Bribery of top officials alleged

Wednesday, April 5, 2000 | 11:16 a.m.

A just-released confidential intelligence report by the attorney general's office suggests top Nevada officials could be bribed to influence gaming license applications.

The December 1996 report, which disparages the officials with little or no corroboration, was part of about 900 pages of documents and eight hours of videotapes Attorney General Frankie Sue Del Papa made public Tuesday as a result of a March 21 court order.

The names of former Gov. Bob Miller and U.S. Sens. Harry Reid and Richard Bryan were among those bandied about in the 21-page report, which was written by Del Papa investigator Ron Wheatley.

All three and others mentioned in the report harshly criticized the attorney general's office Tuesday.

The Sun and KLAS Channel 8 had persuaded District Judge James Mahan to unseal the documents, which were turned over late last year to Mike Anzalone, who is suing Del Papa for forcing him to resign because he wouldn't participate in efforts to obtain intelligence on top gaming regulators.

Former state Gaming Control Board Chairman Bill Bible, a Del Papa political adversary who now serves as president of the influential Nevada Resort Association, was the chief target of the intelligence inquiry, Anzalone alleged. Bible joined the news organizations in seeking the release of the documents to determine if he was improperly investigated.

Anzalone charged that the intelligence investigation, conducted by Deputy Attorney General David Thompson, began in late 1995 under the guise of the criminal probe into the slot cheating activities of Ron Harris, a Control Board electronics expert.

Harris, recently released from prison, pleaded guilty and cooperated with the attorney general in August 1996.

Del Papa used the release of the documents to again defend her office's conduct in the Harris investigation, saying it was "thorough and professional." She said she fought for months to keep the documents secret to protect the identities of informants and the reputations of "numerous innocent persons who were the subject of unfounded criminal allegations."

Del Papa, however, acknowledged that her office faxed the intelligence report to the FBI at the end of March 1997. That was about the time Anzalone first went public with his claims.

Anzalone's Phoenix lawyer, Christine Manno, said the intelligence report leaves little doubt that the attorney general abused the power of her office.

"She used the criminal investigation of Ron Harris to open an investigation of anyone she wanted in state government, including her own clients, the Control Board," Manno said.

The intelligence report contains 21 pages of second and third-hand allegations about the casino industry and its regulators -- many attributed to unnamed sources, disgruntled former Control Board employees and licensees who landed in trouble with regulators.

Frank Romano, who lost his gaming license in the American Coin slot-rigging scandal several years ago, was among those providing information to Wheatley and Thompson.

"The very nature of the case itself and the potential implications for the state of Nevada necessitated that the investigation be conducted in a somewhat covert fashion," Wheatley wrote.

Wheatley said a confidential informant told him that Michael Toney, a prospective licensee at the Sands hotel-casino, once claimed that he "would be guaranteed his license" if he could spread around $100,000 to several well-known elected officials and power brokers who had influence with Bible, who retired last September after 10 years at the helm of the Control Board.

The informant said Toney told him that he could distribute the cash through a local accountant to Miller, Reid, Bryan, the late Gov. Grant Sawyer and politically connected gaming attorney Frank Schreck.

All five men are prominent Democrats, as is Del Papa, who last year dropped out of the U.S. Senate race because of an inability to raise campaign money.

"While the identity of those who would ultimately receive this money was not revealed to the CI (confidential informant), information obtained from other sources indicated that ... Bible could be influenced in this manner to approve gaming licenses," Wheatley wrote.

"Another source of information who wanted a gaming license was allegedly told that if a briefcase full of money made its way to Schreck, he would see that Bible got it."

Toney, whose bid for a license was denied by regulators, said late Tuesday that it was an "outright lie" that he suggested he needed to hand out cash to influence regulators.

"I never told anyone that," he said. "I don't know where they got that."

Toney said he remembers telling people he needed $100,000 to hire a good attorney and an accountant to work with regulators.

He described the late Sawyer as his good friend and neighbor and Reid and Bryan as the "most honest" elected officials he knows.

Wheatley, meanwhile, said another source, Ron Hollis, a disgraced former Control Board intelligence chief, told him that a prominent gaming licensee once offered to provide FBI agents with dirt on Miller and other public officials if they would go easy on his son-in-law, who had just been indicted.

"If you want Miller, I'll give you Miller for taking bribes, or whatever," Hollis quoted the licensee as telling agents.

Hollis -- who was forced to resign from the board in 1990 after it was disclosed he had duped a district judge to authorize a phony raid to protect an informant -- was described in the report as being very honest. He could not be reached for comment Tuesday or today.

Allegations also were leveled in the report against former Control Board member Gerald Cunningham, who had retired six years earlier.

Cunningham was accused of persuading Metro Police to end an investigation of a prominent slot route operator and ordering the file of a well-known casino licensee represented by Schreck put into the trunk of his car late one night.

Hollis had claimed that the file was returned to the board with pages out of order and upside down.

None of the allegations in the intelligence report, which appeared to dredge up long discarded conspiracy theories about Nevada gaming, were ever substantiated and no criminal charges were ever filed against those named.

At one point, Wheatley said several reliable sources had told him a well-known slot machine manufacturer was laundering money for the Central Intelligence Agency.

Wheatley said that when one source was asked how alleged laundering came to light, the source replied, "You hear things."

Miller called the allegations about him in the report "pure BS."

"Obviously, nothing came of any of it," he said. "It's all baloney."

The former governor added: "If that's the level of the way the investigation was conducted, it isn't worth the paper it's written on."

Bryan, a former Nevada governor, called his connection to the allegations "outrageous and an absolute fabrication."

"I'm personally offended by this completely unsubstantiated and ludicrous fairy tale," he said.

Reid said he was "insulted by the outrageous and absurd allegations."

Bible is a "man of great integrity with a proven track record as a gaming regulator that is beyond reproach," Reid said.

Schreck, a prominent political fund-raiser who has worked on the campaigns of the last three governors, said the allegations about him were "ridiculous."

"This doesn't make any sense," he added. "It's besmirching the reputations of some of the finest public servants this state has ever seen."

Bible, who publicly called for the release of the documents, said he found it hard to believe that Del Papa pursued the probe of him.

"I'm incredulous that the attorney general's office would launch an investigation of me because of the word of an individual who was denied a gaming license," he said.

"In the same breath that he makes these allegations about me, he also claims former Gov. Sawyer, Gov. Miller, Sens. Bryan and Reid and other prominent members of the community also participated in the bribe."

Cunningham said he was "astonished" to learn what was included in the report.

"I knew there was going to be some trash in there, but some of this stuff is mind-boggling," he said. "If Hollis said these things, then he's an absolute liar."

Cunningham said the report bordered on being "irresponsible."

"You don't just take stuff and stick it in a report without attempting to verify it," he said. "It's very unprofessional."

The Sun first reported word of the intelligence probe on March 26, 1997, in a story that featured an interview with Anzalone.

On April 1, 1997, Del Papa issued a statement to the Sun saying: "The attorney general's office did not investigate Gaming Control Board members during the course of the Harris case, nor is there a current investigation of this nature."

On Tuesday, however, as she made public the intelligence report and the other documents, Del Papa acknowledged for the first time that she indeed had investigated Bible.

"A limited search of public records concerning real estate holdings and automobile title and registration information was conducted," she said in a two-page news release. "That inquiry, which occurred more than a year after Michael Anzalone left his employment with the attorney general's office, indicated to this office that the allegations against Bill Bible were unfounded."

Documents Del Papa turned over Tuesday show that Wheatley obtained Bible's property and Department of Motor Vehicle records on April 25, 1997, less than a month after she denied investigating him. Wheatley, she said, sought the records after a confidential source alleged that Bible was receiving payoffs.

Anzalone has contended that he was asked to illegally obtain Bible's bank and telephone records as far back as early 1996, long before Harris agreed to cooperate. The former investigator said he declined the request, and no such records were among those made public Tuesday.

In a 16-page memo chronicling the Harris investigation for the media, Del Papa acknowledged that she was investigating Bible as late as Jan. 13, 1998.

She said her office re-checked property records at that time after another confidential source suggested Bible had "accepted payoffs" and "that the proceeds were hidden under his wife's maiden name.

"Ironically and disingenuously, certain individuals have elected to fault this office for conducting such an inquiry," Del Papa said in her news release. "The fact is that we performed our statutory responsibility to investigate allegations of criminal conduct committed by state officers in the course of their duties.

"This office would rightfully be subject to severe criticism had we failed to perform that duty. We have never in the past and will never ignore allegations of criminal conduct within our jurisdiction simply because the people against whom such allegations are made are too big, or too rich or too powerful."

Manno said she agreed that the attorney general has a right to investigate alleged misconduct involving state employees.

But she added: "They should have opened an investigative file on Bill Bible or anyone else they were investigating and not try to do it under the criminal case of Ron Harris."

In the memo to the media, Del Papa went to great lengths to criticize Anzalone, disclosing that her office investigated him on allegations he might have tried to "corruptly impede" the Harris investigation.

The attorney general also criticized the Sun's coverage of the story the past three years.

She said she asked Thompson to write a lengthy report discussing alleged inaccuracies in a series of Sun stories to clear up what she called "public confusion created by the articles."

Jeff German is the Sun's senior investigative reporter. He can be reached at (702) 259-4067 or by e-mail at german@lasvegassun.com

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