Las Vegas Sun

October 2, 2014

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Lobbyists paid by Clark County sometimes work against it

When the need to curb tax breaks intended to encourage "green" building projects arose late in this year's legislative session, it not only sent lawmakers into a tizzy - it also drove a wedge between Clark County and its lobbyists.

That's because the county's hired guns, lobbying duo Josh Griffin and Tim Crowley, also represented gaming giant MGM Mirage.

The county stood to lose hundreds of millions of dollars in revenue because of the tax breaks and wanted them reduced as much as possible. MGM Mirage, on the other hand, had expected to save about $395 million on its $7.4 billion CityCenter thanks to the tax breaks and wanted to keep as much as possible.

The issue pitted the interests of one Griffin-Crowley client against another.

"They couldn't forcefully advocate for the county because in doing so they would have been forcefully arguing against another client," one county official complained privately. "They weren't able to help us."

The issue highlights a common problem.

The state's most talented lobbyists often boast more than a dozen clients. Indeed, 67 lobbyists in Carson City this year each represented more than 10 clients, making occasional conflicts inevitable.

The client lists of some lobbyists include local governments and special interests that they regulate. When it comes to which client will bear the burden of a tax shift, lobbyists can suddenly find themselves in sticky situations.

Sometimes, the ironies are rich. For example, R&R Partners, one of the state's lobbying powerhouses, represents the Indoor Tanning Association and the Nevada Cancer Institute.

"It's just the risk you take when you hire someone to lobby," County Commissioner Tom Collins said. "You have to deal with whatever their issues are."

Clark County hired Griffin and Crowley in February 2006 at a rate of $5,000 a month until the session began, when the monthly rate jumped to $10,000. Overall, the county paid the pair $105,000. (Griffin and Crowley also lobbied on behalf of The Greenspun Corporation . The Greenspun family owns the Las Vegas Sun.)

Griffin and Crowley disclosed their relationship with MGM Mirage to the county before the county hired them. At that time, however, no one knew that green tax breaks would become one of the biggest issues of the session.

Initially, Crowley said, he did not anticipate any problems representing Clark County and one of its largest employers, MGM Mirage. That's because most of the time, what's good for the Strip is good for the county.

"In 90 to 95 percent of the cases, they are on the same side," he said. "It tends not to be a problem."

But then it was.

Near the end of the 120-day legislative session, lawmakers learned that the state could lose close to $1 billion in tax revenue in the next 10 to 15 years on just seven projects seeking to take advantage of the tax breaks passed by the 2005 Legislature.

Assemblywomen Debbie Smith, D-Sparks, and Marilyn Kirkpatrick, D-North Las Vegas, were charged with fixing the problem.

Throughout the process, Smith said , she spoke with Crowley regularly. There was no ambiguity about whom he was speaking for, she said.

"I talked to Tim primarily about MGM issues," she said.

Throughout the debate over the tax breaks, the county relied on another lobbyist, Mike Alastuey, and its in-house lobbyist, Sabra Smith-Newby. Although those lobbyists were described as steady hands throughout the session, one lawmaker privately referred to them as the "lower-paid lobbyists."

Crowley said Clark County's primary need throughout the debate was simply providing analysis to lawmakers showing how varied proposals would affect the county's financial situation. The county's other representatives were better suited for that role, Crowley said.

Still, County Manager Virginia Valentine said , "There was a conflict."

Initial proposals would have reduced the property tax abatement of up to 50 percent that legislators passed in 2005 to 8 percent.

In the end, though, lawmakers reduced the property tax abatements to 25 percent to 35 percent, and only buildings, not land, would qualify for the tax breaks. The 2005 legislation included sales tax breaks as well, but those were removed for future projects under this year's legislation.

In addition, the state's share of the remaining loss was shifted from 45 percent to 10 percent, meaning Clark County would end up paying more. Although county officials still are estimating the effect, early projections suggest the county could take a $300 million revenue hit over 10 years.

Valentine said the results might have been the same, even with different lobbyists.

"Absent this conflict, I think this bill still would have passed," she said.

But it raises concerns that the county would rather not have in the future.

"If they went to the point of doing harm to the county, I think it would have been appropriate to withdraw as our lobbying firm," Valentine said. "I don't know how close they came."

Valentine said the county plans to review its lobbying efforts to determine what can be done differently in the future.

Other lobbyists and experts on lobbying ethics say there is little that can be done about conflicts beyond lobbyists being up front with clients. And no one disputes that Griffin and Crowley were with Clark County.

In fact, the contract between the county and Griffin and Crowley allows the county to request that they withdraw from representing another client if a potential conflict arises. The county never made that request.

Because Nevada's political landscape is still relatively small, the potential for lobbying conflicts is high. But the small-town atmosphere also makes it difficult to hide conflicts, said Pete Ernaut, a Nevada lobbyist.

"The best thing to do is hang a lantern on it," he said.

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