Public tax break, private leak?

Governor’s ally suggests Dawn Gibbons revealed details of Elko land decision

Wednesday, July 16, 2008 | 2 a.m.

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Gibbons vs. Gibbons

Gov. Jim Gibbons had hoped for a fresh start. After an inglorious 18 months in which his public approval sank below President Bush’s, Gibbons shook up his senior staff and succeeded in avoiding tax hikes by prodding state legislators to make painful budget cuts. The governor seemed poised for a do-over.

But another damaging story has emerged, this one about a questionable tax break the governor received after putting pressure on a county tax assessor.

Now an ally of the governor’s fears the story originated with first lady Dawn Gibbons, from whom the governor filed for divorce in May.

If true, this development would be a setback, politically and personally, as the Gibbonses had recently declared a truce in part to stanch the bad publicity.

First, the story: In 2007, Gibbons bought 40 acres of land for $575,000 in Elko County with plans to build a retirement home. As the Associated Press reported last week, the elected Elko County assessor, Joe Aguirre, said Gibbons had placed him in an “awkward” and “uncomfortable position” when he asked him to characterize the land as agricultural rather than residential.

Doing so would reduce Gibbons’ tax liability on the land from about $5,000 to virtually nothing. If Gibbons used his position as governor for personal financial gain beyond his salary, he could be subject to an ethics complaint.

The tax break was created to help struggling ranchers and farmers.

Although Gibbons isn’t using the land for agriculture himself, he leased the land back to the original owner, former District Judge Jerry Carr Whitehead, who reportedly left the bench while under federal investigation in 1996.

Whitehead uses the land for grazing. By law, the land must yield at least $5,000 in revenue to be classified agricultural. Whitehead wrote checks totaling about $5,700 to Gibbons in exchange for the land.

But Aguirre doubted the 40 acres was really worth what Whitehead was paying. In essence, he said, the land isn’t truly producing $5,000 in agricultural revenue, and the Whitehead payment was inflated so that it crossed the threshold for the tax exemption.

Aguirre, a Republican, was interviewed on “Face to Face with Jon Ralston” on Tuesday and fleshed out some details. He said the governor visited him at his office in September and asked for the agriculture designation.

He refused, but then Gibbons hired John Marvel, a member of the state Tax Commission, to be his attorney in the matter.

“I felt like they backed me into a corner,” Aguirre told Ralston. If Gibbons wanted to appeal Aguirre’s decision, he wouldn’t do so at the state Tax Commission. He would go to the county and then to the state Board of Equalization.

Still, the state Tax Commission sets tax policy and rules on exemptions, and as such, has tremendous power over county assessors such as Aguirre.

Ben Kieckhefer, a spokesman for Gibbons, said, “The governor dropped into the assessor’s office about maintaining the agricultural deferral. As a property owner and taxpayer it seems appropriate. I think it’s reasonable that anyone would do the same.”

Kieckhefer also said Marvel is a respected attorney with experience in tax and land use issues in Elko County and so was a natural choice.

Robert Uithoven, Gibbons’ former campaign manager and an adviser, also defended the governor. Aguirre, he said, is “enjoying his 15 minutes” and “this idea he was intimidated into making the wrong decision, if that’s the case, he’s the wrong man for the job.”

Uithoven said it was up to Whitehead to determine the agricultural value of the land, not the county assessor.

Rural Nevadans, who constitute much of the remaining Gibbons base of support, are well versed in the agriculture tax break and are on guard against its abuse. An Elko Republican, who asked not to be named because he has business before state government, said rural residents are “extremely protective of the agricultural break because in some cases it’s the difference between success and failure. Anytime anybody tries to exploit it or abuse it, it puts the measure at risk.”

Steve Wark, a Republican operative, acknowledged on “Face to Face” that Gibbons’ latest problem looks bad, but he said the remaining pool of Gibbons’ supporters is so small it probably won’t matter much.

Here’s what should be of greater concern to Gibbons. One of his allies, who declined to be named discussing the governor’s divorce, said the tax break story likely originated with a leak from Dawn Gibbons or her divorce attorney, who would have access to the financial records — including the money from Whitehead.

The recent public truce between the Gibbonses hadn’t ended the sensational stories about Gibbons’ personal life, but the detente did seem to eliminate significant obstacles — accusations and recriminations — to finishing the divorce.

Now, though, “the truce is over,” the source said.

Dawn Gibbons’ attorney, Cal Dunlap, did not return a phone call from the Sun.

Discussion: 11 comments so far…

By texexnv

7/16/08 at 7:38 a.m.

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The "truce" was falsetto at best and of no importance.

What is of greater importance here is that the gubber and Judge Whitehead conspired to defraud the State of Nevada in a quite infantile and transparent tax evasion scheme.

So where is the AG on this matter?
By benighse

7/16/08 at 10:40 a.m.

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IT DOESN'T MATTER WHERE THE STORY COMES FROM. WHAT MATTERS TO NEVADANS IS WHAT IS THE TRUTH. AND CONSIDER FOR A MOMENT THAT NEVADA IS A COMMUNITY PROPERTY STATE AND THIS WAS BOUGHT DURING THEIR MARRIAGE, SO IT'S AS MUCH DAWN'S PROPERTY AND TAX ISSUE AS JIM'S. AND WHILE JIM IS SEEN GALAVANTING WITH DOCTOR'S WIVES; DAWN IS SEEN HUGGING DOCTORS IN WINGFIELD PARK--SO WHO CARES ABOUT ALL THAT NONSENSE!!

FIRST: GET ALL OF THE FACTS, WHATEVER THEY ARE:

A) HE PAID $575,000 FOR 40 ACRES INTENDED FOR A RETIREMENT HOME; NOT JUST 'TIL THE COWS COME HOME.
B) THE SET PROPERTY TAX FOR THIS LAND ON THE BASIS OF THAT PURCHASE WAS $5,000.
C) HE NOW WANTS THE $575,000 ACTUAL VALUE TO BE RE-ASSESSED AT A CLAIMED TRUE ASSESSED VALUE OF $1,650 FOR TAX PURPOSES. (ONE HAS TO WONDER IF THAT MEANS HE'D BE WILLING TO SELL IT AT THAT ASSESSED PRICE RIGHT NOW?)
D) HIS TAX WOULD THEN NO LONGER BE $5,000 PER YEAR, BUT $39 PER YEAR---GOOD MONEY IF YOU CAN GET IT TO WORK.
E) TO EVEN APPLY FOR A CHANGE FROM RESIDENTIAL TO AGRICULTURAL YOU MUST EARN AT LEAST $5,000 PER YEAR FROM THE AGRICULTURAL USE.
F) GO GET THE CHECKS AND DEPOSIT RECORDS TO CONFIRM IF HE MADE THE $5,000 INCOME FOR AN AGRICULTURAL PURPOSE FROM IT. AND DID HE DECLARE IT AS INCOME ON THE FEDERAL TAX FORMS.
G) GO GET A FEW PICTURES OF THIS 40 ACRES OF SAGEBRUSH.
H) GET THE LOCAL AGRICULTURAL EXTENSION AGENT TO GO SEE HOW MANY CATTLE ARE BEING OR EVEN CAN BE RAISED ON IT AT ANNUAL FAIR MARKET PRICES.
I) GET WITNESS STATEMENTS TO PROVE OR DISPROVE ALL AVAILABLE FACTS.
J) DETERMINE IF ALL SIMILARLY SITUATED 40 ACRE RESIDENTIAL PROPERTY IS TREATED THE SAME UPON AN AGRICULTURAL CLAIM BY THE ELKO ASSESSOR.

SECOND: LET THE TRUTH BE TOLD, WHATEVER IT IS. IF IT HELPS THE GOVERNOR, FINE; IF IT HELPS THE GOVERNOR RESIGN, FINE TOO.

THIRD: IF THE GOVERNOR AND WITNESSES WON'T VOLUNTARILY PROVIDE ALL THE FACTS SO A FAIR DECISION CAN BE MADE BY ALL NEVADANS ON WHETHER THIS WAS ALL LEGITIMATE OR A CRIMINAL FRAUD, THEN SERVE THEM WITH AN INVITATION TO A GRAND JURY WITH THE INVITATION ENTITLED "SUBPOENA."

FOURTH: CALL ELKO COUNTY DISTRICT ATTORNEY GARY D. WOODBURY AT 775-738-3101 AND FIND OUT IF A GRAND JURY IS BEING CONSIDERED.

FIFTH: CALL ATTORNEY GENERAL CATHERINE CORTEZ MASTO AT 775-684-1100 AND FIND OUT IF A GRAND JURY IS BEING CONSIDERED.

GO GET THE TRUTH! AND LET THE CHIPS FALL WHERE THEY MAY. AND IF ENOUGH OF THEM ARE FALLING ON HIS 40 ACRES, MAYBE ALL THE COWS HAVE COME HOME, AND MAYBE HE IS MAKING $5,000 FROM HIS CATTLE OPERATION; MAYBE NOT!

NOW IS THAT SO DIFFICULT.
By jfnance32

7/16/08 at 11:56 a.m.

Suggest removal

This is a fair article supported by sources.

I wondered where the copy of the cancel checks came from.

If the divorce war continues then Gibbons should decide if he wants to be governor or fight a divorce war with his soon to be ex-wife.

I think this tax exemption story is a lot about nothing. Gibbons as a private citizen has the right to apply for a tax exemption. He has the right to get legal counsel. There is no law that says that a tax commissioner can not be provide the services of legal counsel. He presented evidence to get the exemption. The tax assesor had the choice to decline or accept the evidence. He choose not to challenge the evidence.

There is no proof that the evidence is fraud. There is only speculation.

Now, the assesor is complaining that he should have challenged the evidence. According to the assesor own words, he did not do his job. He should consider to resign if he can not do his job.

Also, according to the assesor the tax exemption has to be applied for and approved each year. Perhaps, in this next tax year if Gibbons applies then the assesor will finally do his job.
By DavidMorgan

7/16/08 at 12:05 p.m.

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benighse: Too bad you're not running more of our local newsrooms. Unfortunately, just about any quasi-professional in this state could not afford to take a pay cut to assume such a strategic position. As in so many other areas of life and business...you get what you pay for. I guess we should be grateful that the AP's Sandra Cherub at least ran the headline for us, so that there may be forward progress on the story when our local newsrooms "get around to it."
By NeVMom

7/16/08 at 12:14 p.m.

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I find the comment that this story originated from either Dawn or her attorney a little hard to believe. I'm sure that with all the Governor is being seen doing in public (Leslie, Kathy and others) that his team wants to place whatever blame they can on Dawn or Cal.

benighse: In reference to your comments - Some were excellent ideas that need to be followed up. However, exactly when was Dawn seen hugging Drs. in Wingfield Park?

People DO care about what Jim is doing in public. I don't think giving someone a hug is the same as having their hand on each other butts, which is what Jim and Leslie have been seen doing several times, at different events.

Perhaps Jim is going to make this property a Retired Bunny Ranch for has been Playboy Bunnies. Does that qualify for the Agricultural discount?
By texexnv

7/16/08 at 1:35 p.m.

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benigh - what you have to do is file a complaint with the AG or they will do nothing at all.

Then they will give it a case number and supposedly investigate the matter. Until they get a complaint they are quite happy to snooze through the whole thingy.

Ostensibly that's how the system works but too few are willing to take the time to file an actual complaint.
By kramer

7/16/08 at 11:42 p.m.

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It is funny that jfnance32 will go after teachers and like for raises, which is what he perceives is a waste of taxpayers money. However, in this case he seems quite willing to allow the Governor to get a free pass and abuse the system and remove tax dollars from the county coffers and from the taxpayers pockets. You cannot have it both ways, either you advocate fiscal responsibility or not! Not just when it is convenient to support the party line!
By NVMojo

7/17/08 at 1:21 a.m.

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First of all, if an investigation of any sort has been started, they don't announce that to the whole world. Take a deep breath, people.

Second, I almost choked when I read the part about calling Elko DA Gary Woodbury.

He, like Jim Gibbons, was part of the Shovel Head, I mean Shovel Brigade up there. You gotta remember it. Fight the feds! Yeah!

Gary Woodbury is the guy who stated in a County Commission meeting that Elko businesses should refuse selling gasoline and food to US Forest Service employees. He is not going to stage a legitimate grand jury to look in to the Gibbons tax break. Mark my word.

Here's a link to the story about Woodbury urging a boycott against Forest Service employees and their families: http://www.hcn.org/servlets/hcn.Article?...

And here's good ole Jim fighting against the lowly bull trout in Elko County for the Shovel Heads, er Brigade: http://www.louisdb.org/documents/hearing...
By texexnv

7/17/08 at 7:55 a.m.

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NVMojo rocks! http://nevadamojo.blogspot.com/
By geezelouise

7/17/08 at 2:42 p.m.

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Gov Hotpants is too busy courting sweeties to pay much attention to what is going on in the state these days.

Just try emailing a question and see how long it takes to get an answer.
By benighse

7/18/08 at 4:53 p.m.

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CHECK OUT SOME RENO NEWS:

http://www.kolotv.com/home/headlines/256...

THEY'RE CONCERNED ABOUT THE GOVERNOR'S GIRLFRIENDS AND WHETHER HE'S "LONELY", BUT FORGOT TO ASK ABOUT HIS TAX FRAUD ON HIS "RETIREMENT PROPERTY" IN ELKO. GO FIGURE.

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