Posted on 10/12/2006 2:31:58 PM PDT by Ernest_at_the_Beach
WASHINGTON -- Senate Democratic leader Harry Reid might have violated Senate ethics rules by not disclosing to Congress the transfer of Las Vegas land he owned to a partnership in which he maintained a financial stake.
The partnership sold the land three years later at a profit of $700,000 for Reid, property deeds show.
The Nevada Democrat's deal was engineered by Jay Brown, a longtime friend and former casino lawyer whose name surfaced in a major political bribery trial this summer and in prior organized-crime investigations. He has never been charged with wrongdoing, except for a 1981 federal securities complaint that was settled out of court.
Land deeds obtained during a review of Reid's business dealings show the following:
• The deal began in 1998 when Reid bought undeveloped residential property on Las Vegas' booming outskirts for about $400,000. Reid bought one lot outright and a second parcel jointly with Brown. One of the sellers was a developer who was benefiting from a government land swap that Reid supported. The seller never talked to Reid.
• In 2001, Reid transferred the land to a limited liability corporation created by Brown. The senator did not disclose the transfer on his annual public ethics report or tell Congress he had any stake in Brown's company. He continued to report to Congress that he owned the land.
• After getting local officials to rezone the property for a shopping center, Brown's company sold the land in 2004 to other developers, and Reid took $1.1 million of the proceeds, nearly tripling the senator's investment. Reid reported it to Congress as a personal land sale.
According to a statement issued by Reid's office Wednesday, the creation of the limited partnership to manage the land investment in 2001 was a "technical, legal step that did not alter Senator Reid's actual ownership interest in the land." Reid's office argued that the financial disclosure forms do not distinguish between "personal" or "corporate" sales.
The deal allowed Reid to transfer ownership, legal liability and some tax consequences to the partnership without public knowledge but still collect a seven-figure payoff.
Reid hung up the phone when questioned about the deal by AP last week.
During a Las Vegas news conference Wednesday, the senator said he thought he did nothing wrong and was willing to change his financial disclosure report's account of the sale if the Senate Ethics Committee asks him to do so.
"Everything I did was transparent," Reid said. "I paid all the taxes. Everything is fully disclosed to the Ethics Committee and everyone else. As I said, if there is some technical change that the Ethics Committee wants, I'll be happy to do that."
Reid contends there is nothing to the story. "I bought a piece of land (and) sold it six years later. Everything was reported."
Reid said the story was politically motivated.
"The last few weeks of this midterm election, the target is on my back. I'm helping a lot of people. Republicans know they are going to lose a lot of seats in the House and a lot of seats in the Senate.
"I bought the land from somebody I didn't know, and I sold it to somebody I didn't know," he said.
The senator's aides said that no money changed hands in 2001 and that Reid instead got an ownership stake in Brown's company equal to the value of his land. Reid continued to pay taxes on the land and did not disclose the deal because he considered it a "technical transfer," they said.
Reid aides also said they have no documents proving Reid's stake in the company because it was an informal understanding between friends.
The 1998 purchase "was a normal business transaction at market prices," Reid spokesman Jim Manley said. "There were several legal steps associated with the investment during those years that did not alter Senator Reid's actual ownership interest in the land."
Senate ethics rules require lawmakers to disclose on their annual ethics report all transactions involving investment properties, regardless of profit or loss, and to report any ownership stake in companies.
Kent Cooper, a former Federal Election Commission official who oversaw government disclosure reports for federal candidates for two decades, said Reid's failure to report the 2001 sale and his ties to Brown's company violated Senate rules.
"This is very, very clear," Cooper said. "Whether you make a profit or a loss, you've got to put that transaction down so the public, voters, can see exactly what kind of money is moving to or from a member of Congress.
"It is especially disconcerting when you have a member of the leadership, of either party, not putting in the effort to make sure this is a complete and accurate report," Cooper said. "That says something to other members. It says something to the Ethics Committee."
Other parts of the deal, such as the informal handling of property taxes, raise questions about possible gifts or income reportable to Congress and the IRS, ethics experts said.
Stanley Brand, former Democratic chief counsel of the House, said Reid should have disclosed the 2001 sale.
"It's like everything else we've seen in last two years. If it is not enforced, people think it's not enforced, and they get lax and sloppy," Brand said.
Reid and his wife, Landra, personally signed the deeds transferring their full interest in the property to Brown's company, Patrick Lane LLC, for the same $400,000 they paid in 1998, records show.
Despite the transfer, Reid continued to report on his public ethics reports that he owned the land until it was sold in 2004. His disclosure forms to Congress do not mention an interest in Patrick Lane or the company's role in the 2004 sale.
AP first learned of the transaction from a former Reid aide who expressed concern the deal had not been reported properly.
Reid is not listed anywhere on Patrick Lane's corporate filings with Nevada. Brown is listed as the company's manager. Reid's office said Nevada law did not require Reid to be mentioned.
"We have been friends for over 35 years. We didn't need a written agreement between us," Brown said.
The informalities did not stop there.
Brown sometimes paid a share of the local property taxes on the lot Reid owned outright between 1998 and 2001, while Reid sometimes paid more than his share of taxes on the second parcel they co-owned.
And the two men continued to pay the property taxes from their personal checking accounts even after the land was transferred to Patrick Lane in 2001, records show.
Brown said he and Reid considered the two lots a single investment.
"During the years of ownership, there may have been occasions that he advanced the property taxes or that I advanced the property taxes," Brown said. "The bottom line is that between ourselves, we always settled up, and each of us paid our respective percentages."
Reid paid about 74 percent of the property taxes, slightly less than his actual 75.1 ownership stake, according to canceled checks kept at the assessor's office.
Ethics experts said such informality raises questions about whether any of Brown's tax payments amounted to a benefit for Reid. "It might be a gift," Cooper said.
Brand said the IRS might view the handling of the land taxes as undisclosed income to Reid but it was unlikely to prompt an investigation.
Nevada land deeds show Reid and his wife bought the property in January 1998 in a proposed subdivision created partly with federal lands transferred by the Interior Department to developers.
Reid's two lots were never owned by the government, but the piece of land joining Reid's property to the street corner, a key to the shopping center deal, came from the government in 1994.
One of the sellers was Fred Lessman, a vice president of land acquisition at Perma-Bilt Homes.
Around the time of the 1998 sale, Lessman and his company were completing a complicated federal land transfer that involved Arizona-based developer Del Webb Corp.
In the deal, Del Webb and Perma-Bilt bought environmentally sensitive lands in the Lake Tahoe area, transferred them to the government and then got in exchange several pieces of Las Vegas land.
For years, Reid had been encouraging Interior to make land swaps on behalf of Del Webb, where one of his former aides worked.
In 1994, Reid wrote a letter with other Nevada lawmakers on behalf of Del Webb and then met with a top federal land official in Nevada. That official said in media reports he felt pressured by the senator. Reid denied applying pressure.
The next year, Reid collected $18,000 in donations from Del Webb's political action committee and workers.
In December 1996, Reid wrote a second letter on behalf of Del Webb, urging Interior to answer the company's concerns. The deal came together in the summer and fall 1997, with Perma-Bilt joining in.
"This land investment was completely unrelated to federal land swaps that took place in the mid-1990s," Manley said.
Clark County had zoned the property Reid owned for housing, records show. Days before Reid transferred the parcels to Brown's company, Brown sought permission in May 2001 to rezone the properties for a shopping center.
County officials objected, saying the request was inconsistent with the master plan. The town board in Spring Valley, where the property was located, voted 4-1 to reject the rezoning.
Brown persisted. The Clark County zoning board followed by the Clark County Commission voted to overrule the recommendation and approve commercial zoning.
Before the approval in September 2001, Brown's consultant told commissioners that Reid was involved. "Mr. Brown's partner is Harry Reid, so I think we have people in this community who you can trust to go forward and put a quality project before you," the consultant testified.
Clark County Manager Virginia Valentine said it was not uncommon for rezoning applications that did not fit the plan to be approved by the commission.
"It was kind of standard practice (for staff) to recommend denial of nonconforming zone changes because they didn't comply with the master plan," Valentine said. "And in some cases, it's because our master planning had not kept up with the growth of the area."
On Jan. 20, 2004, the company sold the property to developers for $1.6 million. Today, a multimillion dollar retail complex sits on the land.
On Jan. 21, 2004, Reid received more than $1.1 million of the sale proceeds. Reid disclosed the money the following year on his Senate ethics report as a personal sale of land, not mentioning Patrick Lane.
Brown has been a behind-the-scenes power broker in Nevada for years, donating to Democrats, Republicans and charities and representing a major casino in legal cases.
Brown befriended Reid four decades ago, before Reid served as chairman of the Nevada Gaming Commission and decided cases involving Brown's clients.
Brown's name has surfaced in federal investigations involving organized crime, casinos and political bribery since the 1980s.
This past summer, federal prosecutors introduced testimony at the bribery trial of former Clark County Commission chairman Dario Herrera that Brown had taken money from a Las Vegas strip club owner to influence the commission. Herrera was convicted of taking kickbacks. Brown was never called as a witness.
Brown declined to discuss past cases where his name surfaced, including Herrera.
"The federal government investigated this whole matter thoroughly, and there was never any implication of impropriety on my part," he said.
Review-Journal writer Francis McCabe contributed to this report.
Mafia....Harry and Jay Brown is part of the MAFIA.
This underscores the need for the Republicans to take back the White House and the Executive branch. If Republicans were in charge of the Justice Department and the FBI, that lying, thieving scumbag Sandy Berger would never have gotten away with a slap on the wrist for stealing and destroying classified documents from the National Archive, and the FBI would be on Harry Reid like flies on dog feces, yessiree. It's imperative that the Republicans take back the White House so this kind of corruption can be prosecuted to the fullest....
Oh, wait-a-minute.... Nevermind.
What a friggin' waste of time.
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From the GString Blog:
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The Committee is a group of concerned Las Vegas citizens, including businessmen, former and current political leaders, journalists, law enforcement and staff. Among the noted members dedicated to cleaning up Las Vegas Politics are Dario Herrera, Oscar Goodman, Rick Rizzolo, Lance Malone, Kent Oram, Erin Kenny, Harry Reid, George Knapp, Sheriff Young, and many others. Of course, many of our committe members have been part of the corruption, but now have decided to divulge their secrets rather than spend jail time.
Actually, it was made after one of his previous untruths. It's one of those things you wanna hold onto, you know...like thos priceless Ted Kennedy ones. ;)
With Reid like Kennedy, the news keeps repeating history, and makes our old stuff valid again in the future.
There are more chapters ernest, you have to go to the later chapters for them to show up on the menu, if you are so kind as to repost your outline. Chapter 12 is on Reid, some on Jay Brown later too.
Got to get out of here an do some errants and get some grub....very, very interesting.....will work on it tonight later and tomorrow...
What a way to run a business. How does one audit that?
-PJ
REID: REPUBLICANS CANNOT BE TRUSTED TO END THE CULTURE OF CORRUPTION
Don't get mad, get even. Vote on November 7.
Go to this link and keep watching listening to the little screen on the left after the first ad.
http://www.redorbit.com/news/video/?mid=14339&category_id=2&release_time=2006-10-11&page=
JANE ANN MORRISON : How Dario Herrera paid for his defense remains under wraps
Enquiring minds want to know: Who paid former Clark County commissioner-turned-convicted felon Dario Herrera's legal fees?
We know who paid Mary Kincaid-Chauncey's fees for Richard Wright ... you did. The flower-shop owner's only attorney was paid the court-appointed rate of $92 an hour after she was legally declared indigent just before the eight-week trial started.
Herrera hired four attorneys and one technical expert for his defense team. At night, the three New York attorneys went to the Four Seasons to rest their heads. (I've been assured Jerry Bernstein got a good rate at the Four Seasons because his firm represents the hotel company.) Of course, the technical expert was at the Orleans, and local counsel David Brown slept in his own bed.
Herrera's attorneys' bills ran over $1 million, some say closer to $2 million.
Herrera didn't have the money. Maybe his wife's family was footing the bills? The speculation over who paid for Herrera's legal defense ranged far and wide.
Conspiracy theorists speculated someone who didn't want Herrera to squeal on them might be underwriting the bills.
David Brown's dad is prominent attorney Jay Brown, and Jay Brown's name popped up frequently on wiretaps as being hired by topless club owner Michael Galardi to lobby Commissioners Bruce Woodbury and Yvonne Atkinson Gates on behalf of Galardi's business interests. During the trial, Galardi said he paid Jay Brown to lobby for him and didn't know whether Brown used any of that money to bribe anyone.
http://www.reviewjournal.com/lvrj_home/2006/May-20-Sat-2006/news/7513675.html
Reid aides also said they have no documents proving Reid's stake in the company because it was an informal understanding between friends.
Oh, REEEEAAAALLLLY. That's an awfully close friend if your doing $1M+ land deals with no formal docs. And, hmmmm, don't most states require all real property transfers to be in WRITING?
Verbal transfers are worthless
[snip]
Yet thousands, perhaps millions, of property owners have spoken those worthless words to lovers, friends, relatives and spouses. The reason verbal real estate promises are worthless is the Statute of Frauds requires real estate transfers to be in writing to be valid.
Equally important, written title transfers must be recorded in the county or city where the property is located to have effect against other claimants to the title.
http://rgj.p2ionline.com/ShoppingChannelNoPopUp/ss/index.aspx?webstoryid=9707796&area=SS&type=page&AdgroupID=43453
Great grab. I know a lot more than I'm saying, but you are on the right track for sure. That's why this one isn't going away.
Go here for more insider stuff http://gsting.blogspot.com
The Brown son stuff is REALLY indicting.
Good little Stalinists always steal a little for themselves. The Leaders of USSR always drove the cars while the people walked.
Pray for W and Our Troops
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