Lawsuits promise headaches for Gibbons

Saturday, Nov. 18, 2006 | 7:18 a.m.

New court filings in a federal civil lawsuit alleging that Rep. Jim Gibbons took unreported gifts from a federal contractor promise to be an ongoing political headache as the governor-elect prepares to take office next year.

The legal battle between Warren Trepp, a friend and supporter of Gibbons who owns a software company with government contracts, and a software developer and former business partner of Trepp, was first reported this month in a front-page story in The Wall Street Journal.

The lawsuit and countersuit between Trepp and the software developer, Dennis Montgomery, involve a conflict over valuable computer code used by the government in national security matters.

Trepp has accused Montgomery of stealing and deleting property of Trepp's company, Reno-based eTreppid Technologies.

Montgomery has alleged that Trepp, a philanthropist and businessman who lives in Reno, gave Gibbons unreported gifts in exchange for helping Trepp win government contracts and muscle Montgomery out of ownership of the software code that Montgomery developed.

Specifically, Montgomery contends that Trepp influenced Gibbons, who in turn pressured U.S. Attorney Daniel Bogden and the FBI to conduct an illegal search of his home and storage unit in an attempt to steal the software code.

In addition to contributing $90,000 to Gibbons' gubernatorial campaign, Trepp also took the Gibbons family on a Caribbean cruise that the congressman failed to report to the House Ethics Committee.

Gibbons has said that the two are longtime friends and that the failure to report the cruise was a mere clerical error and not an attempt to conceal anything. He and Trepp also note that the campaign donations comply with Nevada law.

Trepp and Gibbons have denied allegations that Trepp was trying to buy influence, calling the accusations "outrageous."

John Negroponte, director of national intelligence, invoked a "state secrets privilege" in the civil cases and asked a federal judge in September to seal the cases because open hearings could cause "exceptionally grave damage to the national security of the United States." Many of the court documents are sealed and court proceedings are being held in secret.

The case was further complicated earlier this month when U.S. District Judge Brian Sandoval, formerly a prominent Nevada Republican and the state's attorney general, recused himself the day after Montgomery gave Sandoval a secret, detailed declaration about the case.

The new court documents, filed this week, shed new light on the case and promise legal wrangling on both sides.

Montgomery filed a brief Monday that asked the court to unseal certain court documents while protecting the sensitive national security information. The brief supports a suit filed by the Nevada Democratic Party prior to the Nov. 7 election aimed at opening the sealed court documents.

The brief filed by Montgomery's attorney says the court "must decide if the people of Nevada are entitled to know the facts involving this illegal search" - referring to the FBI search of Montgomery's home and storage unit - "and Gibbons' involvement with Trepp."

Trepp's attorneys argue that the Democratic Party's motion to unseal the records is irrelevant because the election has come and gone; that the Democratic Party sought access to proprietary and trade secret information that could damage eTreppid; and that any alleged improper link between Trepp and Gibbons is not supported by any evidence.

Trepp also has sued Democratic state Chairman Tom Collins, who repeated Montgomery's allegations about gifts from Trepp to Gibbons.

Collins' claim "is the most outrageous statement I have ever seen," Trepp wrote in an e-mail to the Sun on Friday.

In court documents filed Friday, Montgomery listed all of the case's interested parties in requesting whether the new judge, Larry Hicks, should consider recusing himself.

The list is intended to support Montgomery's claim of a conspiracy - including elements of the U.S. government - to steal his technology.

Included on the list of those who could financially benefit from Trepp are Gibbons, but also Air Force Gen. Ronald Bath, FBI agents and Michael Milken.

Trepp once sat at the side of Milken - the junk bond trader of the 1980s who since serving a prison term for illegal trading activities has become a major philanthropist - as his chief trader at Drexel Burnham Lambert. Montgomery alleges that Trepp made Milken a silent partner in eTreppid.

In a separate matter, Gibbons was re-interviewed last week by Metro Police concerning an allegation that he last month assaulted a woman while trying to force himself on her sexually. Gibbons has denied the allegation.

Sun reporter Steve Kanigher contributed to this report.