Sources: Police union won’t back Herrera

Erin Neff

Wednesday, July 17, 2002 | 11:13 a.m.

The Nevada Conference of Police and Sheriffs today pulled its endorsement of Democratic congressional candidate Dario Herrera over ethical questions, including a loan Herrera obtained from a convicted felon, sources said.

The union had endorsed Herrera, the chairman of the Clark County Commission, early in his race for Nevada's 3rd Congressional seat. The decision to pull support could be a huge blow to Herrera, whose campaign has been dogged by ethical questions about a Las Vegas Housing Authority contract.

Officials of the law enforcement umbrella organization, which represents about a dozen of key police organizations, were not immediately available. A source familiar with the deliberations confirmed the endorsement was pulled.

The union met with Herrera last Thursday to discuss concerns it had about an $85,000 loan Herrera and his wife, Emily, obtained from John Keilly in 1999, and about Herrera's consulting work with the housing authority.

Keilly, a mortgage broker, was convicted in 1970 of bribery and conspiracy in a New York case involving Teamsters Union pension funds. Keilly was convicted of offering a $5,000 bribe to the auditor of the pension fund in exchange for a loan.

Emily Herrera worked as Keilly's executive assistant from 1996 to April 2000, and the candidate told the police union the couple obtained the loan because his wife knew Keilly was a lender.

The $85,000 loan was used to cover the cost of land on Callahan Avenue. In January 2000 the Herreras got a $261,000 construction loan from Bank West.

Emily Herrera later obtained a loan from American Fidelity, and the Bank West loan and part of the loan from the Keilly Family Trust were repaid, according to court documents.

"My wife, Emily, worked with Mr. Keilly for four years and understood him to be a well-known lender," Herrera said, in a statement issued by his campaign this morning. "We received the loan at a 12 percent interest rate, a standard rate for land loans.

"Like most Nevadans, we were excited to start our family in a home of our own," he added.

The police union has more than 3,000 members representing city and county law enforcement associations, state peace officers and corrections officers in Nevada.

The group has a strong political action committee active in local campaigns and lobbying efforts at the state Legislature. An endorsement from the group designates statewide law enforcement support.

Herrera had no comment this morning about the union's decision to pull the endorsement.

However, he did lash out at his Republican opponent, Jon Porter, for "hiding from the issues and talking about decision-making ability."

"It's shameful and very telling that Jon Porter refuses to keep the promises he made to voters last December to campaign on issues and issues alone," Herrera said. "My campaign has been and will always be about fighting for all Nevada families."

Porter said he wants to talk about issues like Yucca Mountain, Social Security and prescription drugs, but said "the allegations that have been brought forward are very serious and they raise genuine questions and concerns."

"The choices that Dario has made have come to light, and the public has a right to know," Porter added. "I'm disappointed that a campaign that I expected to be focused on issues has become focused on the choices Dario has made in his life."

Herrera said he only learned of Keilly's conviction last Thursday -- during his meeting with the police union.

"The conviction in 1970 happened before my parents even met each other," Herrera said.

He also said he had no idea Keilly was fined in August 2000 by the state, because Emily no longer worked for him at that time.

Keilly, owner of JMK Investments Ltd., was fined $50,000 by the state Financial Institutions Division in August 2000 for brokering real estate development loans without a license.

The state agency began investigating Keilly in June 2000, when investors expressed concerns about Keilly pooling their money and loaning it to developer Saxton Inc. Saxton failed to make loan payments to Keilly's investors when the company ran into financial difficulties.

The Financial Institutions Division also ordered Keilly to transfer all loans he was servicing to another mortgage broker he designated, and who was approved by the investors.

The state also prohibited Keilly from originating any new loans.

Porter dismissed Herrera's attack, saying: "There seems to be a trend here, 'I don't know. I don't know. I don't know.' "

Earlier this year Herrera deflected criticism of a $42,000-a-year contract he had to do public relations work for the Las Vegas Housing Authority, which was approved without the board's knowledge.

At the time Herrera said he did not know commissioners were unaware of his contract.