Auto body shop bill’s backer denies conflict

By David McGrath Schwartz

Tuesday, April 28, 2009 | 2 a.m.

When Assemblyman Mark Manendo, D-Las Vegas, returns to work at the Henderson body shop where he is the marketing director, a new competitor will be close by — that is, unless a bill he has requested is approved by the Legislature.

Assembly Bill 297 would prevent insurance companies from opening auto body shops.

Manendo has said he wants to prevent the expansion of Sterling Autobody, a repair business owned by Allstate Insurance Co. What Manendo hasn’t said — and claims he didn’t know as he has pushed for the bill’s passage — is that Sterling Autobody is close to finalizing a lease on a building less than half a mile from a store owned by his employer, the Collision Authority chain.

Manendo has said he has no conflict of interest in pushing the bill because he wouldn’t benefit any more from reduced competition in the auto body industry than any other body shop employee in the state.

“I don’t know if that’s entirely true,” said Kara Walker, a commercial real estate adviser for Grubb & Ellis Las Vegas, who has been assisting Sterling Autobody in obtaining a lease for its planned expansion.

The location Sterling is pursuing is at 941 Empire Mesa Way in Henderson, less than a half-mile from the Collision Authority shop at 700 N. Gibson Way.

“They could wave to each other from their back yards,” Walker said. “We are moments away from getting a lease done.”

Manendo’s bill would prevent the Sterling shop from opening.

John Haas, southwest regional counsel for Allstate, confirmed Sterling has been negotiating a lease at the location.

Walker said, “It wasn’t a secret that we were showing that property to (Sterling). It’s been discussed openly. Corporate executives have been out.” She thinks Manendo’s bill is “awfully coincidental.”

Manendo said that’s exactly what it was. He said he had “no idea they were looking in Henderson. I had heard they were looking in Las Vegas” and in Northern Nevada.

“That’s news to me,” he said when shown the location of the proposed Sterling Autobody shop on a map. “That’s absolute news to me.”

Julie Tousa, president of Nevada Center for Public Ethics, said the situation raises concerns. Manendo’s dual role as bill requester and employee of a body shop “gives the appearance that he’s promoting the bill to stop competitors.”

The Legislature has moved to take oversight of members’ potential conflicts of interest away from the independently appointed Nevada Commission on Ethics. Instead, legislative leaders argue, the Senate and Assembly should police themselves. Neither the Assembly nor Senate Ethics committees has met this session.

In defending his support for the bill, Manendo pointed out that other legislators have potential conflicts, from employees of the judicial system who vote on judicial matters to school teachers and firefighters.

If the concern is that Sterling would take away business from his employer, Manendo noted that Collision Authority has only a few cars a month that have Allstate coverage. “Even if this were true, it wouldn’t have much effect on business,” he said.

Haas, of Allstate, pointed out that Sterling doesn’t serve only Allstate customers. Sterling is a preferred provider for more than 30 insurance companies, he said.

Manendo said he brought the bill forward because auto body shops that are owned by insurance companies create a conflict. Allstate “punishes” customers who don’t take their cars to Sterling, he said.

Allstate denies the claim.

Allstate representatives pointed out that in 2008 only 10 percent of Allstate customers in Nevada had their cars repaired at Sterling, 30 percent used a preferred provider and 60 percent settled for a check or used another body shop.

“It’s obvious we’re telling insureds and claimants that they have the right to choose,” Haas said. “It’s clear they’re exercising that choice.”

Haas called Manendo’s bill “an effort to prevent competition in the auto repair industry by eliminating one possible competitor.”

The bill has passed the Assembly and next goes to the Senate.