Jon Ralston on what a secret slush fund tells us about Gibbons

Wednesday, March 21, 2007 | 7:25 a.m.

CARSON CITY - Never has innocence looked so much like guilt.

Gov. Jim Gibbons created a secret slush fund, with no indication he ever intended to disclose its contents, violated federal guidelines in setting it up and demolished (at the very least) the spirit of several state laws in accepting what is tantamount to campaign cash when such donations are banned.

So he is guilty of many offenses, including arrogance, obtuseness and dissembling. And, of course, of lawbreaking. But Congress doesn't care because he's no longer a House member - isn't that something? - and this week Secretary of State Ross Miller, troubled by the governor's behavior but handcuffed by loopholes the governor exploited, decided he could do nothing.

I don't fault Miller for not taking this to the attorney general or for not doing more. He was aggressive and professional, and the partisan hacks who went after him, with the governor's tacit approval, were unleashed to muddy the waters.

But what happened here is clear and what it illustrates is more than troubling. It is profoundly disturbing as it is emblematic of a governor who doesn't get it and a system that enables his ilk to flout federal and state laws and pay a small price - at least so far.

The story of the governor's illegal legal defense fund - and we still haven't seen all the donors, folks - is an object lesson in how corrupt the system is and how badly campaign finance reform - the right kind of campaign finance reform - is needed.

Remember that the governor, through a criminal defense attorney he hired to shield him from the secretary of state's legitimate inquiry, continues to maintain it is "not clear disclosure was legally required," as Michael Pagni wrote to Miller last week.

Ask yourself this question: How could it be that the governor thought it was kosher to set up the fund in the darkness - never even asking federal or state authorities for guidance or registering it with either government - and only when a light was shined by the media did he reluctantly open the door to disclosure? And ask yourself this, too: When did he actually intend to disclose money being donated to this fund by major political players and others with interests before him if he did not do it when he was a congressman, as required by law, and only did so tardily on state documents after he was found out?

This is, in a reduction of the hoariest of analogies, the story of the kid caught with his hand in the cookie jar who furtively replaces the "gifts," insists he wasn't trying to conceal anything and will happily gobble up the goodies in plain sight. So the child, like the governor, gets to eat his cookies and have them, too.

Miller said he wants to tighten up the disclosure laws and Democratic state senators introduced a bill this week to codify that legal defense funds fit the statutory definition of a "political purpose" and should not be accepted during the session. That's all fine and I have long argued that any political money should be immediately disclosed on the Internet (48 hours later, perhaps), if not by all elected officials then by the major ones.

Disclosure is paramount and disclosure is what elected officials and many candidates will put off as long as they can. (For a perfect example, consider that early voting is under way in these municipal races and we have no idea who is contributing to these folks and won't have an inkling until next week. And then they can take money for the last week of the election and not have to disclose it for weeks. Ask yourself whom this benefits.)

Gibbons was so desperate to put this issue behind him that he had his lawyer inform Miller that he was shutting down the legal defense fund - perhaps not realizing how ludicrous that sounds right after he hired a prominent D.C. lawyer, Abbe Lowell, whose fees to represent him in an FBI investigation surely will be in six figures. How will he pay Lowell's bills without that defense fund?

I wonder. But the governor probably isn't worried because he formed one secret slush fund stuffed with political money and paid no penalty.

Indeed, he is innocent. Even if he doesn't look the part.