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Reid, Ensign made calls to banks for MGM
Monday, March 23, 2009 | 5:55 p.m.
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WASHINGTON -- Nevada’s two senators personally called the CEOs and other top representatives of financial institutions asking them to consider loans to MGM’s troubled CityCenter project -- the nation’s largest private building project that employs 10,000 workers in Las Vegas.
Both Democratic Sen. Harry Reid, the majority leader, and Republican Sen. John Ensign, the fourth ranking leader in his party, reached out as the company seeks $1 billion from wary credit markets to keep the project on track.
Banks have been reluctant to lend during the credit crisis, and some believe the casinos can be seen as risky investments.
The senators’ intervention raises ethical questions. Would a call from the majority leader or a top Republican senator be seen as undue pressure on a company? Can the senators continue their oversight in imposing tough regulations on firms they are asking for help?
Congress has unleashed $1 trillion to shore up the financial sector since the economy nosedived last year, and is now considering pivotal legislation to regulate the markets. The Senate this week will take up a bill to ban bonuses for insurance giant AIG, and reforms are being discussed to further cap executive pay and regulate the credit industry with more stringent oversight.
Reid’s spokesman said the senator “was asked for help, and he helped.”
“When your state is in the shape Nevada’s in, with a 10 percent unemployment rate, you expect your elected officials do to what they can to protect their jobs and strengthen the economy,” said Reid spokesman Jon Summers.
“Senator Reid called the banks and asked them to give this project a fair shake.”
Ensign said he sought counsel from the Senate’s Ethics Committee before engaging in the calls.
“Trust me, I was very sensitive,” Ensign told the Sun. “I ran it through Ethics committee first, just making sure everything I was doing was within the rules.”
Neither Reid nor Ensign ever asked for a loan directly, and Ensign said he never discussed any legislative action pending in Congress.
“This is jobs -- that’s what you’re calling about,” Ensign said.
Ensign said he reached out to CEOs and those with political connections to the financial houses and “just basically told them how important it was for jobs in Las Vegas, to give it every consideration – given how tough the economy was.”
Ensign said he stressed during the calls that he “understood they had to make the right business decisions, but at the same time how important the project was for jobs in Las Vegas.”
Reid has been making calls on behalf of MGM for the past few months. Ensign said he started calling the executives the week before last.
Nevada’s casinos have faced their lowest revenues in 20 years, and some believe MGM is on the verge of filing for bankruptcy protection.
Both senators believe they can continue making tough decisions in Congress, even as they seek assistance for a prime constituent.
Steve Ellis, vice president at Taxpayers for Common Sense said “what we don’t want to see are lawmakers exerting influence in undue areas ... It certainly deserves scrutiny and raises red flags.”
But Princeton University Professor Julian Zelizer, who writes extensively about Congress, said “this, in a nutshell, is the challenge with congressional pork barrel politics and earmarks.”
“Reid is still a senator so it's unrealistic to expect he would not fight for projects that benefit his state,” Zelizer continued. “I don't know if it's appropriate or not, that depends on your politics and perceptions of the process, but it is exactly what we should expect from how Congress works.”
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"Reid is still a senator so it's unrealistic to expect he would not fight for projects that benefit his state," Zelizer continued.
Yes, Reid is still a senator.
For now. For now. But not for long.
How can you be in charge of saving banks and telling them, " to give it a fair shake". The way to do it was stay out of the banks. ooops, you did, you let Barney Frank and Chris Dodd do it right.
If the Republicans were in charge they would get all the banks to loan the money to the MGM....just need to grease the elephants a55.
Opps, already did that and got gambling in every State in America....except Utah, damn mormons.
I'm an illegal immigrant and I would just like to say "Muchas Gracias" to Senor Reid for blocking the E-Verify provision on the Stimulus Package,
Me Work Soon,
ADIOS GRINGOS
Reid and ethics are like oil and water.
Isn't this how the banks got here in the first place... Pols strong arming them into making mortgage loans available to folks that could repay them? Have they no shame?
I usually don't agree with Reid, but finally he does something for Nevada rather than his slimy liberal cronies. Nothing wrong with helping the largest employer in your state remain solvent.
Reid has been involved in shenanigans since his days on the gaming board and they have never stopped....just became bolder.
Vote this schmuk out now!
MGM has bought and paid for Reid to be in their beck and call; they're Reid's biggest briber:
http://www.opensecrets.org/politicians/s...
But when it comes to helping Nevada's severely handicapped children, Reid is AWOL:
http://rgj.com/article/20090322/COL30/90...
this is an insane project it wont attract visitors, people like the idea of sin city not daft structures overpriced beyond the public, legalise brothels inside casinos and you will see a huge increase in visitors...
I don't like Reid either, but if you live in this town, one best hope that he and Ensign are able to assist in getting City Center completed and open, even if half (or more?) of the hotel floors are only shelled out at opening - who's going to care if 50% of the floors (that we can't see behind their mirrored glass anyhow...) are empty in the beginning?
In-the-end, City Center is going to be Las Vegas' Empire State Building, which even nearly a decade after opening, was 2/3's empty... As long as City Center can open on time and begin generating revenue in its casino, retail and amenities along with guests staying in the completed rooms along with utilizing completed hotel/condo units available - everybody benefits... If City Center opens and many of the completed (and paid for) rooms go unused, the financial mountain to climb gets taller and taller and more and more out-of-reach...
We need to get City Center opened and operating in a relative responsible manner, same goes for the neighboring Cosmopolitan property and Fontainebleau further down the Strip...
All-in-all, fast forward 5 years from now when construction starts on the shelled portions of these properties, these days of bitter bickering, finger-pointing and ridiculous complaints will be behind us and like all economic cycles, people will once again be at their worst, including all those in this string that are at their worst right now...
have MGM start selling property maybe back to steve WYNN. politician please stay out of casino business. maybe united state government can get into gambling busines IT TIME FOR TERM LIMIT
In light of what's going on in our stae and national economy, how could they NOT have made these calls? The banks freeze up and demand billions in taxpayer $$ and then still don't lend. Reid & Ensign should have made those calls. So should every senator in every state on behalf of businesses large and small. This is almost an absurd argument. It would have been different had they been advocating for something in which they personally would have benefitted. C'mon people, do you realize what's at stake here?
Why wouldn't our Senators weigh in on the largest economic project in Nevada. It will be giving folks here access to over 12,000 jobs when it is finished. Time will tell, but let's just hypothetically say that if CityCenter failed and they didn't do everything in their power to make it work we would be skewereing our elected officials for not doing enough to save it. Another case of "Damned if they do and damned if they don't."