Mortgage company pushes AG campaign

Erin Neff

Thursday, Oct. 31, 2002 | 11:30 a.m.

Democratic attorney general candidate John Hunt reports fewer ties to Vestin Mortgage and its chief executive on his second campaign report despite television ads, mailers and other activities paid for by the company on its own.

Vestin and CEO Mike Shustek are in the middle of the attorney general's race, producing and buying TV and radio ads, enlisting the help of NFL great and Vestin spokesman Joe Namath and overseeing a comprehensive effort to elect Hunt.

Shustek said he decided to pour independent donations -- those that are separate or don't go through the campaign -- into the race after Republican Brian Sandoval filed a campaign finance complaint against Hunt's campaign.

The complaint, which is still being examined by the secretary of state's office, alleges that Shustek may have passed through some of the $158,000 in donations to the Hunt campaign through low-level employees at his company to skirt campaign limits.

In an interview Wednesday Shustek said that complaint was filed without any proof.

"That taught me that Brian Sandoval was definitely not the right person for the job," Shustek said.

Because of the company's effort, Shustek needs to file his own campaign finance report with the secretary of state's office but hasn't yet. The report was due Tuesday.

State law requires candidates to file all contributions and expenses in excess of $100 and to list all in-kind donations in excess of $100. All independent entities engaging in political campaigns, whose services are not otherwise noted as in-kind donations to a campaign, are required to file reports.

Shustek said he has not filed yet -- and said it was impossible to know how much he had spent -- because "I don't have all of the bills yet."

"People know me and know my credit's good," he added. "We'll get it sent in."

In addition to $173,000 in cash from Vestin, its related companies and employees, Shustek has also done the following for Hunt:

Shustek said he's engaging in the campaign for Hunt because, "It's something I believe in."

Dan Hart, Hunt's campaign manager, said he has no knowledge of any of the campaign activity Shustek is conducting on behalf of his candidate.

"There's no coordination," Hart said. "I saw an ad on TV today paid for by Vestin that I didn't even know he was doing."

"I was walking my dog over the weekend and saw some door hangers from Vestin Mortgage," Hart added. "I didn't know that was going on either."

Hunt's second campaign report, filed Tuesday, shows three separate $5,000 donations from Vestin-related companies, Vestin Capital, Vestin Group and Vestin Mortgage Advisers. The report also lists $4,044 in in-kind donations from Shustek.

Hunt raised $332,183 in the period from Aug. 23 to Oct. 24 to put his campaign total for this election over $900,000. He reports $32,352 left in the bank as of Oct. 24.

Sandoval raised $353,819 in the same period to put his campaign total over $1.3 million. He reports $53,767 left in the bank as of Oct. 24.

The Sandoval complaint stemmed from $158,000 in cash donations reported on Hunt's August campaign report. Sandoval alleged most of the money was passed through executives to lower-level employees, possibly in the form of company bonuses or increased pay.

State law caps campaign contributions from an individual or company at $5,000 for the primary and $5,000 for the general election. None of Hunt's donors passed the individual $10,000 limit.

Hunt's campaign and Shustek have consistently denied breaking any fund-raising laws, and said the $158,000 was not bundled through lower-level employees to skirt limits.

Shustek again denied the pass-through allegation saying Wednesday that each of the Vestin employees who donated to Hunt were officers of the company earning a minimum of $100,000.

Sandoval's campaign consultant, Pete Ernaut, said he still believes the complaint from the first campaign report has merit. And, he added, voters will ultimately decide whether Shustek's involvement in the race is relevant.

"People should be concerned whether a president of a company with a history of questionable behavior should essentially be trying to buy the attorney general's race," Ernaut said.

Shustek's related company Del Mar Mortgage was seized in 1999 by the state's Financial Institutions Division for violations of a stipulation the company entered to correct violations noted by state auditors.

Vestin has also been sued by a former borrower -- a case still in court.

"The next attorney general will most likely have many oversight and regulatory authorities over that company," Ernaut said.

But Craig Walton, chairman of the Center for Ethics and Policy Studies at the University of Nevada, Las Vegas, said Shustek and Vestin are establishing a clear trail of influence and that makes it "very hard to imagine how they could cash this out (as a favor) later."

"It's not a stealth operation," Walton said.

Walton said casinos have long been an independent influence in Nevada elections, manning campaign war rooms at the hotels, and dumping millions for candidates -- most notably as Venetian owner Sheldon Adelson did in the 1998 county commission races.

Ernaut said he can't believe Shustek didn't file paperwork, as required, on Tuesday. And he said he thought: "After the election, Mike Shustek will be the poster boy for election reform of independent expenditures."

David Damore, a UNLV political science professor, said federal campaign finance reform, which takes effect after next week's election, was designed, in part, to limit an individual's ability to bankroll a campaign independent from the candidate.

"Until that happens at the state level, we'll continue to see this kind of thing," Damore said.

But Shustek said "people are making a bigger thing out of it than it is."

Shustek said his company, which routinely advertises on television, simply replaced some of its spots with spots for Hunt.

"The cost was fairly minimal to us," Shustek said.

Ernaut said he does not think Shustek's campaign will prove any more successful than Hunt's based on polling Sandoval's campaign has done showing Sandoval's lead widening to 15 or more points.

But Shustek said he's determined.

"Brian Sandoval is working hard and John Hunt is working hard," Shustek said. "But I'm the extra force and Joe Namath is the extra force. We're determined and we're going to give it our best shot."