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April 24, 2014

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Cortez Masto’s shining star dims after Krolicki decision

Setback comes in ruling dismissing Krolicki case

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Las Vegas Sun file

Catherine Cortez Masto suffered a political setback Monday.

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Lt. Gov. Brian Krolicki

Attorney General Catherine Cortez Masto has long been viewed as a rising star in the Nevada Democratic Party.

She won a landslide victory in 2006 with broad support, even in rural counties where Democrats have in recent years been clobbered.

Cortez Masto suffered a significant blow Monday, however, when District Judge Valerie Adair dismissed Cortez Masto’s high-profile prosecution of Republican Lt. Gov. Brian Krolicki. Cortez Masto had charged Krolicki over misallocation of office funds in a case that was always viewed as legally problematic.

With the dismissal, Cortez Masto has opened herself to charges of politicizing her office and prosecutorial misconduct, dealing her a career first — exposure to attack and the potential of facing a tough opponent after none had been forthcoming.

As one Democratic consultant put it, “It’s clearly not good for her. It’s a question of how bad it’s going to be.”

One member of the political establishment, who is backing Cortez Masto, said the failed prosecution “has damaged her significantly.” Speaking on the condition of anonymity, the source said, “Sadly, this potentially has a lasting and damning effect on perceptions about her competence.”

Ryan Erwin, Krolicki’s longtime political adviser, is using Adair’s ruling as signal flare to draw out GOP challengers. “Any credible Republican lawyer ought to be evaluating a run against her,” Erwin said. “It was defining for her.”

The names of several prominent Republican attorneys are already being bandied about as potential challengers, including former U.S. Attorney Greg Brower, former university Regent Bret Whipple, state Sen. Mark Amodei and Regent Michael Wixom.

(Brower declined to comment and Whipple declined to rule out a run, but said it’s unlikely. Amodei didn’t return a phone call and Wixom could not be reached early Monday evening.)

Nor is Cortez Masto completely solid with her Democratic base. Although a well-liked establishment player and lock to be nominated for reelection, some grass-roots liberals have grumbled that she has not been aggressive enough advancing causes in the manner of New York Attorney General Andrew Cuomo or Connecticut Attorney General Richard Blumenthal, both Democrats.

The Krolicki investigation arose from a 2007 legislative audit into the Nevada College Savings Program, which was overseen by then-Treasurer Krolicki and his former Chief of Staff Kathy Besser. The audit found that $6 million earned through the program was not deposited in the state treasury. Instead, the money was used for legal costs and to market the state’s college savings program.

Some of the advertisements prominently featured Krolicki.

The audit was a black mark on Krolicki’s career, but found no money missing. Because of that, even some of Krolicki’s harshest critics did not expect it to lead to criminal charges.

Assemblywoman Sheila Leslie, D-Reno, chairwoman of the audit committee when the College Savings Program was under review, said she “was surprised when formal charges were brought forward, given that audits are used to find problems and focus mostly on getting them fixed.”

“Clearly, Mr. Krolicki broke numerous laws, including the appropriations act, by ignoring the checks and balances of the state budget system,” she said. But, Leslie added, the judge’s dismissal of the case was “a reasonable decision, given the facts as I know them.”

Adair’s ruling found the indictment to be deficient in a number of areas, including specifics about the misallocations. The judge also said the indictment “fails to specify the duty that was allegedly violated.”

Krolicki said he is moving forward. He’s expected to run for reelection.

Cortez Masto declined to comment.

The attorney general’s office could appeal Adair’s decision to the Supreme Court or convene another grand jury; a spokeswoman said Cortez Masto is considering options.

Cortez Masto, who is married to a retired Secret Service agent, comes from Nevada royalty — her father was longtime Clark County Commissioner and friend of the Strip Manny Cortez.

Her Hispanic roots put her on the right side of the state’s demographic trends as Nevada’s Hispanic community, comprising 25 percent of the state’s populace, grows more politically active. Some analysts credit Hispanics with delivering a larger-than-expected Nevada victory for President Barack Obama last year.

Those around Cortez Masto, including power brokers such as Billy Vassiliadis and Sig Rogich, see her as a future governor and had guided her on a careful, risk-averse path as a 2006 candidate and as attorney general.

But the prosecution of Krolicki posed legal and political risks which appear to have backfired on Cortez Masto.

After she failed to prosecute Robert Loux, former director of the Agency for Nuclear Projects who gave himself and his five staff members pay raises above those authorized by the Legislature, the Republican outrage over the attempt to prosecute Krolicki only grew.

Cortez Masto’s husband, Paul, then planned to host a fundraiser for a potential Democratic challenger to Krolicki.

Suddenly, Cortez Masto, once viewed as a bipartisan conciliator, appeared to be hyperpartisan.

Besser gave voice Monday to some of the outrage over the dismissed indictments: “I think the attorney general, at the very least, owes me an apology,” Besser said. “Catherine Cortez Masto should be ashamed of herself and what she allowed her office to do.”

Even if Cortez Masto doesn’t appeal the ruling, this episode likely isn’t finished.

A source close to Krolicki said allegations of prosecutorial misconduct and calls for an investigation of Cortez Masto may be forthcoming.

Sun reporter Cara McCoy contributed to this story.

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