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July 24, 2014

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More questions raised about Gibbons

The following is the full text of a statement from Abbe Lowell, attorney for Gov. Jim Gibbons and first lady Dawn Gibbons:

Dawn Gibbons, a former Nevada state legislator and businesswoman, had a preexisting relationship with the Nevada-based Sierra Nevada Corp. and its owners that began long before her husband became a congressman.

Based on that relationship and Mrs. Gibbons' state contacts, the company came to Mrs. Gibbons and asked her to help launch a pilot project in Nevada to promote one of the company's crime and security technology products. Mrs. Gibbons and her consulting company did indeed work on this project within the state, spending numerous hours setting up meetings, large press conferences and pilot demonstrations, as well as providing advice.

Mrs. Gibbons had no knowledge about, or influence on, the company's federal contract.

As many Nevadans know, Mrs. Gibbons is a highly regarded consultant on state matters. As a successful consultant, Mrs. Gibbons has had a number of clients, including the Education First campaign, developer Mike Dermody, Jim Gibbons for Governor, the Sierra Nevada Corp. and Justice Hardesty for Supreme Court.

Mrs. Gibbons and her company performed innumerable tasks for these clients, such as managing grass-roots activities, organizing volunteers and supporters, working with charities and other community organizations, overseeing the production of brochures and other print graphics, writing fundraising letters, undertaking door-to-door canvasses and launching public relations campaigns, to name just a few.

Mrs. Gibbons is proud of her work on behalf of these clients, and those who have worked with her will agree that she is a productive, hardworking asset to any project she undertakes. Of course, a professional woman is entitled to pursue professional projects based on her own skills and experience without the assumption that her work is illegitimate solely because of her husband's position. Indeed, it is completely proper for a spouse of a public official to have a career, including serving as a public official herself or working in the private sector to help support her family.

Dawn Gibbons received consulting fees in 2004 and 2005 from a Northern Nevada defense contractor that her husband, then-Rep. Jim Gibbons, had helped obtain government contracts, congressional records show.

On separate financial disclosure forms filed with the U.S. House of Representatives in her failed congressional run last year, the state's new first lady listed more than $5,000 in both 2004 and 2005 from Sierra Nevada Corp.

Her husband, now Nevada's governor, sought funding on Capitol Hill in June 2004 for a $4 million contract for Sierra Nevada to develop a helicopter landing system capable of withstanding a desert sandstorm, records show. The company ultimately received a $2 million contract.

Last year, Jim Gibbons also helped Sierra Nevada win another $2 million contract to upgrade submarines' radar detection systems.

The Wall Street Journal reported Friday that Sierra Nevada paid Dawn Gibbons at least $35,000 in consulting fees in 2004, but that figure does not show up on the two reports she filed with the House.

Dawn Gibbons would not answer questions Friday about her dealings with Sierra Nevada other than to acknowledge that she "did a lot of work for them."

"Everything was aboveboard," she said. "I reported it on my ethics form."

The Sierra Nevada revelations broaden questions about her husband's behavior beyond his relationship with another defense contractor, Warren Trepp. To date, the focus of FBI and Justice Department prosecutors in Washington has been on federal contracts that Jim Gibbons helped win for eTreppid, the company in which Trepp is the majority shareholder.

Much of the Gibbons-Trepp story is contained in a civil lawsuit filed against Trepp by former business partner Dennis Montgomery, who alleges that Trepp rewarded Gibbons with improper gifts, including a pricey private cruise, $90,000 in campaign donations, cash and casino chips. Montgomery alleges in the lawsuit that Trepp tried to steal from him sensitive software sought by the government for the war on terrorism. Montgomery charges that Trepp bought the influence of Gibbons, who then used his clout to have the FBI raid Montgomery's home in Northern Nevada in an attempt to steal the software code.

Last week U.S. District Judge Philip Pro, who is overseeing the litigation between Trepp and Montgomery, ruled that the raid was illegal and that it violated Montgomery's constitutional rights. Pro ordered the government to return everything seized from Montgomery.

Federal prosecutors have begun issuing grand jury subpoenas in Washington for documents. Montgomery's attorney, Michael Flynn, said in court last week in Las Vegas that Montgomery is cooperating in the probe.

Both Gibbons and Trepp have consistently denied wrongdoing, saying that their dealings stem from a longtime personal relationship.

Their defense in the past focused on questioning Montgomery's integrity and the authenticity of damaging e-mails that suggest Trepp tried to buy Gibbons' influence.

In the case of Sierra Nevada, however, Montgomery is out of the picture, which means Gibbons, a former five-term congressman, must defend himself on another front.

Washington lawyer Abbe Lowell, who represents Gibbons in the Justice Department probe, issued a statement Friday saying that Dawn Gibbons had a "preexisting relationship" with Sierra Nevada and its owners (Eren and Fatih Ozmen) that began long before her husband became a congressman.

That relationship continued during her husband's years in Washington. In 2002 then-Assemblywoman Dawn Gibbons nominated Eren Ozmen for a Nevada Women's Role Model of the Year award, and appears in an award-ceremony photo with Ozmen.

"Based on that relationship and Mrs. Gibbons' state contacts, the company came to Mrs. Gibbons and asked her to help launch a pilot project in Nevada to promote one of the company's crime and security technology products.

"Mrs. Gibbons and her consulting company did indeed work on this project within the state, spending numerous hours setting up meetings, large press conferences and pilot demonstrations, as well as providing advice," Lowell said.

Dawn Gibbons "had no knowledge about or influence on the company's federal contract," Lowell added.

Sierra Nevada officials also would not answer questions, but issued a statement Friday contending that "a great deal of misinformation has been circulated" about the company's relationship with Dawn Gibbons.

"Sierra Nevada hired Mrs. Gibbons' firm after the appropriations process involving the helicopter project was completed," company executive Renee Velasco said in the statement. "Her compensation remains among the lowest of outside experts we have ever engaged. However, she provided important work as a public relations consultant, giving the corporation guidance in an area where the corporation had little experience."

Velasco also touted the helicopter landing system that Sierra Nevada developed: "We now believe that, before our service members leave Afghanistan and Iraq, many of our helicopters will be equipped with this life-saving technology and many young men and women will come home (who) otherwise might have been victims of our failure to apply the great technology possessed by the United States."

On its Web site, the Sparks-based Sierra Nevada describes itself as a "progressive defense electronics and manufacturing enterprise" that specializes in creating electronic warfare and intelligence applications, as well as designing military air traffic control and landing systems.

Sierra Nevada boasts of having 900 employees with 22 offices in 13 states from coast to coast.

According to OMB Watch, a Washington government watchdog group, the company is one of the largest defense contractors in Northern Nevada and has received nearly $600 million in government contracts since 1998.

Sierra Nevada and the Ozmens have been regular Gibbons campaign contributors over the years.

Jim Gibbons received $32,450 from them during his 10 years on Capitol Hill, and another $29,500 in his bid for governor last year, records show.

The company and its executives also gave Dawn Gibbons $14,000 for her unsuccessful bid to win the congressional seat her husband vacated last year to run for governor.

The Journal's story Friday reported that the 2004 Sierra Nevada payments to Dawn Gibbons were made through Politek Inc., a public relations consulting firm she created in 2003 after she retired from the Nevada Assembly. The company was dissolved in 2005.

In an August 2003 interview with the Reno Gazette-Journal, Dawn Gibbons said she started Politek because "someone has to make some money in this family." That was a reference to "the $7,400" monthly take-home congressional pay of her husband.

Neither Lowell nor Velasco addressed the reported link between Sierra Nevada and Politek in their statements.

Dawn Gibbons, however, reported on her House disclosure statements receiving a total of roughly $81,000 in salary from Politek in 2004, 2005 and 2006. (Her statements show that she earned $40,069 in both 2004 and 2005, plus $923 during early 2006. The Gibbons camp's refusal to answer questions Friday made it impossible to determine whether she in fact earned the precise same amount in two separate years, or whether the $40,069 figure was incorrectly reported twice.)

Along with the money from Sierra Nevada in 2004 and 2005, she also reported receiving in excess of $5,000 both years from political operative Pete Ernaut and her husband's political campaigns.

When Jim Gibbons ran for reelection in the House in 2004 his campaign paid Politek $93,424 for fundraising and consulting services, according to Opensecrets.org, which is run by the Center for Responsive Politics, a nonpartisan research group in Washington.

But Jim Denton, who served as Jim Gibbons' campaign manager in 2004, told the publication Roll Call that year that the money was intended for someone other than Dawn Gibbons at Politek.

The company also was paid $17,834 for its help in the campaign to pass the Education First constitutional amendment that was sponsored by Jim and Dawn Gibbons. The ballot measure, which was approved by Nevada voters in 2004 and 2006, amended the Nevada Constitution so that lawmakers would have to approve the education budget first.

On his annual financial disclosure forms as a member of Congress, Jim Gibbons for 2003 and 2004 listed Politek as a salary source for Dawn Gibbons. But under House disclosure rules, he was not required to list the amount of income she earned from Politek.

When Dawn Gibbons filed her Assembly financial disclosure statement in January 2004, she also listed Politek as a source of income. But under state law she was not obligated to reveal the amount of her income or her clients.

Sun reporters Steve Kanigher, Mary Manning, Lisa Mascaro and Cy Ryan contributed to this story.

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