Thursday, May 22, 2003 | 11:14 a.m.
The federal public corruption investigation involving Clark County Commission Chairwoman Mary Kincaid-Chauncey allegedly involves a payment by a strip club owner put into a trust fund.
Kincaid-Chauncey has said she received a donation from the Galardi family, which owns several strip clubs, and put it in a trust fund that helps children whom she works with.
She has not been specific -- at least publicly -- about her legal relationship, if any, to the trust fund where she said the contribution was deposited. She has also not indicated whether any of the beneficiaries have lived with her.
If the trust is related to a business entity operated for economic gain that involves an elected official or a member of his household, it must be listed on financial disclosure statements that office holders in Nevada are required to file annually. However, a lawyer, a professor and the executive director of the Nevada Ethics Commission said the state law is ambiguous as to whether that requirement extends to trust funds, such as those for children.
The financial disclosure statements filed with the ethics commission require the office holder to "list each business entity (i.e. organization or enterprise operated for economic gain, including a proprietorship, partnership, firm, business, trust, joint venture, syndicate, corporation or association) with which you or a member of your household is involved as a trustee, beneficiary of a trust..."
None of Kincaid-Chauncey's financial disclosure statements, dating to when she first joined the County Commission in 1997, mentioned a trust.
Las Vegas lawyer Russell Bowler, a member of Jeffrey L. Burr & Associates, which specializes in estate planning, said trust funds typically involve the person who set up the trust, the trustee who administers it and the beneficiary. Depending on the trust, the same person can serve in more than one of those roles, he said.
Bowler said trusts also have different rules as to how the money is paid out. Some trust funds are not collected by the beneficiary until the person who created the fund dies. In other trusts, money is paid out periodically.
He said trusts set up to benefit children aren't normally considered to be business entities. But when read the definition of what needs to be listed on an elected official's financial disclosure statement, Bowler said, "Who knows what the state's intent was?"
Stacy Jennings, executive director of the ethics commission, said the issue of whether trust funds must be disclosed is one that has never come up in her year on the job.
"If someone asked me whether they should report it, I would say that to be on the safe side report it if someone in your household is a beneficiary," Jennings said. "But I can't give you a lot of guidance on this."
UNLV Professor Robert Aalberts, who teaches legal studies with an emphasis on finance, said he didn't regard a trust fund for a child as a business entity. But he said a trust fund that involves periodic payments to a child who lives in the household of an elected official can be viewed as an economic benefit for that household.
Elected officials in Nevada also are required to disclose gifts from donors in the prior year that have an aggregate value of at least $200. None of Kincaid-Chauncey's disclosure statements since 1997 mentioned any gifts from the Galardis.
Most of the gifts she has reported since then were provided by the Las Vegas Convention and Visitors Authority, for which she has served on the board. The only other donors she listed were Las Vegas Events and the Economic Opportunity Board.
Craig Walton, University of Nevada, Las Vegas, ethics professor,said the strip club owner was probably not making a contribution out of philanthropic motives.
"There are ways to do that," he said. "They can give anonymously. People will give in the name of their dad or mom, or even the name of their company."
Cash contributions for thousands of dollars are unusual, he said.
"To say this is for needy young kids, it's not a plausible story," Walton said.
Kincaid-Chauncey should have known that, Walton said.
"There is an issue there," he said. "You have to distance yourself. A public person has to distance himself from a vested interest. Figure out a different way -- don't give it to me and don't put it through me.
"It's hard to say what kind of environment would lead someone to believe that envelopes stuffed with money is the way that giving is done."
But proving wrongdoing could be more difficult, Walton said. The investigators have to prove that Kincaid-Chauncey accepted a gift that confers "unwarranted benefit, unwarranted privilege" on the donor.
Walton, who is a member of a newly convened Clark County task force on ethics, said the commissioner should have realized that the issue could be trouble. Las Vegas had decades of history of politicians tainted by questionable money.
"We're living in a town where it's hard to trust public officials because of this history," he said."That ought to make you more sensitive."
"Even if it is just the appearance of impropriety, even no actual wrongdoing, then that looks wrong," he said. "This goes back to at least Julius Caesar."
Paul Brown, Southern Nevada director of the Progressive Leadership Alliance of Nevada, agreed. He said it is highly unusual to use cash contributions for any purposes, and such contributions usually would end up in a campaign account.
"You start adding those up, and it's past just being an incredibly dumb thing to do," he said, adding that he is basing his opinion on media accounts. "Whether or not she committed a crime is for others to decide."
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