Panel blasts Las Vegas councilman in ruling

Erin Neff

Friday, July 21, 2000 | 11:19 a.m.

Nevada ethics commissioners struggled Thursday to find applicable state law to render a ruling on Las Vegas City Councilman Michael McDonald.

Although the six-member panel did clear McDonald by a 4-2 vote of any violations of state law, they didn't send him away with praise.

"You can skate on the edge of legality, remain marginally legal and overwhelmingly unethical," Commissioner Bill Flangas said after more than two hours of evidence.

More than a year after the controversial vote on a garbage collection contract that raised the ethical issue, McDonald seemed to only focus on his innocence, and not the admonishment.

"Do you understand what it means?" he asked his attorney, Louis Palazzo, after a series of failed motions led to the 4-2 dismissal of his case.

Commission Vice-Chairman Todd Russell opened the hearing at the Sawyer State Office Building by telling about 50 people in attendance that finding a law applicable to McDonald's case "is confusing to this commission."

Several sections of the ethics laws the commission would have used were rendered "unconstitutionally vague" by Washoe County District Judge Jerome Polaha in a decision Sept. 7.

Polaha's decision came when ruling for Clark County Commissioner Yvonne Atkinson Gates in her appeal of an Ethics Commission decision that she used her position to help friends get valuable concession contracts at McCarran International Airport's D Gates.

The Ethics Commission dropped an appeal of Polaha's decision in June and now is left struggling to find applicable laws on which to base decisions -- like the one rendered in McDonald's case.

"It's very difficult for this commission given the parameters we're in based on Judge Polaha's decision," Russell said.

Former Las Vegas City Councilman Steve Miller requested an opinion from the Ethics Commission about whether McDonald acted improperly by failing to disclose potential conflicts prior to a July 1999 vote granting Republic Silver State an extension to its exclusive trash-hauling contract.

Republic's regional vice president Steve Kalish and its corporate attorney Robert Groesbeck both testified Thursday about their relationships with McDonald.

"We have a friendly relationship, as I do with all of the politicians in the valley," Kalish said.

Republic and its related entities donated $36,800 to McDonald's 1999 re-election campaign -- a race that McDonald handily won against Miller and several other opponents.

Kalish said he also threw a fund-raiser for McDonald at his bar, Paddy's Pub, but could not recall how much was raised.

"That's unusual because often when we have fund-raisers we have an idea how successful it was," Commissioner Skip Avansino said.

Groesbeck said he was aware McDonald also was dating Republic employee Jennifer Simich.

Miller alleged the friendships with Groesbeck and Kalish and the romantic interest with Simich constituted a conflict that should have been disclosed prior to a vote awarding the company a $1.5 billion contract.

McDonald testified that he voted on the contract after getting clearance from City Attorney Brad Jerbic.

He repeatedly referred commissioners' questions to Jerbic and deputy city attorney William Henry -- both of whom were seated in the audience.

McDonald also testified that his relationship with Simich was not romantic in nature at the time of the vote.

"It was broken off," McDonald said. "We didn't resume our relationship until late July or early August."

After several attempts to learn the amount raised at the Paddy's Pub event, Commissioner Rick Hsu asked simply for a "ballpark figure."

"Not a clue," McDonald said. "As far as the financial fund-raising, that was not my bag, sir."

Jerbic testified that he felt Republic's campaign contributions were not a gift, and therefore constituted no conflict.

Furthermore, Jerbic said the total given by Republic amounted to just over 5 percent of the total raised by McDonald in that campaign. He said a past Ethics Commission decision rejected 7 percent of the total as a threshold for disclosure.

Flangas disputed that argument, saying he felt, "$36,800 is no small amount for a campaign contribution and the feeble attempt to minimize it as only 5 1/4 percent of his total borders on insult.

"Ninety angels standing on 90 Bibles cannot sanitize it as only a token or minor contribution," Flangas added.

But Flangas' motion to find McDonald guilty and fine him $5,000 failed for lack of a second. A motion by Avansino to dismiss also failed for lack of a second and then failed 3-3 when it was re-motioned after a second was found.

Commissioners Flangas, Hsu and Lizzie Hatcher voted against it while Russell, Avansino and Jim Kosinski voted in favor.

Kosinski then motioned to dismiss with the understanding that the commission "is tied by Polaha" but feels that disclosure is needed.

"As I read the statute, I don't find that Councilman McDonald had an obligation to disclose," Hatcher said. "But we need to stop reading everything so literally."

Hatcher also added "an ounce of prevention is worth a pound of cure," and remarked that McDonald and his attorney wouldn't have been dragged through the process if he had simply disclosed.

"I think that when in doubt you should always disclose," Russell added.

The 4-2 vote ended a lengthy battle and brought relief to McDonald, who immediately stood and hugged his parents, John and Doris McDonald.

Hsu and Flangas voted against the measure.

Kenneth Rohrs, the commission's executive director, said after the vote that McDonald's case will likely be the only one affected by Polaha's ruling. A series of ethics laws adopted in 1999 were ruled inapplicable to McDonald's case because the vote came prior to their adoption.

McDonald said he was not disappointed that the motion to dismiss -- without any added language -- failed.

He said if his case were heard a few days into the future, he would likely have won outright. That's because the commission today will consider banning the use of newspaper articles as evidence in cases -- a practice Miller has relied upon.

"Flip this into the future, and we wouldn't even be here," McDonald said.