Thursday, March 16, 2006 | 6:49 a.m.
Nevada Attorney General George Chanos says he bailed out of the election this year because his five months in office taught him that "the system stinks."
If he had stayed in the race, that system would have heaped innuendo and allegations upon him based on extensive opposition research being conducted to aid his Democratic opponent, Catherine Cortez Mastro.
The research focused on his past ties to convicted telemarketers, the sources of a large portion of his $1.14 million in campaign contributions and other things - all of which Chanos says he could have readily neutralized.
Chanos said he was prepared for a fight, but decided in the end that it wasn't worth it to him to go through it.
"I knew going into this that I was up against Billy Vassiliadis and Sig Rogich, and that Catherine Cortez was the daughter of Manny Cortez, who fed these guys the past several years," Chanos said.
Vassiliadis and Rogich, two of the most powerful political consultants in the state, are unpaid consultants to the Cortez Mastro campaign. Over the years they have had strong financial ties to the Las Vegas Convention and Visitors Authority, once run by Manny Cortez.
"I was willing to put up with the fight if I felt that I could do something to change the mentality of politics and break down the barriers of partisanship and do something good," Chanos said. "But my attitude is if I'm not going to accomplish anything here, then why put up with it.
"I don't need this job. I don't need the $100,000 a year. I don't need the aggravation. I can do other things with my life and be happy."
Whether Chanos could have fended off the attacks isn't known. There is no doubt, however, that the attacks were coming.
"There was a lot of research being done on the guy," said one well-placed source tied to the Cortez Masto campaign. "I don't think there was any silver bullet, but there was a lot of stuff, some concerning his family, that may have been highly embarrassing.
"He didn't really have a clue as to how rough the game could get."
The source said some of what was being researched got back to Chanos, but Chanos said he had heard nothing of the kind.
Even before the research, Democrats had plenty of issues to toss into the political arena.
The attorney general took heat over his decision to launch an investigation into the city's land dealings with wealthy developer Bill Walters after both Sheriff Bill Young and District Attorney David Roger had concluded that such a probe would go nowhere.
Chanos also was criticized for his own land deal with the city, which he says netted him a nearly $4 million profit from his $100 investment.
And Chanos appeared to come out on the losing end of a public battle with Assembly Majority Leader Barbara Buckley, D-Las Vegas, over the legality of importing prescription drugs from Canada.
Had Chanos stayed in the race, he faced potential criticism in other areas, according to a background investigation prepared for the Nevada Democratic Party by Varoga & Rice, a political research outfit with offices in Oakland, Calif., and Houston.
His ties to a couple of shady telemarketers, a frequent target of the attorney general's office, almost certainly would have become an issue.
In November 1995, for example, records with the Nevada secretary of state's office show that Chanos helped form the 4040 Club LLC and was listed as a member. Its articles of incorporation offered no hint about its business activities, and the company dissolved in June 1996.
But one of its fellow members was Paul Pasqualotto of Las Vegas, one of 17 people later indicted in August 1996 on racketeering charges in a telemarketing scheme that occurred before the 4040 Club was created.
Federal authorities accused Pasqualotto and his co-conspirators of overcharging consumers for such merchandise as cosmetics and vitamins while failing to deliver on promises of jewelry, televisions and other big-ticket items in exchange for their purchases.
Pasqualotto pleaded guilty to one count each of racketeering and racketing conspiracy and was sentenced in 1998 to 10 months in federal prison. He was also ordered to pay $2 million in restitution.
Chanos said he got to know Pasqualotto from the legal work he did for Pasqualotto and his telemarketing business.
The 4040 Club, Chanos said, never ended up conducting any business.
"We talked about forming a cigar club, but it was an idea that never went anywhere," he said.
Another defendant in the telemarketing case was Las Vegan Richard Secchiaroli, who was convicted and sentenced in 1998 to 51 months in prison and ordered to pay nearly $21 million in restitution.
Secchiaroli was listed as a manager briefly of a company that contributed $10,000 to Chanos' campaign in June 2005, records show.
That company, Sunbelt Investment Management LLC in Henderson, was formed two months before the campaign contribution. The company is now managed by Hamid Mahban of Henderson, who is a partner with Secchiaroli in a nonprofit Nevada corporation, Care For the Gulf.
Chanos said Secchiaroli was once a legal client. But the attorney general said he did not know Secchiaroli was once part of Sunbelt Investment. Mahban, Chanos said, is a college friend he has known for 25 years.
Secchiaroli, meanwhile, also had a relationship with Las Vegas businessman Michael Mona Jr., who used his companies to contribute $18,801 in money and in-kind services to the attorney general's campaign.
Mona had been criticized by the state Gaming Control Board in 1998 for his association with Secchiaroli and other telemarketers who had brushes with federal regulators. The criticism came as Mona sought a casino license for his Sunrise Suites Hotel on Boulder Highway. He withdrew his application following the board's remarks.
"I regret meeting them, but I cannot deny the relationship," Mona told the board.
Mona, who had employed Chanos as his attorney when Chanos was in private practice, wound up declaring bankruptcy in 1999. The property eventually became the casino Arizona Charlie's East under the ownership of New York business tycoon Carl Icahn.
Chanos defended his association with Mona.
"I consider Mona a legitimate businessman," Chanos said. "I respect and admire his success in business, and I feel that he was treated unfairly with respect to his gaming application.
"I think he was painted with a black brush by virtue of his friendship with someone who had violated the law."
In January, Chanos filed a campaign contribution and expense report for the 2005 calendar year, reflecting $1.14 million in cash contributions and $71,111 in in-kind donations.
A large chunk of that cash came from a handful of donors who took advantage of a Nevada campaign finance law that allows candidates for statewide office to accept maximum $10,000 contributions from multiple corporations that share the same owners or addresses. This practice is commonly known as bundling.
Of Chanos' cash contributions, $285,500, nearly one-fourth of the total, came from New York donors.
About $80,000 of those contributions came from eight limited liability companies that list a Brooklyn business address shared by diamond mogul Lev Leviev of Israel and prominent real estate developer Jeshayahu Boymelgreen of New York.
The two reportedly teamed up with Las Vegas developer and former Chanos client Brett Torino last year to purchase a strip mall near the MGM Grand and are thought to be interested in building a hotel and luxury apartments in Las Vegas. Companies affiliated with Torino contributed $115,000 to Chanos last year.
Forbes Magazine, which lists Leviev as the world's 278th wealthiest individual with a net worth of $2.6 billion, stated that he "cuts and polishes more diamonds than anyone else in the world." Forbes also reported that Leviev is the largest private Israeli investor in Las Vegas.
Other publications, however, have questioned Leviev's business relationships and ties to political leaders such as Russian President Vladimir Putin. A 2002 article for the nonprofit Center for Public Integrity, a Washington-based investigative research organization, tied Leviev to a reputed "arms smuggling" entrepreneur in a since-dissolved business partnership involving the diamond industry in Angola.
Chanos said he knows nothing about Leviev and Boymelgreen, and he believes that Torino got them to contribute to his campaign.
"I don't know these gentlemen, but I'd love to meet them," he said.
In addition to Leviev, Boymelgreen and Torino, other bundled donations to Chanos' campaign were connected with his cousin, Wall Street investor James Chanos ($67,500) and Venetian owner Sheldon Adelson ($67,038). The five bundlers combined accounted for roughly 30 percent of the attorney general's campaign contributions.
Chanos insisted that the opposition research the Democrats did on him would not have caused him to leave the race for attorney general.
"I think less of the people who are digging this up than any of the people you have named," he said.
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