Gibbons, AG clash over costs to defend nuclear chief

By Cy Ryan

Tuesday, Jan. 13, 2009 | 12:25 p.m.

CARSON CITY – Gov. Jim Gibbons says the attorney general’s office should be criminally prosecuting former nuclear projects director Bob Loux, rather than defending him before the state Ethics Commission.

Attorney General Catherine Cortez Masto told the governor her office was obligated to defend Loux if his actions were in “good faith” when he raised his own salary above the amount set in the law.

The two clashed at a meeting of the state Board of Examiners Tuesday over a $20,000 contract for Masto to hire an outside lawyer to defend Loux before the ethics commission that meets March 12 to consider the case.

Gibbons said, “We don’t have an obligation to defend him when he violates the law. I believe we should be prosecuting him and not defending him.”

Masto told Gibbons that the Washoe County Sheriff’s Office is investigating whether Loux violated the law. And the Carson City District Attorney’s Office has agreed to handle a criminal prosecution if there is one.

Masto said she determined in September that Loux was acting within the scope of his employment and was acting in “good faith.” In these circumstances, she is obligated to represent him at the ethics commission.

She said she hired outside attorney Karen Winters to represent Loux before the ethics commission. In that way, she would avoid a conflict of interest dilemma and be free to defend the governor and the state if Loux brings suit challenging the way he departed the state.

Gibbons challenged Masto’s finding that Loux was acting in “good faith.” Research by the governor’s office said Loux was being paid $151,342 this fiscal year when the authorized salary was $114,088

But Masto said Gibbons’ budget director Andrew Clinger knew Loux was giving himself and his employees higher than authorized salaries and approved them. But Clinger said after the meeting, he did not know about the higher than authorized salaries.

Clinger said Loux used federal grant funds to raise the pay of him and his staff. It was only when general fund money was used, was it discovered.

Masto said if Loux is found to have violated ethics or is found guilty of a lawful violation, than the state will seek to recover the money it spent in defending him.

“There is no indication he acted in bad faith,” said Masto. “That will be presented to the Ethics Commission.”

The governor said that his deputy chief of staff Mendy Elliott was under investigation while she was director of the state Department of Business and Industry and the attorney general declined to represent her.

But Masto said the investigation was conducted by her office. Elliott was cleared of any violation.

Gibbons produced a letter from Loux to Clinger dated June 19, 2008 in which he said, “It is simply not possible to further reduce the agency’s budget for the biennium.”

Masto distributed a statement dated Sept. 12, 2008, in which Loux told the attorney general’s office that the salaries in his office are not set by the Legislature but by the governor.

Loux said “Governor Guinn’s administration delegated that authority to me with respect to the employees in the Agency for Nuclear Projects.” He said Gibbons’ office never changed that procedure “nor was I provided with any rules and policies that indicated I was to proceed differently.”

Loux told the attorney general’s office he never attempted to hide the fact that he raised the salaries. “All the paperwork was submitted to the Department of Personnel and approved,” he said.

Loux also hired his own attorney when conservative spokesman Chuck Muth filed a suit seeking to remove him from office. A district judge dismissed the suit.

After a heated debate, Secretary of State Ross Miller, the third member of the state board of examiners, moved action on the contract be delayed until the next board meeting in February. And the three members agreed.

Cy Ryan may be reached at (775) 687 5032 or [email protected].