Funding loopholes bolster candidates

Jeff Schweers

Thursday, Sept. 12, 1996 | 11:59 a.m.

The language seems more suited to a dry cleaning business than a political race -- bundling and laundering.

But those words have left two candidates steamed at each other in the County Commission race being waged in northwest Las Vegas.

The words also have given good government reformers a reason to press for changes in campaign reporting laws at the 1997 Legislature, which convenes in January.

"Donors almost always figure out ways to get around any given system," said Eric Herzik, chairman of the political science department at the University of Nevada, Reno.

At issue are thousands of dollars in contributions incumbent Paul Christensen, a Democrat, and challenger Lance Malone, a Republican, have received from powerful Las Vegans interested in District C's potential for land development and casino expansion.

Christensen, seeking a fourth term, has benefited from bundling, a common -- and legal -- practice.

In his case, Sahara Gaming Corp. President Bill Bennett, whose casino company is allowed by law to contribute $10,000, has actually pumped $47,000 into Christensen's campaign as of the last reporting period, which ended Aug. 19.

Bennett was able to do this by having other companies he controls "bundle" their money into one large sum. With 10 companies in his name, Bennett has the potential to donate as much as $100,000 to any candidate.

Malone has been criticized for another legal, common practice -- accepting donations laundered through the state party.

Malone received $10,000 from the Nevada Republican Party, which can give as much as it wants. The real source of that money doesn't have to be reported. Republican officials won't divulge the original donor's name, but Christensen's proponents are speculating that Sands hotel-casino owner Sheldon Adelson is the source.

Adelson and other Sands executives were unavailable for comment.

Advocates for campaign finance reform say these tactics -- bundling and laundering -- take voter to the cleaners.

By bundling or laundering their money, contributors who want to maintain a low profile can still load up on a favored politician. Voters often never know who is giving what, and that angers good government advocates, who maintain a skeptical view that donors give large amounts for a reason.

"Money doesn't buy a candidate," Herzik said. "It buys access."

Both methods "highlight a flaw in state campaign finance law, a loophole that's incredibly difficult to close," Herzik said.

Herzik and other reformers say the "flaw" guarantees access to elected officials who hold the power to grant gaming licenses and approve zoning changes.

Christensen's detractors note that Bennett has asked the County Commission to rezone his $558,000 home as a commercial professional building and has plans to expand the Sahara hotel-casino.

Bennett was unavailable for comment.

"The examples in this race define what we've been trying to do the last several years," Secretary of State Dean Heller said of his efforts to require full disclosure of all contributions over $100.

Christensen's campaign manager, Kent Oram, said the difference between the candidates' contribution pipelines is that Bennett's money is a matter of public record since it was reported on Christensen's Aug. 19 report.

"What others gave Christensen was reported, it was not hidden," Oram said. "There's a big difference in reporting it and hiding the source of who gave you that money."

To date, no one has publicly confirmed who wrote the $10,000 check that went into Malone's war chest. And Malone said he doesn't know, either.

"What's so interesting is if it was such a bad deal, why has nobody at the county put a bill draft request to the Legislature saying you have to put your name on it?" Malone said.

Malone said he's gotten a six-figure commitment from the gaming industry, but won't say who it's coming from. That information will be available when the Oct. 21 campaign reports are due.

Malone said with so much at stake in this race, many gamers are reluctant to give openly for fear of retaliation.

"I hope people will be able to step up to the plate," Malone said.

The party loophole, he said, gives him the "competitive edge" he needs to be on equal footing with Christensen.

Malone detractors are further agitated over additional revenue flowing into Malone's campaign. Malone has recently reserved about $140,000 in television advertising. Christensen's backers speculate that money is coming from the same source as the $10,000 donation.

"They're using a technical loophole in the law to funnel one ton of money," Oram said. "Only the Republican Party can answer, and they won't tell."

Herzik said both practices are means to the same end.

"It's kind of hypocritical to say he's getting $10,000 funneled through the party, when their guy is getting $50,000 funneled through five corporations," Herzik said.

Attempts to restrict these practices have failed at the Legislature, but a measure on the Nov. 5 ballot would place limits on corporate contributions.

Question 10, which voters endorsed overwhelmingly in 1994 and must approve again Nov. 5 to become law, would establish a $5,000 spending limit per person or corporation in the primary and the general elections.

However, Question 10 would not eliminate bundling or laundering.

"It would be nice if somehow or other everybody could get together and agree on the most it should cost for a particular race," said Ellen Nelson of Common Cause.

Heller said he will submit a spending-disclosure bill during the 1997 Legislature.

"I'm baffled by the fact (that lawmakers think) these average voters don't have the right to know where this money is coming from," Heller said.