Chanos: Walters probe up to next AG

Tuesday, Nov. 28, 2006 | 7:17 a.m.

Nevada Attorney General-elect Catherine Cortez Masto will have to decide what, if any, legal charges might arise from a long-running investigation of developer Bill Walters' aborted land deal with Las Vegas, Attorney General George Chanos said Monday.

Chanos, who was appointed to the position last year and almost immediately launched an investigation into a controversial deal that would have allowed Walters to build 1,200 homes in place of his Royal Links Golf Club, said Monday on "Face to Face With Jon Ralston" that his office's probe is ongoing.

A decision on how to proceed, he added, will rest with Cortez Masto, a former prosecutor with the U.S. attorney's office and assistant Clark County manager who was elected Nov. 7 to succeed Chanos.

Chanos, who chose not to run for the state post, said he has discussed the case with Cortez Masto, who could not be reached Monday.

"It will be up to her to see what she wants to do with it," Chanos told Ralston on Las Vegas ONE (Cox cable channel 19). "She has encouraged us to go forward with our continuing investigation."

Two of his deputies, Conrad Hafen and Gerald Gardner, are shepherding the investigation, Chanos said.

Although he noted that Hafen, chief deputy for criminal investigations, would ordinarily work with a grand jury, Chanos declined to comment on whether there had been or would be a grand jury investigation into the issue. Grand juries typically work in secret.

"One of the tools we have available to investigate this is a grand jury," he noted. "Investigations are ongoing."

A 160-page study released last month by Chanos drew no conclusions "regarding criminal conduct of any individual" in the land deal, but found that Nevada's "public purpose doctrine" - which prohibits the use of public property for private purpose - had been violated in the city's dealings with Walters.

As a golf course, the report noted, the Royal Links property serves as a buffer zone between a city-owned wastewater treatment plant abutting the course and homes in an unincorporated portion of Clark County. But conversion of the golf course to a residential community would remove that public value, the report concluded.

Chanos, concerned over a possible conflict of interest because he had a land deal pending before the City Council at the time that the council was considering Walters' project, hired a San Francisco law firm to conduct the investigation that produced that report.

The relationship between Walters and City Hall drew intense publicity in November 2005 when Walters won City Council approval for a change in a deed restriction on 160 acres of land that the city had leased to him in 1997 and sold to him two years later for use as a golf course.

Walters needed the deed change to build homes on the land, which would have significantly increased the property's value.

Home construction on the land also would have affected operations at the wastewater treatment plant, potentially requiring millions of dollars in improvements at the facility.

Walters offered the city $7.2 million to lift the deed restriction, but critics said the benefit to Walters and the cost to the city could have been significantly greater.

Two weeks after the City Council approved the change, Chanos promised an investigation. A day later, the council rescinded its decision.

Walters and Richard Goecke, a now-retired former Public Works director for the city, declined to be interviewed for the 160-page report, but Chanos promised that he would use subpoena power to compel their testimony if necessary.

The two will speak "in some venue," Chanos told Ralston.

Citing the ongoing investigation, Chanos declined to say what questions have been asked and answered by others.

"At this point, I don't think it benefits my investigation to have these questions out in the public," he said. "The people who would be asked these questions would then have a preview."

Walters declined to comment Monday on Chanos' remarks.

Las Vegas issued a one-sentence statement and declined further comment: "The city has cooperated fully with the attorney general's investigation and will continue to do so."