Sunday, Jan. 22, 2006 | 8:45 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].
Nevada law says candidates can accept a maximum of $5,000 per donor for the primary election and another $5,000 for the general election.
Contributors and candidates say otherwise.
Last week's release of the 2005 campaign finance reports shows that politicians hungry for more money and donors hungry for more influence routinely circumvent the law.
They do so because opinions by the state attorney general give them cover by sanctioning their behavior -- and rendering the contribution limits meaningless for the moneyed.
Millions of dollars poured into campaign coffers last year in state and local races. The financial gears meshed in a system that amounts to legalized extortion for those seeking the money, and sanctioned bribery for those currying favor.
Once again, bundling was in full flower, especially in the governor's race. The term refers to a practice employed by major donors who deploy multiple corporate entities to bust contribution limits.
This year, candidates in the Democratic primary have already raised nearly $3 million -- a chunk of which plainly punctures the limits. One of the candidates, either Henderson Mayor Jim Gibson or Senate Minority Leader Dina Titus will lose the primary. Yet both have collected more than the $5,000 primary limit from donors, another clear flouting of the spirit of campaign laws. This has occurred in other contests, too, including the battle for attorney general.
So let's explore where the money is coming from, where it is going and exactly how these laws are being bent to the breaking point.
The law on contribution limits is not opaque. Nevada Revised Statute 294A.100 says:
"A person shall not make a contribution or contributions to a candidate for any office, except a federal office, in an amount which exceeds $5,000 for the primary election or primary city election, regardless of the number of candidates for the office, and $5,000 for the general election or general city election, regardless of the number of candidates for the office, during the period."
As defined in the law, a "person" could also refer to a corporation or partnership or political action committee - that is, they too, supposedly, are bound by these strictures. Supposedly.
Now gaze at what is happening this year.
Las Vegas Sands boss Sheldon Adelson, who is a person with many corporations, has used various entities to make a mockery of these limits.
Bundling through various corporations, Adelson has sent contributions totaling nearly six figures to Republican Rep. Jim Gibbons' campaign for governor. Adelson has sent almost as much to Attorney General George Chanos' election bid, and another $35,000 to Treasurer Brian Krolicki's attempt to move up to lieutenant governor.
But Adelson is far from the only bundler. The Fertitta brothers, Lorenzo and Frank III, through their various Station Casino-related corporations, have essentially matched Adelson's contributions to Gibbons. They have used the same ploy to give $40,000 to Gibson and $25,000 to Titus.
Bundling but not anointing, apparently, is the new Station motto.
Two new players in the bundling game this cycle are gamer/developer Tony Marnell, who used a variety of corporate entities and business associates to show his gratitude to Henderson by bolstering Gibson's war chest by $150,000. And developer Brett Torino has given, through many different entities, nearly as much to Chanos, a former client and obviously current friend.
Others, too, have leapt onto the bundling bandwagon. I would be remiss not to mention the Greenspuns, owners of the Sun, who gave Gibson at least $60,000. University Chancellor and KVBC-TV boss Jim Rogers bundled $40,000 to give to Titus. Jeff Guinn, the governor's son, slipped $30,000 to his dad's pal Gibson through three contributions.
This is not a new phenomenon - in 1996, Circus Circus Enterprises set the reported record with $300,000 to then-candidate and now Gov. Kenny Guinn, with Station in a respectable second, sending $80,000 to the anointed governor-to-be.
Major gamers and developers have used the scheme for many cycles.
The question you might be asking is, since the limit is $5,000 per election: How can this be legal?
Here's how:
In a 1994 opinion that is a model for tortured logic, Attorney General Frankie Sue Del Papa argued that the Nevada law "does not address this issue (of corporate entities with the same parent all contributing the maximum amount), and in Nevada, corporate ownership is not a matter of public record, nor is any interrelationship between business associations."
Really?
Yes, it would be difficult to discern that companies starting with the name "Venetian" belong to Adelson or that those with the word "Station" in them belong to the Fertittas.
The opinion goes on to argue: "Courts recognize that corporations solely owned or controlled by one or a few individuals or by other corporations do not, by virtue of such stock ownership alone, lose their identities as distinct legal entities. Just as a holding or parent corporation has a separate corporate existence and is to be treated as a separate entity, so, too, are subsidiary corporations ordinarily independent of each other."
So the reductio ad absurdum out of this opinion is that an entity known as Boulder Station could be operating independently as a campaign contributor as one called Palace Station. Or that Rogers is not controlling the maximum donations to Titus from his Reno TV station, his Las Vegas TV station and two other corporate entities.
But Del Papa's green light more than a decade ago has turned the plain letter of the law into a murky mess, where the $5,000 limit per election is blown through as easily as drivers accelerate past 55 mph limits on highways.
The only difference: One's a crime and the other's not. (The contribution limit statute, by the way, says that anyone "who willfully violates any provision of this section is guilty of a category E felony.")
Thanks to that opinion, though, no one running or contributing is going to jail for one to four years. And yet another wink and nod from the attorney general, this one from 1997, allows candidates such as Titus and Gibson, fully aware they may not be around after the primary, to flout the $5,000 cap and take the $5,000 supposedly targeted for the general, too.
All the losing candidate has to do, according to the opinion, is "return any contribution which exceeds $5,000 to the contributor not later than the 15th day of the second month after his defeat."
And since Titus will remain in the state Senate should she lose in the primary, and Gibson will remain Henderson mayor if he loses, they should be able to find plenty of folks willing to raise money so the candidates can return money.
As for the law mandating the strict caps for each election, thus supposedly limiting what you can spend in each contest, just ignore it and you have an attorney general's opinion to back you up.
Reform efforts generally will fail until either an attorney general opines differently or specific prohibitions are etched into Nevada law. The spirit - if not the letter -- of the statute is being flouted routinely and will be for the rest of this year.
You might think that disclosure and the consequent attention are a deterrent. But consider this: After the most recent reports, the next time any of the candidates have to disclose any contributions, bundled or otherwise, is Aug. 8, one week before the primary.
Just imagine what will be going unreported until then.
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