Indictment caps lobbyist Harvey Whittemore’s dramatic fall from grace

By Anjeanette Damon, David McGrath Schwartz

Sunday, June 10, 2012 | 2 a.m.

Harvey Whittemore once bounded through Nevada’s Legislature as the embodiment of influence — a lobbyist for casinos and other powerful interests, a lawyer, a gregarious personality and sharp mind. He also was a lucrative campaign contributor for elected officials, which helped open doors.

Whittemore pushed boundaries — one time seeking legislation to allow a private pier to be built at Lake Tahoe for himself and his friends. Sometimes his overreach was literal.

In the 1990s, when the Legislature installed tall glass walls in the Assembly and Senate chambers to separate lawmakers from the public gallery, they became known as “Harvey’s Walls” since they stopped his habit of reaching into the chambers before votes on bills.

On Thursday, Whittemore, in a dark suit and shackles around his ankles, entered a Reno courtroom to offer his not-guilty plea on federal charges of campaign finance law violations and lying to investigators.

Whittemore’s back was ramrod straight, but he had fallen from his perch in Nevada politics — first by a civil lawsuit with explosive allegations that he had siphoned money from his business for personal use and to maintain his political standing. Now he’s under federal indictment on four felony charges that could land him in prison.

“In Harvey’s time, he was recognized as the preeminent lobbyist in Carson City,” said Richard Bryan, a former state senator and governor. “Harvey has a strong personality. He was big in terms of physical stature. When he comes into a room, he had the ability to fill it up. Harvey was that kind of a personality, a great personality.”

For those who knew him, Thursday’s court hearing was surreal. The room was filled with lawyers, his friends, family and reporters. Whittemore glanced only once behind him to offer a tight smile to the prosecutor staffing his arraignment.

But while he may have fallen — lobbyists and lawmakers declined to be quoted for this article — the relationships don’t disappear overnight.

Take for instance the federal magistrate who presided over Whittemore’s arraignment, William Cobb.

“First of all, I have to say that I’ve known Mr. Whittemore for close to 40 years,” Cobb said upon taking the bench. “We’ve had a close relationship.”

Despite Whittemore’s relationship with Cobb, neither the defense nor the prosecution sought to have the judge recuse himself.

“I feel a little ridiculous asking this question, but can you state your full name for the record?” Cobb continued.

At the height of his power, Frederick Harvey Whittemore, 59, was often referred to as the 64th legislator.

He helped Steve Wynn get a tax break on his art collection. He pushed through legislation freeing bars, restaurants and casinos — “dram shops” that served liquor — from liability if patrons got into an accident. He eased the way for oil companies, like Arco, to open gas stations in Nevada, and squelched repeated attempts to increase the tax on gambling.

One of his bills in 1995 would have retroactively overturned a Supreme Court judgment won by the victim of sexual assault against the Hilton in the infamous Tailhook scandal. While he failed to get that judgment overturned, he succeeded in protecting hotels from liability in future cases.

Fellow lobbyists would sometimes stare in awe at the brazen way he marched into bill drafting rooms to essentially write legislation lawmakers would later consider.

He had a reputation of pushing the line with legislation in his heyday, but he has not been a strong force in Carson City lobbying since 2003, when he had a falling out with gaming companies following the defeat of the gross receipts tax. Still, his entrance to the legislative building was always noted as an event, even after he stopped lobbying.

Since 2003, Whittemore focused on his planned Coyote Springs Development in Southern Nevada. Envisioned during Las Vegas boom years as a Palm Springs-type development, Coyote Springs would be a massive housing development — 43,000 acres, 159,000 homes — 50 miles outside Las Vegas, on the border of Clark and Lincoln counties.

And inevitably, he stayed involved in politics.

The indictment said he crossed the line when he went to help raise money for a federal official.

In February 2007, Whittemore met with an elected official from Nevada, only identified in the indictment as “Federal Elected Official 1,” in Las Vegas, according to the federal indictment. FEC records suggest Senate Majority Leader Harry Reid is the elected official.

Whittemore, the indictment said, “agreed to act as a fundraiser to collect a target amount of $150,000 in campaign contributions for Committee B.”

The indictment says that in March 2007, Whittemore solicited employees of his company and their spouses to make the maximum donations to federal candidates, about $4,600 for individuals or $9,200 for couples.

Whittemore is accused of then reimbursing the individuals through personal checks and wire transfers from his personal account, according to the indictment. Whittemore “attempted to conceal the reimbursements to various employees ... by verbally characterizing them as bonuses.”

Whittemore paid $5,000 to an individual who contributed $4,600 and $10,000 to a couple that contributed $9,200, the indictment said.

In total, Whittemore and his associates contributed about $138,000 to the campaign.

Although he is named nowhere in the indictment, campaign contribution reports indicate Reid received nearly $150,000 — a tally calculated by Sun columnist Jon Ralston — from Whittemore and his associates on a single day in March 2007.

In a statement, Reid’s spokeswoman said: “The Whittemore family gave money to local, state and federal officials over many years. At no time did Sen. Reid have any knowledge that Mr. Whittemore was engaging in these alleged unlawful contributions to Sen. Reid or any elected official. Sen. Reid believes that this is a very serious matter, and he has full confidence in the American justice system.”

Whittemore’s attorney, Dominic Gentile, said in a statement: “It is clear to us and it will be clear to a jury that Mr. Whittemore always acted in a law-abiding manner, well within his constitutional rights and with complete transparency. We respectfully, but strongly, disagree with the government’s interpretation of both the facts and law applicable to this case as well as the decision to indict Mr. Whittemore.”

Whittemore’s company was named Wingfield Nevada. In part, it was a nod to the ranch where Whittemore developed his first housing community in Northern Nevada, Wingfield Springs. That name was a nod to George Wingfield, one of the most powerful figures in Nevada in the early 20th century. Wingfield, a close associate of politicians and U.S. senators, saw his power crumble in 1932, when his 12 banks collapsed.

Whittemore’s case provides a similar parallel — the rise and fall of a storied Nevada power broker.

At a crucial time for Coyote Springs, the bottom fell out of the housing market. He succeeded in building a golf course, but other than water and sewer lines, not much else exists. The project is stalled, perhaps permanently.

Guy Rocha, a historian and former state archivist, said the indictment of Whittemore by a federal grand jury could have large implications for the rest of the state’s power brokers.

“The magnitude of this is absolutely immense,” he said.

Nevada’s political elite have generally been given wide latitude.

“The level of accountability, I’d argue, is generally pretty low in Nevada,” Rocha said. “We have a long tradition of not holding lobbyists accountable.

“If I were a lobbyist, I’d be paying careful attention to the outcome of this case.”