company's chief executive officer, Jonnie Williams, worth about $13,000. That includes a $6,000 box of food supplements, a $3,254 trip to Kentucky and the use of a lake house and boat valued at $3,000, and lodging at Williams' home a few miles beyond Richmond's westernmost suburbs.

The company sued Virginia over a disputed $700,000 tax bill in 2011. Cuccinelli's office is defending the state Department of Taxation, despite his appearance of a conflict of interest. The case has sat dormant since the state filed a response to the company's complaint in August 2011.

Taking over the case will be former state Attorney General Stephen D. Rosenthal, a Democrat, and Republican William Hurd, the former state solicitor general. They are employed by the Richmond law firm of Troutman Sanders and will handle the case pro bono.

Brian Gottstein, a spokesman for the attorney general's office, rejected any conflict of interest late Thursday, saying that outside counsel is being hired "in an abundance of caution and to move past what has become an unnecessary distraction for the office and the attorney general."

However, pressure has mounted for Cuccinelli to recuse his office from the case since AP first reported his ties to Star Scientific and its CEO last month. Last weekend, the Post reported that Cuccinelli purchased some of his stock in the company after it sued the state.

Star Scientific, formerly a maker of dissolvable smokeless tobacco products, is also the subject of a federal securities investigation.

Cuccinelli, in pursuing his gubernatorial bid, has broken with a custom observed by six attorneys general since 1985 of resigning from the office to run full time for governor.

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