Accountant: Loux gave nearly 14 percent pay raise

By Cy Ryan

Friday, March 13, 2009 | 3:32 p.m.

CARSON CITY – A former accountant for the state Office of Nuclear Projects says Director Bob Loux authorized pay raises for himself and his staff when extra money was available.

Trudy Stanford, who worked for the office for 10 years but is now retired, told the state Ethics Commission that in one case an employee left the agency and there was $70,000 in unspent funds. Loux authorized a 13.98 percent pay raise for the seven employees in the office.

There were other times when Loux authorized 3 and 5 percent increases.

The commission has conducted two days of hearings and will reconvene later to hear more testimony. Commission Chairman Mark Hutchinson said it must determine if former Gov. Kenny Guinn approved these raises.

Under a law sought by Guinn, the employees in the governor’s office, at the mansion and in the Nuclear Projects Office were “non classified” and their pay could be increased by the governor if there was sufficient money and the pay didn’t exceed the pay of the governor.

Guinn testified Thursday that he did not give Loux authority to raise his own salary. And he didn’t remember giving a pay raise to Loux.

Stanford said that one of the first pay raises authorized by Loux was approved by Vickie Soberinsky, deputy chief of staff for Guinn in 2000.

She testified that the 2007 pay increase of 13.98 percent “wasn’t approved by the governor’s office.” But she said she thought the previous 2000 approval applied. She said she understood “from conversations with Loux that he had the authority from the governor and Vicki Soberinsky.”

She said staff took on extra duties when the position was left vacant and the money distributed in increased pay.

Asked why she retired, Stanford said she had developed diabetes and had been advised to lower her stress. She said she wanted to get away “from the back stabbing going on at the budget” in September 2008. That was when the discrepancies in pay were discovered.

If the Ethics Commission finds a willful violation on the part of Loux, he can be fined $5,000 and ordered to repay twice the extra money he received. A second violation carries a $10,000 fine and a third violation a $25,000 fine with orders to repay the state twice what it lost.

If the commission finds the violations were not willful, they can order Loux to repay the state double what he received.

Loux offered to settle the complaint by repaying the state more than $29,000. He is working with state Controller Kim Wallin to repay money, an estimated $22,000 owed in connection with his retirement premiums.

The commission, on a 3-2 vote, rejected the proposed settlement.

Under questioning from Loux’s attorney, Tom Perkins, Stanford said Loux never tried to hide the salary increases. She said that she took on extra duties when the $70,000-a-year employee left in 2007 and the salary was distributed to the staff.

Earlier Mark Stevens, a longtime fiscal analyst for the Assembly Ways and Means Committee, said he knew of no director who has the ability to raise his own salary.

State figures show Loux had an authorized salary last fiscal year of $110,851 and earned $145,718. That exceeds the $141,000 paid the governor, a violation of state law. This fiscal year he was earning $151,542 against an authorized salary of $115,282. He resigned after questions arose about him raising his own salary.

The commission will set another hearing to take testimony from state Budget Director Andrew Clinger who is expected to be a key witnesses on the issue of whether Loux had permission or not.