Campaign funds paid McDonald legal fees

Erin Neff

Wednesday, Jan. 16, 2002 | 11:12 a.m.

Las Vegas City Councilman Michael McDonald spent $23,000 in campaign money to pay the attorney who defended him against ethics and criminal charges last year, which is an apparent violation of state law, election officials said.

McDonald's campaign made six payments totaling $23,319 to the law firm of Wright, Judd & Winckler in 2001, according to a campaign report released Tuesday by the city clerk's office. McDonald told the Sun on Tuesday that the payments were "for my ethics charge."

State officials said that they would look into the matter if a complaint was filed but that they were not planning an investigation on their own.

McDonald said he was told by both his attorney, Richard Wright, and the city attorney's office that he was entitled to spend campaign money on the defense of charges related to his public office.

"I was defending the position that I hold," McDonald said. "If I was a private citizen then I could not use this for personal use to pay Richard Wright.

"It was not I, Michael McDonald, it was Councilman Michael McDonald."

But that is not the advice Deputy City Attorney William Henry gave two other councilmen facing ethics charges last year.

In July Henry said Councilmen Michael Mack and Larry Brown would have to pay their attorneys to represent them in ethics cases. The city does not represent council members in ethical matters, Henry said at the time, because those are deemed a personal action against the council member. Henry could not be reached Tuesday afternoon or this morning for comment.

Susan Morandi, deputy secretary of state for elections, said no personal use of campaign money is allowed and any such use would be an apparent violation. However, her office does not initiate investigations into alleged misuse of campaign money on its own.

"We would have to get a complaint from someone in writing," Morandi said. "We would then investigate the matter."

Morandi said if the evidence shows a violation occurred, the matter would likely be forwarded to the attorney general's office for potential prosecution. The secretary of state's office only imposes fines for late filing of required reports.

McDonald was only required to file the report because his campaign collected more than $10,000 in 2001. McDonald is not up for re-election until 2003.

The report, which McDonald filed Jan. 10, details $9,900 in three separate contributions from Republican Services and two of Republic's entities. Development group Laurich Properties donated $5,000, Fletcher Jones Imports gave $5,000 and Coronado Bay Buffalo LLC gave $1,000. McDonald also listed a personal loan of $11,000 to the campaign.

All three of the trash company's donations came Dec. 13.

McDonald listed the expenses to Wright's firm, dated from Jan. 12, 2001 to Nov. 15, 2001, as "miscellaneous" expenses to his campaign. His campaign report also lists office expenses and advertising expenses for 2001.

Wright defended McDonald in both city and state ethics cases, during a criminal investigation by Metro Police and in a District Court proceeding seeking to have him removed from office for malfeasance.

McDonald said he is still paying Wright, a premier defense attorney whose clientele includes other public officials and world champion boxers.

"It says in the code that you can use it for that," McDonald said, referring to legal fees.

McDonald said he was citing Nevada Revised Statute 294A. But 294A is the part of state law that prohibits campaign contributions for personal use.

"We were told we could," he said.

Wright said only that he could not comment about the legal fees without a waiver from McDonald. Wright could not be reached again Tuesday night.

McDonald said he had talked to other public officials Tuesday night who said they thought they could use campaign money for legal expenses.

"Other elected officials do the same thing," McDonald said, declining to give another example.

McDonald's legal troubles in 2001 stemmed from his actions as a councilman in the summer of 2000 when he was accused of working behind the scenes on matters from which he had publicly recused himself.

One case involved his attempts to broker the sale of the beleaguered Las Vegas Sportspark to help his boss, Larry Scheffler, get out of a bad investment. The other involved his attempts to block a topless club license sought for a building owned by political consultant Sig Rogich not far from the topless club owned by McDonald's friend Rick Rizzolo.

Those cases led Las Vegas Mayor Oscar Goodman to ask for a criminal investigation and also to a unanimous council vote stripping McDonald of his mayor pro tem position. A citizen recall effort also arose, but failed to obtain enough valid signatures to force a special election asking if McDonald should be removed from office.

Both city and state ethics proceedings determined McDonald had violated the law in those matters. However, the state Ethics Commission split on a vote to fine him.

The city's findings -- when forwarded to District Court seeking McDonald's removal from office for malfeasance -- were dismissed by the judge.

In 2000, the state Ethics Commission scolded McDonald for voting on a highly-lucrative exclusive contract for Republic Services, despite the councilman's many ties to the company.

McDonald is a personal friend of company president Steve Kalish and with company attorney Robert Groesbeck.