Las Vegas Sun

September 2, 2014

Currently: 96° — Complete forecast | Log in | Create an account

Harry Reid raises ethics concerns over economic report

Board member, Senate candidate Byron Georgiou says politics at play

Image

Steve Marcus

U.S. Senate candidate Byron Georgiou during an interview in his office March 7, 2011.

Click to enlarge photo

Senate Majority Leader Harry Reid speaks to reporters on Capitol in Washington, Tuesday, May 3, 2011, following the Democrats' weekly policy luncheon.

Sun Coverage

Georgiou on "Face to Face"

Byron Georgiou Interview - Segment 2

Viewing video requires the latest version of Adobe's Flash Player

  • Byron Georgiou Interview - Segment 2
  • Byron Georgiou Interview - Segment 3
  • Byron Georgiou Interview - Segment 1

WASHINGTON - By the time Byron Georgiou came to Washington, D.C., he had already been a top adviser to a California governor, prosecuted Enron executives and established himself as a top donor to the Senate Democrats.

But it was Harry Reid’s appointment of Georgiou to the Financial Crisis Inquiry Commission -- tasked with producing the official record and recommendation on how the financial services industry brought down the economy -- that established him as a figure in national politics and gave him an impressive credential he has brandished in his bid to represent Nevada in the U.S. Senate.

But according a senior Democratic aide close to Reid, the Senate majority leader is now seriously rethinking his decision.

“Given Byron Georgiou’s financial history, and the ethical concerns raised regarding his tenure at the FCIC, Senator Reid regrets appointing him to the Commission,” the aide said.

That sort of recanting casts a cloud not only over Georgiou’s reputation, but the work of the FCIC, which released its final report in January.

Reid isn’t the first to raise concerns about whether all the work by the FCIC was ethical. California Republican Rep. Darrell Issa’s House Oversight and Government Reform committee this year began investigating whether Georgiou and FCIC lead investigator Chris Seefer had broken the commission’s ethical rules regarding conflicts of interest and confidentiality.

Georgiou and Seefer are both employees of the law firm Robbins, Geller, Rudman & Dowd, which is co-lead prosecutor in a case against Goldman Sachs. The firm is representing pension funds accusing the investment bank of misleading fund managers about losses from an investment tied to subprime mortgages.

While the firm was only named co-lead counsel in March, and Seefer and Georgiou were technically “on leave” during the term of their FCIC’s service, they apparently maintained ties with the firm.

Last September, Georgiou addressed a closed-door meeting of “public fund fiduciaries” hosted by Robbins Geller as “distinguished speaker” affiliated with the firm, appearing with FCIC Chairman Phil Angelides, who billed the talk with a promise to deliver a sneak-preview of the commission’s conclusions.

Angelides is one of three former FCIC commissioners listed as contributors to Georgiou’s campaign, the other two being former Commodity Futures Trading Commission chair Brooksley Born and former IBM vice president and Symantec CEO John W. Thompson, both appointees of House Democratic leader Nancy Pelosi.

Reid’s concern appears focused on Georgiou because he was one of Reid’s three appointees to the commission. (The other two were former Senator Bob Graham of Florida and former top Merrill Lynch exec and Nevada Cancer Institute co-founder Heather Murren -- though Reid did also have to approve Angelides, Pelosi’s third appointee, as chairman.)

A spokesman for Reid declined to comment for this story.

“While [Georgiou] was participating on the commission, he was speaking in public and giving private speeches that were in violation of the ethics code for the commission,” the aide close to Reid said. “Sadly, with some of the things now that we’ve come to know, I think his participation on the debt commission taints the entire scope of his work and his involvement. That’s not fun to say.”

But Georgiou has an alternate theory to explain why Reid might be reconsidering his appointment to the panel: Georgiou is running for Senate against Reid’s favored candidate, Rep. Shelley Berkley.

“When the Commission’s report was issued on January 27, 2011, it was widely praised as the definitive examination of the causes of the financial crisis that has devastated the lives of so many Americans, hitting Nevadans particularly hard,” Georgiou said in an email to the Sun. “Among those effusively praising the work of the Commission and its report when it was issued in January was Senate Majority Leader Harry Reid.

Therefore, Georgiou concludes, the criticisms must be “part of the continuing efforts of the Shelley Berkley campaign to disparage my candidacy.”

Georgiou is challenging Berkley for the Democratic nomination to Nevada’s Senate seat in 2012, which Republican John Ensign vacated in May, and which Republican Rep. Dean Heller was appointed to fill in the interim. Georgiou is widely considered to be an underdog.

But Georgiou’s Senate campaign isn’t the only thing that could be affected by Reid’s criticisms. Adding to Issa’s inquiry, it effectively makes the concerns about the panel’s findings bipartisan -- which could be problematic for the Obama administration, given that the commission spent 18 months and $8 million on the endeavor touted as the definitive take on the financial meltdown.

In total, the FCIC’s ethics guidelines suggest Georgiou could have up to nine potential points of violation, if the allegations that appear to have independently been brought to the attention of both Issa and Reid are substantiated through further inquiry. Those include possible violations of rules concerning gifts to commissioners, conflicts of interest and recusals (Georgiou took none), disclosure of information, and public speaking engagements and public statements made outside the commission process.

The Democratic aide said Georgiou did not make his affiliations with Robbins Geller known to Reid prior to his appointment, and neither was Reid privy to information about Georgiou’s financial history before making his nomination.

That calls into question why more vetting wasn’t done in the first place.

Georgiou moved to Las Vegas in 2005, having built several successful business enterprises in California, and established himself as a plaintiff’s lawyer to be reckoned with during the course of the Enron trials. It was after he moved to Las Vegas that he became acquainted with Reid.

Beginning in 2006, Georgiou also started making hefty donations to the Democratic Senatorial Campaign Commission, giving $10,000 that year, $28,500 per year between 2007 and 2009, and $30,400 last year, for a total of $125,900. Those latter figures are all at or within a few hundred dollars of the legal ceiling for annual donations to the DSCC. He also donated the maximum allowable contribution to Reid’s 2010 reelection campaign.

The aide close to Reid acknowledged that Georgiou was “a prominent giver and donor,” but said Georgiou’s financial contributions didn’t influence Reid’s decision: Georgiou simply appeared “qualified to serve on this commission.”

“There is not a vetting process like there would be for a nomination. There are a lot of acceptances taken into account of: I think I know this person,” the aide said. “You expect people to be honest, but you also expect people to have good judgment...he’s just not being forthright and honest, and that’s arrogant.”

Georgiou maintains that his work on the commission was beyond reproach, and that there is nothing to uncover.

“In the almost 5 months since the Commission's report was issued in January, or the Commission's existence ended on February 13, 2011, the promised investigation has yielded nothing,” Georgiou said of Issa’s investigation into his conduct on the FCIC, which appears focused on grounds similar to Reid’s concerns.

Join the Discussion:

Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.

Full comments policy

Previous Discussion: 9 comments so far…

Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.

Only trusted comments are displayed on this page. Untrusted comments have expired from this story.

  1. I don't know this guy from a hole in the wall but I do know Harry the Red and this is more of his smear tactics. He's a stalking horse for the anointed one, Berkley who, by all measures, is as crooked as Harry the Red. When Harry the Red pats you on the back, he's just looking for the best place to stick the knife!

  2. Byron Georgiou is a good man at the wrong place in time. He falls into the same category as Jack Carter did when the ex-president's son ran. Nice guy, won't win, why bother. And enough of these rich Greeks moving in, moving back from out of state. Is he some sort of Greek karmic retribution for the failed Republican Chachas candidacy? Oh, and by the way, how is the Chachas family doing now that they have moved back to Ely? Thought so.

  3. While Harry Reid is looking into things maybe he could take a look at this and see if anything is wrong here. Afterall isn't it only Republicans who are supposed to "be in bed" with Wall Street honcho's?

    http://www.politico.com/blogs/joshgerste...

  4. Big surprise that somehow Mr.Georgiou escaped the usual "vetting" process that everyone is subjected to.

    And then Senator Reid's camp stating that Mr.Georgiou should have been more forthcoming--gez, guys! you all are lawyers! really? To be nice, and be FAIR, upon even offering the opportunity to Mr. Georgiou, Senator Reid's people should have given the man the RULES in writing and gone over them verbally. Make sure he was agreeable to them and clear about them BEFORE taking the committee job.

    Makes one wonder. Political strategists likely already mapped Mr.Georgiou out and how to "play" him!

  5. As Searchlight Harry believes: ETHICS??????? What stinking ethics we don't need no stinking ethics!!!!!!

  6. Who realy cares what Dirty Harry thinks?

  7. No matter the motive of Senate Reid in coming out against Byron Georgiou the questions we need to ask and stay focus on are, did Byron Gerogiou break ethical codes, and is Bryon Gerogiou in a conflict of interest dealing with his law firm?

    For all you Harry Reid haters, don't lose sight of the real issue! Did Byron Gerogiou do anything wrong? That is the question! It does not matter who raised this issue! Was there a violation of code, rules, or law, from actions by Byron Gerogiou?

    That's all that matters, facts, not fiction! Stop adding allegations! Stay focus on the real issue. We can find out if Harry Reid has an agenda against Bryon Gerogiou. If these charges are true, then Senate Reid did his public service by informing us on the character of Bryon Gerogiou! Mr. Gerogiou wants to represent Nevada in US Senate. We don't need more people like former Senator Ensign falsely representing Nevada, do we! Wake up and stay focus!

    If this guy proves to be unethical and dishonest, we do not want another one of him in Washington, there are too many now!

  8. I don't know if Georgiou is on the up and up or not, but anything coming from Reid is suspect. He has a long, long record of playing politics first and ethics last. Looking to Reid for guidance on matters of ethics is like looking to Karzai for an unbiased opinion on the Afghanistan war.

    Georgiou sounds like a shady slippery guy but Reid is known to shade and slant the truth while claiming the moral high ground and pointing fingers at others. The truth, the whole truth and nothing but the truth is not something one gets from Reid.

    I'd have to look elsewhere for corroboration before I threw someone under the bus on Reids' say so alone.

  9. harry the look over there while i slip it in reid.