FBI plans no formal investigation into lobbying on tax issue

Jace Radke

Monday, Oct. 20, 2003 | 10:45 a.m.

The FBI will not conduct a formal investigation into possible undue lobbying pressures exerted during the tax debate in the 2003 Legislature, a source familiar with the FBI's review of information about the situation said.

The FBI had started asking questions about actions taken by at least one member of the gaming industry against a business that opposed a favored tax plan, but all of the questions were preliminary in nature in order to determine if an investigation would be opened.

Nothing was found that indicated illegal activity, and a formal investigation will not be opened, officials said.

The FBI questioned Sen. Mark Amodei, R-Carson City, earlier this month, but Amodei has said he does not have any first-hand information of any illegal lobbying during the session.

At issue were the actions of Harrah's and Harvey's, two major hotels owned by Harrah's Entertainment Inc. at Lake Tahoe. The hotels canceled their contracts with Capital Beverage of Carson City, the supplier of Budweiser.

The gaming industry had backed a plan for a broad-based business tax, but Kurt Brown, owner of Capital Beverage, had backed an alternative plan in which employers would be taxed based on their payroll.

Gary Thompson, spokesman for Harrah's, said the hotels did not violate the law. He said the company sent Brown a letter in July, signed by Harrah's Chairman Phil Satre, that said the gaming company would not do business with a company that supported a plan that was detrimental to the firm.

Amodei had included in his tax package a plan similar to the one supported by Brown.

Harrah's initially said it made a business decision that it received a better price from Coors and would realize more profits than if it kept dealing with Budweiser. But later it disclosed in the letter that it was canceling its business with Capital Beverage because of the disagreement over taxes.