Sunday, Jan. 8, 2006 | 7:47 a.m.
Jon Ralston hosts the news discussion program Face to Face with Jon Ralston on Las Vegas ONE and also publishes the daily e-mail newsletter RalstonFlash.com. His column for the Las Vegas Sun appears Sunday, Wednesday and Friday. Ralston can be reached at 870-7997 or through e-mail at [email protected].
George Chanos is learning the hard way about the school of hard knocks. And I am not talking about the attorney general's controversial decision to cast a pall over popular drug importation legislation, an opinion that may be legally sound but is politically treacherous.
I am referring to his interaction -- somewhat removed though it may be -- with the fine local government entity known as the Las Vegas City Council, notable for its burgeoning scandals and horrific treatment of whistleblowers.
Chanos wanted to investigate the council's dealings with developer Bill Walters but then immediately recused himself because of a pending government action on land he is selling that reportedly could net him an eight-figure payday. Since Chanos brought in an outside firm and put the property in a blind trust to avoid any ethical questions, the general assumption has been that he won't get his cash unless the council approves an application by the developers to vacate a street downtown so they can build a 900-foot-high condo project.
Not only have I discovered that is not true and that Chanos essentially has no conflict at all, but I also have found that the chairman of the city's Planning Commission, in a very strange letter to the city attorney's office just before the new year, accused a representative of the attorney general's blind trust of trying to mislead the city about the deal.
This all comes to light only a few days after Las Vegas Mayor Oscar Goodman, frothing about a potential "witch hunt" by Chanos and mewling about the attorney general substituting his judgment for the fine council's on the price of that sweetheart deal with Walters, had the item struck from the council agenda.
Goodman said he was doing it to ensure the city doesn't add to the clouds over Stewart Avenue. But if he also was trying to postpone Chanos' windfall, he can't do that. And that is what everyone has missed here. The contract between Chanos and the would-be developers of the Wall Street Towers is what is known as a noncontingent agreement -- that is, there are no conditions attached, no stipulation that the deal is void without council approval of the item.
The developers already have paid a nonrefundable $750,000 deposit and owe the rest to the Chanos trust next month. So the attorney general is entitled to his money no matter what the city does on the Wall Street application.
You can argue that this means he never should have recused himself -- and I thought the conflict was tenuous in the first place without his revelation. And maybe he should be conducting the Walters probe, instead of giving it to a San Francisco law firm no one knows much about.
But Chanos insists that the appearance made him do it, and I suppose it can also be argued that the developers would have more ability to pay him off if they get city approval.
Just as interesting as this disclosure is a letter that Planning Commission Chairman Richard Truesdell wrote to Assistant City Attorney Brian Scott on Dec. 28 in which he accuses attorney Alan Sklar, who is overseeing the Chanos trust, of calling him and misleading him about Chanos' interest.
Truesdell, in the missive, described being "disturbed" about the phone call and accused Sklar of "a gross misstatement" by telling him that Chanos "has no interest in the property" because of the blind trust.
Sklar, contacted Friday, said he was outraged by the letter. "It's terrible, it's disgusting and it may even be actionable," Sklar said. The attorney added that he never made such representation to Truesdell because it's not true.
"It doesn't pass the logic test," Sklar said. And it is noteworthy that Truesdell wrote the letter four weeks after the conversation -- almost as if he wanted it to become a problem for Chanos. But perhaps I am too suspicious? I wanted to ask Truesdell, but he did not return a phone call.
By the way, this project may be controversial, too. Goodman gushed Wednesday about how wonderful it is. But the staff recommended denial and there are several protests, including quiet ones from other condo developers and loud ones from activists in a nearby neighborhood who oppose many aspects of it, including its height.
Yes, there is a lot that's fishy about this situation. But I should have expected no less when so much money is at stake, a campaign season is under way and the local government involved invites suspicion.
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