Lawmakers struggle to get straight answers from lobbyists

By David McGrath Schwartz

Friday, March 25, 2011 | 2:01 a.m.

Lobbyists testifying before the Legislature must tell the truth, under penalty of law. But there’s the truth, and then there’s a version of it.

This session, representatives of major industries have, while testifying before legislative committees, professed ignorance on facts that could have major policy implications.

• Gaming representatives said this week that the industry doesn’t know how much in unclaimed winnings it collects each year. An Assembly bill would take that money, currently counted as casino profits, and send it to the state.

• Pharmaceutical representatives said their industry doesn’t know how much cold medicine is diverted to the black market and used to make methamphetamine. A Senate bill seeks to make some cold remedies available only by prescription.

• Collection agencies said they don’t know how much it costs to send a letter to homeowners who are late in making homeowners association payments. A Senate bill would cap the amount a collection agency can charge someone at $75 per letter.

State law prohibits lying to a legislator, whether in committee or a coffee shop. (“It is unlawful to misrepresent any fact knowingly when testifying or otherwise communicating to a legislator.”)

But just in case, there’s a reminder about telling the truth posted near hearing tables at the Legislative Building.

No lobbyist, it appears, has lied outright or, in the genteel language of Nevada Revised Statute, misrepresented the facts.

But in those three recent instances, lobbyists told lawmakers that information asked for was unknown. Whether it was genuine ignorance, willful blindness or simple spin was, shall we say, unavailable as of press time.

Following the hearings, lawmakers expressed incredulity over the vague responses.

Gaming

A player gets up from a slot machine with a winning ticket. They cash out, but either don’t bother to redeem the ticket, lose it or wait too long and it expires.

What happens to that money? After 60 days, under existing law, the casino pays taxes on it as they do on all their winnings, and keeps the rest.

Assemblyman William Horne, D-Las Vegas, introduced a bill that would sweep those unclaimed winnings into the state’s general fund. How much money? he said.

Pete Ernaut, lobbyist for Nevada Resort Association, estimated it was $20 million to $35 million during a committee meeting Wednesday.

That’s not enough to make a difference in the state’s budget deficit, which is more than $2 billion.

After the meeting, Ernaut said the $20 million to $35 million figure came from the Gaming Control Board.

He said the Nevada Resort Association did not have its own estimate.

Gaming Control Board Chairman Mark Lipparelli said individual casinos would know that number. State regulators don’t ask casinos to break out information on unredeemed tickets.

“All of the revenue associated with unredeemed tickets is accounted for in monthly reporting,” he said. “The casino companies have great detail about their unredeemed tickets,” he said.

The board was auditing 76 establishments when Horne asked the Control Board to look into the matter. (There are 300 nonrestricted gaming licensees in Nevada, and 2,000 with restricted licenses.) Horne said the 76 casinos being audited reported about $11 million in unredeemed gambling winnings.

“I think if you extrapolate that out, and we have to be careful about that, we’re talking tens of millions of dollars,” he said.

Since he showed industry representatives the bill in February, he said, “I’m fairly certain they have a good idea of how much money this means for them.”

Pharmacy

Sen. Sheila Leslie, D-Reno, has introduced a bill that would make some cold medicines with ingredients that can be used to make methamphetamine available only by prescription.

A trade group for the over-the-counter pharmaceutical industry is fighting back, advocating that states proposing such legislation create an electronic network to track purchases. (The industry would pay all costs related to the technology, and work with law enforcement.)

But here’s the question posed by lawmakers: How much of the cold medicine that the industry sold is used for meth?

Put another way: How much money are the pharmaceutical companies making by selling products that become meth?

Law enforcement nationwide estimates the number is 50 percent to 80 percent, although how it arrives at the calculation is unclear.

The industry lobbyists in Carson City said they did not have an estimate of how much of their product is used for meth. They pointed to a legislative study from Kentucky, which estimated it was only 2.2 percent.

Kieckhefer said, “I don’t believe it’s 80 percent or 2 percent. How close the truth lies to either side will direct my vote.”

Kevin Kraushaar, a lobbyist for the Consumer Healthcare Products Association said Thursday that it’s difficult to estimate the amount. He said he was unaware of an industry figure. He also noted the oppositions’ lack of sourcing.

Leslie said she relied on conservative law enforcement estimates.

On whether drug companies have an estimate, she said, “of course they know. This affects their profits and losses.”

Collection agencies

How much does it cost to send a form letter to a homeowner going through foreclosure?

Sen. Ruben Kihuen, D-Las Vegas, thinks $75 is too much.

Sen. Allison Copening, D-Las Vegas, has sponsored a bill that would cap fees charged by collection agencies and homeowner associations at $1,800 per home, plus nine months of homeowner association dues.

The person who buys the home out of foreclosure pays those fees.

Opponents, headed by investors, say $1,800 is excessive and the bill has too many loopholes to be a real cap on those charges.

The bill, Senate Bill 243, details the amounts charged for different actions as a home goes through foreclosure, including $75 per letter for a number of notices sent to homeowners about the status of their property.

Figuring the cost to send a letter is not simple, Chris Yergensen of RMI Management, one of the largest management companies in the state, said Thursday. “You’ve got overhead, rent, insurance, technology costs. Throw all that in, it’s not as simple as pushing F9” on a computer to print out a letter.

Kihuen said he has constituent complaint to him that the fees pile up, and soon people owe $2,000. He called the $75 amount “outrageous.”

“I asked the question three times about how much it costs to send a letter,” he said after the meeting. “I’m still not completely happy with the way it was answered.”