Harry’s Henchman Rory Reid: Harry Reid’s Mob Money, Part 2

Mr. Cleanface’s Dirty Laundry: Harry Reid’s Mob Money revisited a 1979 Justice Department probe into allegations that Midwestern Mafia members skimming funds from the Tropicana casino had channeled bribes to Nevada Gaming Commission chairman Harry Reid through mob lawyer Oscar Goodman and Tropicana attorney Jay H. Brown. Although the probe officially cleared Reid, he subsequently received numerous contributions from gambling industry figures, including Brown and known Mafia-associates as well as legitimate individuals and corporations. Reid’s son Rory has followed in his footsteps by associating with his father’s patrons in the gambling industry, which is the subject of this post.

In 1988 Senator Reid supported the Indian Gaming Regulatory Act (IGRA), which sought to limit competition to Las Vegas casinos from Indian counterparts. At that time Reid publicly portrayed himself as a protector of the Las Vegas gambling industry from Indian gambling competitors.

Meanwhile, however, the Senator’s son and Jay Brown acquired stock in American Enterprises, Inc. (renamed American Casino Enterprises, Inc. in 1993 and American Vantage Companies in 1997), a company which operated the Table Mountain Casino on an Indian reservation near Fresno, California. In July 1991 Brown--who had just donated $2,000 to Senator Reid that June--acquired 833,333 shares of American Enterprises stock, representing approximately 7.5% of the company’s outstanding shares, with warrants to purchase an additional 972,222 shares, all for $150,000. Brown became American Enterprises’ resident agent, and the next month he sold Circus Circus executive Mike Sloan 100,000 American Enterprises shares at 10 cents a share. At the same time Brown’s mother Florence S. Brown purchased 500,000 shares, Brown’s secretary Carol Caldwell purchased 120,000 shares, and Rory Reid purchased 5,000 shares.

After this was reported in December 1991, Sloan and Reid quickly announced they were divesting their shares. Reid’s father told the press he did not own any stock in American Enterprises and distanced himself from his son’s dealings by saying, “My son is 30 years old, he is a lawyer and his practice is almost totally in gaming. I don't control where he lives, who he marries, or what he buys.”

Despite Reid’s expressed lack of interest in his son’s business dealings, American Enterprises’ successor expressed an interest in Senator Reid: in July 1995 the Senator received contributions of $2,000 each from American Casino Enterprises officers Brown (who has contributed to Reid regularly since 1982), Ronald Tassinari, Audrey Tassinari, Jeanne Hood, and Karl Rogers. (Also, in December 1996 Reid received $2,000 from Robert Tassinari of New York’s Tasin & Company, Inc., a company accused of securities fraud in 1999 and fined and suspended from the NASD for failure to comply with a formal request to submit financial information in 2001.) Meanwhile from 1994 to 1996 American Casino Enterprises was a defendant in a legal dispute involving Table Mountain Casino, which ended with American Casino agreeing to pay a $500,000 civil fine for violating the Indian Gaming Regulatory Act.

After his involvement with American Enterprises, Rory Reid’s association with gambling industry contributors to his father’s campaigns continued. Since 1989 Harry Reid has received at least $29,000 from associates of Andrew Tompkins’ Lady Luck Gaming Corporation, which besides running the third-largest casino in downtown Las Vegas has operated hotel-casinos in Natchez, Tunica, and Biloxi, Mississippi, and Central City, Colorado. From 1994 to 2000 Rory Reid was an officer and general counsel for Lady Luck. In his capacity as a Lady Luck officer he signed an agreement with the US Treasury Department Financial Crimes Enforcement Network (FinCEN) in August 1999 stating that Lady Luck agreed to pay a $115,000 civil money penalty in return for FinCEN not pressing charges related to Lady Luck’s failure to file at least 25 forms for currency transactions in an amount greater than $10,000 in 1993.

After leaving Lady Luck, Rory Reid rejoined the law firm Lionel Sawyer & Collins, which has also employed his brothers Leif, Josh, and Key.

Lionel Sawyer & Collins is the largest law firm in the state of Nevada, and its Reno managing partner Frederick Harvey Whittemore is considered one of Nevada’s top lobbyists. Whittemore and his firm’s clients have included casino mogul Steve Wynn, one of the most powerful figures in the gambling industry and Nevada politics. A 1983 Scotland Yard report identified Wynn as a front man for the Genovese Mafia family, linking Wynn and his father to Genovese associates Anthony “Fat Tony” Salerno and Jerome Zarowitz and noting Wynn and his Golden Nugget casino’s links to drug dealers Neil Assinaro, Louis Cappiello, and Michael Jones. The report also discussed links between Wynn’s Golden Nugget partners Ed and Fred Doumani, Chicago Mafia representative Tony Cusumano, and Kansas City Mafia representative Joe Agosto.

As recounted in Part 1, Agosto had been overheard by the FBI in the late 1970s boasting that he had in his pocket “Mr. Cleanface”, which he later explained was his nickname for Nevada Gaming Commission chairman Harry Reid. Reid’s subsequent financial patronage is consistent with this. Federal Election Commission reports show that Steve Wynn and other members of the Wynn family associated with the Golden Nugget and Mirage gave contributions totalling $10,000 to Senator Reid in 1991 and 1998. Between 1989 and 2005 Reid’s leading contributions, totalling $158,450, came from what is now called MGM Mirage, a company formed from a 2000 merger between properties owned by Wynn and Kirk Kerkorian (who has also contributed to Reid). During this same 1989-2005 interval Wynn’s legal ally Lionel Sawyer & Collins contributed $72,516 to Senator Reid and employed four of Reid’s sons.

Meanwhile, in January 2003 Rory Reid became Clark County Commissioner. Reid simultaneously sat on the Clark County Liquor and Gaming Licensing Board. In those capacities, due to his links to Lionel Sawyer & Collins, he was forced to abstain from a March 2005 vote to approve gaming and liquor licenses for Wynn Las Vegas, Wynn’s latest megaresort venture, opened on the former site of the Desert Inn run by mobster Moe Dalitz, another contributor to Reid’s father. Prior to abstaining, Reid congratulated Wynn, who was approved unanimously.

Rory Reid’s work for Lionel Sawyer & Collins has also involved work for the Nevada Resort Association, a lobbying group representing the interests of the casino industry. The Association has paid Lionel Sawyer & Collins an undisclosed amount for Rory and his brother Leif to represent them. Meanwhile since 1989 Senator Reid has received several contributions from Paul Bible, brother of National Resort Association President Bill Bible (both sons of Nevada Senator Alan Bible, protege of Senator Pat McCarran, whose relationship to Moe Dalitz inspired the character of the corrupt Senator in Godfather II). Senator Reid has supported the gambling industry on such issues as restricting Indian casinos and opposing a ban on college sports betting.

Over the course of the Reids’ service to the gambling industry, Rory has joined his father as a dominant figure in the Nevada Democratic Party. Rory Reid served as Chairman of the Nevada Democratic Party from May 1999 to May 2001, before he assumed his present post of Clark County Commissioner.

During Reid’s term as Nevada Democratic Party Chairman, on October 16, 2000, the Nevada Democratic Party received a $25,000 contribution from the Oscar Goodman PAC, named for Oscar Goodman, the mob lawyer probed on suspicion of channeling Mafia funds to Harry Reid in 1979. Goodman had been elected Mayor of Las Vegas in 1999, and was reelected in 2003. As Mayor, Goodman has continued to fraternize with his former clients and their associates, including associates of the same Mafia families behind the Tropicana casino skimming operation that prompted the 1979 probe of Reid; he has done political favors for Mafia-connected strip clubs involved in a recent FBI probe of political corruption (for instance, when a strip club run by a friend of one of Goodman’s former Mafia clients wanted to expand into another building in the same shopping center and the present owner refused to move, the strip-club owner solicited Goodman’s help in pressuring the owner to move through means such as selectively enforcing city fire codes against the owner’s parking lot and having the police ticket the owner’s customers); and he has accepted reelection campaign contributions of $31,500 from strip-club owners and $1.5 million from a mob-connected friend. Meanwhile Goodman’s sons have taken over his criminal law practice, which Goodman has used his office to promote.

Goodman’s career is in turn being promoted by Harry Reid. In January 2006 Goodman and the Senator discussed the possibility of Goodman running for Senate, with Reid lauding Goodman to the press as “a very, very strong candidate”.

If Goodman were to run, what role might the Reids play in his campaign? Under the Bipartisan Campaign Reform Act of 2002 Senator Harry Reid and anyone who qualifies as his “agent” is theoretically ineligible to raise soft money for candidates. However after Rory Reid became Clark County Commissioner, he asked the Federal Election Commission to declare him unrestrained by this restriction on his father, arguing that he is not legally a fundraising agent of his father. Republican response to this ruling was divided, with some unconcerned, some anticipating further legal clarification from future rulings, and others complaining, “To have a county commissioner go before properties on the Strip and ask for unlimited soft money for the state Democratic Party when his father is at the top of the ticket sends a message.”

The message seems to be that even if Rory Reid does not qualify as Harry Reid’s fundraising agent in the limited sense defined by the Bipartisan Campaign Reform Act, he still serves as his father’s agent in the practical sense of being in a position to shape state and local events on behalf of his father and his father’s financial patrons.

For instance, in early 2005 the elder Reid reportedly exercised some behind-the-scenes arm twisting in order to help his son take public credit for negotiating an agreement between the Southern Nevada Water Authority (where Rory Reid sits on the board of directors), the Nevada Power Company, and the Colorado River Commission. Nevada Power Company Chairman Walter Higgins and Colorado River Commission Chairman Richard Bunker had both contributed to Senator Reid.

An investigative report by Los Angeles Times reporters Chuck Neubauer and Richard Cooper cited over 20 similar instances involving Senator Reid, either Rory Reid or other members of the Reid family, and special interest groups representing gambling, real estate, mining, and other areas. Over a four-year period from 1999 to 2003, the authors found, the Reid family’s various firms “collected more than $2 million in lobbying fees from special interests that were represented by the kids and helped by the senator in Washington.”

So for someone who isn’t his father’s agent, Rory Reid sure does a good impression of being his father’s henchman.

”American Vantage Companies’ Court Action Dismissed By California Superior Court”. Business Wire. April 25, 2001, 1.

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-----------------------. “Reid’s son seeks Democratic party post”. Las Vegas Review-Journal. April 6, 1999, 4B.

-----------------------. “Reputed organized crime associate among Goodman guests: Mayor makes no apologies for inviting to daughter's engagement party man listed in Nevada Black Book”. Las Vegas Review-Journal. March 17, 2003. http://www.reviewjournal.com/lvrj_home/2003/Mar-17-Mon-2003/news/20878782.html

-----------------------. “Rory Reid officially announces commission seat candidacy”. Las Vegas Review-Journal. October 18, 2001, 1B.

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Somehow in the process of posting this--and I don't know what computer quirk caused this, because the text is still in the original I cut and pasted from, so I'm scratching my head here--a paragraph got snipped from the closing section on "The Reids, Campaign Finance Loopholes, and Family Favors". When the missing text (bolded below) is inserted back in the original reads as follows:

Four public interest groups filed objections to Reid’s request, but in June 2003 the FEC found in Reid’s favor. The FEC ruled that just being Senator Reid’s son and having served as Nevada Democratic Party Chairman in the past does not give County Commissioner Reid any present authority as Senator Reid’s fundraising agent, and therefore Rory is free to raise funds for the Nevada Democratic Party as long as he raises them on his own authority as a Clark County official rather than on his father’s authority.

Republican response to this ruling was divided, with some unconcerned, some anticipating further legal clarification from future rulings, and others complaining, “To have a county commissioner go before properties on the Strip and ask for unlimited soft money for the state Democratic Party when his father is at the top of the ticket sends a message.”

In Nevada, Reid Is the Name to Know; His lawyer brothers represent nearly every major industry there. And their clients rely on Sen Reid's goodwill.

Ponder this: It was the kind of federal legislation that slips under the radar. The name alone made the eyes glaze over: "The Clark County Conservation of Public Land and Natural Resources Act of 2002." In a welter of technical jargon, it dealt with boundary shifts, land trades and other arcane matters — all in Nevada.

As he introduced it, Nevada's senior senator, Democrat Harry Reid, assured colleagues that his bill was a bipartisan measure to protect the environment and help the economy in America's fastest-growing state......... What Sen Reid did not explain was that the bill promised a cavalcade of benefits to real estate developers, corporations and local institutions that were paying hundreds of thousands of dollars in lobbying fees to his sons' and son-in-law's firms, federal lobbyist reports show.

The IRS is looking into phony trusts like these. They need to nail Reid's collusion with businesses---particularly officers of publicly-held companies---in the scheme that might include corporations' misusing corporate reserve accounts, concealing losses, inflating asset values and improperly accounting for transactions, as well as deferring profits into reserve accounts, improperly shifting capital funding to other projects to hide illegal payments to Reid, and might have employed money laundering schemes to siphon money into Reid's campaign accounts, in order to evade the IRS, SEC, FEC and US banking laws. The "trust" itself should be looked at for excessive "legal fees" and "admin fees" which are classic money laundering schemes.

Anyone with concerns should contact the SEC here: EMAIL enforcement @SEC.gov.

As one FReepers posted: Reid's comments about "going upstairs" to look at the FBI files on a Judge---to see why they had been filibustered---are chilling. Reid is a crook with a "God" complex. He and his ilk are not to be trusted. As a Dumbocrat, depend on Reid to use the well-rehearsed "victim" routine.

Victimization is a Dim's basic belief by which they blame and find others responsible for their own personal failures, then expect taxpayers, deep-pocketed individuals, the government, or the courts to bail them out.

For a Dim, it feels good to be in the throes of "victimization" and either A) causing victims, B) concocting victims, C) playing victim, D) commiserating over victims, E) subsidizing victims, and, F)creating another class of victims to bleed over.

Interesting; thanks. Reminds me of something I was just reading about how the Mississippi casino industry is adjusting to the effects of Katrina:

Wally Northway, "Isle of Capri opens Coast's first land-based casino", The Mississippi Business Journal, Jan 02, 2006, Volume 28, Issue 1, Page 9:

On December 26, Isle of Capri Casinos Inc. reopened its land-based casino at the Isle of Capri Casino Resort in this Mississippi Gulf Coast city following Hurricane Katrina.

The casino, the first land-based casino to open since the change in Mississippi gaming legislation passed in October, includes 950 slot machines, a poker room with nine poker tables, 27 table games, two restaurants and 550 hotel rooms. Plans call for a new European spa and additional hotel rooms to open in the near future.

"Reopening the Isle-Biloxi marks a major milestone for the state of Mississippi, as well as our company. This casino was originally the first casino to open in the market back in 1992 and we are the first land-based Gulf Coast casino to open today following the devastation of Hurricane Katrina. Our goal was to put our team members back to work as quickly as possible and I am happy to say that we have succeeded. Our team members are excited to get back to the business of welcoming guests in Isle Style," said Isle president and COO Tim Hinkley.

Thanks much for the comments. Anything to add on how that relates to the campaign finance issue from the last part of the article? (See Post 21 for a paragraph on that which got snipped from my original post.) I was hoping to get some comments on that from FReepers familiar with campaign finance disputes, and I know you've got some knowledge in that area. There are more details on Rory's FEC ruling and the debate generated by it on these links (Note: the second link is a pdf file and rather long):

Federal Election Commission Advisory Opinion Number 2003-10. http://ao.nictusa.com/ao/no/030010.html

Federal Election Commission Public Hearing. Tuesday, May 17, 2005, 10:00 AM. www.fec.gov/pdf/nprm/cand_solicitation_party/20050517hearing.pdf

Key question: Did Reid deliberately raised more corporate money from publicly-held corporations than he needed, then divert some of the excess in a series of generous donations to non-profit groups that, on the surface, benefited their mutual causes?

The donations to non-profits might then be illegally converted, then funneled back to Reid‘s campaign coffers through donations by the N/P officers and their co-conspirators, or subsets of them

These complicated transactions should draw scrutiny in legal and political circles to determine the extent to which state laws and campaign finance laws were violated in schemes that appear to launder corporate donations to a candidate, and should raise questions that should be investigated regarding whether shareholders in publicly-funded corporations were deceived, and whether the true destination of corporate money was concealed (SEC is interested in this).

Sen Reid may also have used non-profit, ethnic, hyphenated, or faith-based groups as middlemen for campaign transactions by a pattern of Reid funneling money from his family-run foundations to these different groups, that was laundered, then landed in Reid's campaign accounts, in order to obscure, if not cover-up, the original source of donations to his campaign coffers.

Reid, his family, or his henchmen might also have directed that campaign donations be made in the names of others without their knowledge or consent.

When the financial merry-go-round stopped, non-profit, ethnic, hyphenated, and faith-based individuals---the groups Reid needs to endorse his election effort---end up with a lot of money, some of which was then laundered, illegally converted, then funneled back into Reid’s campaign coffers.

Millions of dollars in donations to Reid might never have been disclosed to campaign regulators, because the type of groups Reid used weren’t governed by federal law. The public-spirited donors might not always have known where their tax-deductible money was headed, and don't control funds once they're donated.

Money gets transferred all the time and remains disclosed only to the extent required to be disclosed by applicable state and federal law---this gets complicated.

In another variaiton, Reid and others may have conspired to raise more money than was needed and then routed some of that money to other causes, such as supporting state candidates. As a result, the Reid firms and his family might be beneficiaries as a collateral effect due to influence-peddling.

There might be a pattern of disguising the original source of money might have been an effort to hide Reid’s simultaneous financial and legislative dealings with Reid family clients. Clandestine meetings may have been held to help this along in order to get access and push the clients' interests, and to hide the genesis of campaign funding.

Thanks for the insightful analysis. With respect to your key question, there were two transactions mentioned in the article where I wondered if that type of scenario might be involved. One was the $25,000 Oscar Goodman PAC contribution to the Nevada Democratic Party under Rory Reid's chairmanship; I assume this was money left over from Goodman's first Mayoral campaign; how it was redistributed once it got to the Nevada Democratic Party and what laws such redistribution is subject to I don't know. The other was the $1.5 million contribution to Goodman's re-election campaign, which some have pointed out was seemingly in excess of what he actually needed. I of course have no knowledge of whether these transactions actually involved any campaign finance violations, but if someone were to investigate with your key question in mind those are two transactions which caught my eye.

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