Gibbons, AG clash over costs to defend nuclear chief

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

File photo, Nevada Appeal

Gov. Jim Gibbons

Catherine Cortez Masto

Incoming agency chief has sleeves rolled up (1-2-2009)
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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 cy@lasvegassun.com.

Discussion: 11 comments so far…

By Future2012

1/13/09 at 1:47 p.m.

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Unbelievable

On 12-29-2008 the LV Sun had a "Hero" piece on DEMOCRAT Attorney General Catherine Cortez Masto on how she intends to raise the ethical standard. She is a straight arrow..."

Cortez Masto sent a letter to Assembly Minority Leader Heidi Gansert, saying she had recused her office from the Bob Loux investigation.

"Over the last twenty years Mr. Loux has had an ongoing working relationship with my office in...," she wrote. "To avoid a conflict of interest and any appearance of impropriety if my office were to undertake the criminal investigation, it is in the best interest of the State that the matter be referred" to a local County Sheriff's Office. This mean the crime is being buried, and this is raising the ethical standard.

So if you are a "BFF of Masto and Reid" you will not be indicted.

Now Mastro wants to pay Loux's legal cost.

Loux no doubt will allowed to plead this out and pay a fine with state money. Any bets?

On 12-24-2008 the LV Sun had a "Hero" piece on DEMOCRAT Chief Deputy Attorney General Conrad Hafen who oversees the Public Integrity Unit and is the Lead Prosecutor against Brian Krolicki.

This furthers the AG's effort to put the trial in the public long before the court room trial in 2010.

When asked to compare the Krolicki and Gilbert cases rank? Hafen admitted that money was not the issue for Krolicki. Hafen also said that "Unfortunately, as with everything else, you have individuals who choose to violate laws." The AG Office is holding a Public Trial without a jury.

I don't want to discuss the Krolicki case. In terms of money, the Gilbert case ranks as one of the bigger cases we've done. Thousands of dollars were involved.

The AG Office has also compromised grand jury secrecy.

Every leading Democrat in the State that testify in grand jury secrecy has opened up to the newspaper or the office of the Democratic AG gave out the information.

Double Standard
By worstnightmere

1/13/09 at 2:13 p.m.

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Wait a minute.... How about the Attorneys Fee's, Gibbons acquired while defending himself against the FBI Sandal for accepting kickbacks,which amounted to hundreds of thousands of dollars, Gibbons made the tax payers of Nevada pay for these attorney fee's? In the end Gibbon's is a corrupt politician who is mad because he cannot control the Attorney General....
By ksand99

1/13/09 at 3:01 p.m.

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Well, I guess in Future2012's system of justice, Bob Loux has already been tried and convicted.

I think you should incarcerate Loux, Future. He has clearly broken your laws.
By jfnance32

1/13/09 at 3:04 p.m.

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This is a sad day.

The Democrats have an AG but the rest of the state will have to wait until the next election.
By Future2012

1/13/09 at 5:39 p.m.

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Bob Loux confessd.

Bob Loux confessd.

Mastro want to give Bob Loux money to defend himself for his confessed taking money from the State

Gibbon did not get money from the State of Nevada for the Federal Gov case and he was clear
By DennisMyers

1/13/09 at 5:42 p.m.

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Regarding Future's posting, criminal justice in Nevada is highly decentralized. It is normally handled at the county level. The attorney general's job is principally offering legal advice to state agencies. One of the few exceptions is investigations of state employees. In this case, the AG's office had a decades-long working relationship with Loux and arranged for the county to handle the investigation and for an independent counsel to represent Loux. How could you possibly interpret that as "the crime is being buried"? If anything, Loux will now face a more rigorous investigation by more experienced investigators.

As for the Worstnightmare posting, Gibbons' legal bills in the federal investigation were NOT paid by taxpayers.
By jfnance32

1/13/09 at 5:52 p.m.

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"In this case, the AG's office had a decades-long working relationship with Loux and arranged for the county to handle the investigation and for an independent counsel to represent Loux"

Hmmmm...that is strange.

How does she know this: ""There is no indication he acted in bad faith," said Masto".

Did she investigate Loux? Did she break her conflict of interest rule?

The AG has a decades long working relationship with the Treasury office, too.

Darn it.....she must have forgotten about that and accidently investigated the person who the AG has a conflict of interest with.
By Future2012

1/13/09 at 5:54 p.m.

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I will give you that maybe Mastro is incapable of a rigorous investigation.

The lack of experience shows with the weak case against Brian Krolicki.
By jfnance32

1/13/09 at 6:27 p.m.

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Loux (Democrats and life long friend of Reid): "I gave myself a 30% raise. The mouse under the door said that it was legal."

Masto (Democrat): "That is OK. No biggee. Wink wink...we are pals so there is this 'conflict of friendship'....oopssee...I mean 'conflict of interest'. It is obvious that you had good faith to give yourself a 30% raise......so obvious....What? You have been hiding the raise...good faith...bad faith...who really knows"

Krolicki (Republican and just announced to run against Reid): "I ran one of the most successful student college savings programs in USA."

Masto (Democrat): "OH MY GOD!!!!!!! I do not care if no money is missing and that you did enrich yourself like Loux. You violate rule number 2302.309203.2003. Even though almost all departments violate that rule for decades, we do not care. We are going put you away for life. Bad faith...good faith.....who cares...you are going down."

We do not have an AG. The Democrats do. But we do not.
By DennisMyers

1/27/09 at 9:07 p.m.

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Regarding Jfnanc's posting that Loux is a Democrat and a "life long friend of Reid", nothing could be further from the truth. For many years Reid was unhappy with Loux's handling of his job and in March 2000 the breach between them became so serious that Reid tried to get Governor Guinn to fire Loux. Guinn stood by Loux. All of this is public record. Why do so many readers who comment on these sites go straight to the most sinister interpretation of events instead of doing a little research? These newspaper dialogues could serve a useful purpose if we were interested in something more than just finding people to blame.
By johnevegas

1/27/09 at 9:16 p.m.

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"These newspaper dialogues could serve a useful purpose if we were interested in something more than just finding people to blame."

Here here!