Guinn testifies he never authorized Loux pay increase

By Cy Ryan (contact)

Published Thursday, March 12, 2009 | 11:15 a.m.

Updated Thursday, March 12, 2009 | 7:15 p.m.

CARSON CITY – Former Gov. Kenny Guinn says he never authorized Bob Loux to raise his own salary while he served as director of the state Office of Nuclear Projects.

Guinn told the state Ethics Commission that Loux did a good job and if he would have requested a pay raise, he would have been given one.

Guinn was a witness on the opening day of the hearing by the Ethics Commission as it looks into whether Loux improperly raised his own salary during his tenure as head of the nuclear agency.

The Legislature gave Guinn the authority to set the salaries of those in the governor’s office, the governor’s mansion and the nuclear projects office. The rules were that the salaries could not exceed that of the governor and did not go over the agency budget.

Eighteen witnesses were subpoenaed to testify at the two-day hearing, included eight former chiefs of staff for Guinn and Gov. Jim Gibbons.

Guinn, testifying by video conference from Las Vegas, said he didn’t remember signing any authorization to raise the salary of Loux but said “I would have had no problem” and “he deserved more money.” But he added, “Any pay raises would be presented to me” by his chief of staff.

The former governor said there was never any question about Loux's salary from his budget office or the legislative fiscal analyst division. And a federal audit of the nuclear office never raised the issue.

The only thing the federal audit talked about was the nuclear projects office spent money to buy buttons to oppose Yucca Mountain. The governor said the federal government didn’t like that because it was pushing the nuclear waste dump in Nye County.

Asked about salaries, Guinn replied, “I didn’t have time to look at salaries. I just knew mine was $117,000.”

Senate Minority Leader William Raggio, R-Reno, was the lead-off witness and told the commission the Legislature gave Guinn the authority to set the salaries in his office, at the governor’s mansion and in the nuclear projects office.

Raggio said the governor has the flexibility to determine the pay, as long as it does not exceed the budget approved by the Legislature.

Workers in those agencies are considered “non classified” as opposed to classified and unclassified workers in state government. The unclassified worker is usually in management and the Legislature set the salaries at the end of the session.

Guinn testified he needed the flexibility to set the salaries to keep his staff from leaving.

Loux maintains he had authority in the Guinn administration to raise his salary. He offered a settlement to repay the state more than $29,000 to close the case but the commission rejected the offer.

He also may owe $22,000 because the state paid his full premium in the retirement system, instead of him picking up half. The proposed settlement admitted only to an ethical violation in fiscal 2008 after Gov. Jim Gibbons took office.

Besides Raggio, Assembly Minority Leader Heidi Gansert, R-Reno, testified. She was the one who filed the complaint against Loux, who resigned after the overpayments were disclosed.

The commission rejected an initial motion by Tom Perkins, the attorney for Loux, who wanted to prohibit witnesses from giving their opinions on whether there was a violation of the law. He argued they were not competent to judge whether the law had been violated.

But Commission Chairman Mark Hutchinson denied the motions, although he said it would be up to the commission to decide if the law had been violated.

State figures showed Loux had an authorized salary last fiscal year of $110,851 and he earned $145,718. That was more than the $141,000 salary of the governor, which is against the law. This fiscal year he was earning $151,542 instead of the authorized salary of $115,285.

Loux also gave his small staff raises higher than what some state officials was approved.

Carson City District Attorney Neil Rombardo said Thursday the criminal investigation into the conduct of Loux is “still ongoing.”