Cloud lifts in ethics case

Wednesday, May 22, 2002 | 9:30 a.m.

CARSON CITY -- Las Vegas Councilman Michael McDonald did not violate any state law when he spent $23,319 in campaign money to defend himself against ethics and criminal charges, the state attorney general's office said Tuesday.

"I'm very happy about this," McDonald said. "This removes a cloud from my head. A lot of people were shooting at me, but that goes with the territory."

A 20-page legal opinion agreed with McDonald that using the money was not a personal expense but an expense related to holding public office.

The law prohibits a candidate or office holder from spending campaign funds for "personal" use. But there is nothing in the Nevada law that defines personal use, said Deputy Attorney General Mark Krueger. And there are no prior court cases that answer the question.

The opinion was addressed to Secretary of State Dean Heller, Nevada's chief election officer.

Krueger said most states and the federal government "are likely to find that, on a case-by-case basis, campaign funds used to pay attorney fees for defending a public officer against an ethics charge are expenses related to the public office or campaign."

Krueger quoted from an opinion of the Federal Election Commission that says "... any legal expense that relates directly to allegations arising from campaign or officeholder activity would qualify for 100 percent payment with campaign funds."

The opinion said the Nevada Legislature "generally intended to disallow expenditures of campaign monies for typical personal and household expenses such as food, clothing, rent, utilities and the like."

It said the Nevada law was written to mirror the federal law.

McDonald's legal troubles arose last year after allegations he secretly worked on issues on which he had publicly excused himself.

He was accused of trying to promote the city purchase of the Las Vegas Sportspark to help his employer Larry Scheffler get out of a bad investment. He was also accused of trying to block a license for a topless club in a building owned by political consultant Sig Rogich that was not far from a topless club owned by McDonald's friend Rick Rizzolo.

Both the city and state ethics panels determined McDonald violated the law. However, the state Ethics Commission split on a vote whether to fine him.

The city's finding, when forwarded to the District Court seeking McDonald's removal from office for malfeasance, was dismissed by the judge.

A recall effort was launched to remove him from office, but it failed to get the necessary signatures.

McDonald said he was told both by the city attorney's office and his personal attorney, Richard Wright, that it was legal to use campaign money to defend himself against charges arising out of his performance in office.

McDonald said the city ethics committee "tried to throw everything at me."

As a result of the cases, McDonald said the city ordinance was changed so that dual complaints could not be filed with the city and state ethic panels on the same issues.

Appointments to the Las Vegas Ethics Review Board have been in limbo, McDonald said. He said he hoped this might move the process forward.