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August 1, 2014

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Jon Ralston:

Whittemore overreached, but so does indictment

During his Carson City heyday, Harvey Whittemore was the King of the Overreach.

Mostly on behalf of the gaming industry, superlobbyist Whittemore tried to get jury verdicts against casinos retroactively annulled, pushed for a special art tax break for Steve Wynn and even persuaded a Senate committee chairman to hear a special amendment to help Whittemore build a pier at Lake Tahoe.

Now, in a twist worthy of O. Henry, Whittemore has been indicted in what might eventually be seen as the Great Government Overreach. He is essentially charged with bundling $150,000 to Senate Majority Leader Harry Reid (this is legal) but then reimbursing those who contributed (this is not legal). I’m not saying Whittemore is not guilty — he may be. But the law is an anachronism of a bygone, pre-Citizens United campaign financing world, and the potential punishment of years in prison not only does not fit the crime, but is disproportionate to similar offenses that have occurred in this state.

Whittemore’s criminal indictment comes after a lengthy and still unresolved civil squabble between the lobbyist turned developer and his partners after the recession turned his dream of Coyote Springs into a financial sinkhole, sparking recriminations and lawsuits. And now comes the Department of Justice making a federal case out of Whittemore allegedly inducing employees and family members to pony up to funnel money to Reid.

A brief moral equivalency digression: This comes in the same week that the DOJ agreed to a plea deal with the maliciously prosecuted Doug Hampton, the man whose life was destroyed by Sen. John Ensign, who has been left alone, presumably while the Justice Department reads Federal Election Commission reports.

Like anyone who has been in Nevada in the political world, I know Harvey Whittemore. I have covered him since my first session in 1987. He is an almost impossible guy not to like, but he’s also a difficult guy to keep track of in Carson City because he is always working and always up to something.

I’ve been both an admirer of his work ethic and legislative brilliance and a critic of some of his methods — he still blames me for escalating the pier controversy by labeling it “Piergate” in the media (ain’t I clever?).

Despite his many, many friends, Whittemore surely has engendered jealousy and even enmity for his flamboyant style and mixture of skill and braggadocio — he probably gave a few too many public high-fives after winning votes.

But putting aside what is in the civil litigation — his partners essentially accuse him of looting the company to maintain his lifestyle — what Whittemore is charged with in the criminal case is similar to what developer Jim Rhodes and businessman Ray Norvell did. And neither did time.

Some history:

In 1998, Norvell, a DeLuca Liquor and Wine executive, pleaded guilty to what are known as conduit contributions — that is, others make them but it’s really your money — and paid penalties that totaled $110,000 for donations made to presidential candidate Bob Dole three years earlier. Later, in 2006, developer Jim Rhodes paid a $159,000 fine for conduit contributions to Dario Herrera, a candidate for Congress, four years earlier.

That is, they did exactly what Whittemore did and were forced to pay substantial penalties, not serve jail time. Granted, Whittemore is accused of funneling much more money than Rhodes ($27,000) or Norvell ($9,000), and, of course, the “Federal Elected Official 1” in the indictment arguably is the most powerful Nevadan in history.

That brings us to the elephant — in metaphorical (not party) terms — in the room: Reid. Like many lawmakers before him, Reid has helped Whittemore, including with some issues around the Coyote Springs development.

Some will speculate that the feds really have their eye on Reid, that they threw the proverbial book at Whittemore to try to get the majority leader, who would be guilty of a federal crime if he knew the donations were conduit contributions. “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,” the senator’s spokeswoman said last week.

It is hard to believe that even if Whittemore reimbursed his family and employees that he whispered to the senator, “Hey, Harry, I’ll get you the 150K, and it’s all from me.”

The Ruthless One is a lot of things, but he is no dummy. So I doubt that occurred.

Assuming it didn’t and assuming Whittemore won’t say it did — and that also assumes he forgives Reid and others for suddenly treating him like a leper — maybe the King of Overreach should be offered the same administrative penalties as Norvell and Rhodes. If he isn’t, this will be seen as the Great Government Overreach, and irony notwithstanding, as a punishment that does not fit the crime.

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  1. Yada, yada, yada. So, I guess it was wrong of the feds to "get" AL Capone on tax evasion when all else failed. Getting crooks, liars & cheats on whatever they can is fine with me and I consider lobbyists worthy of going after. Personally, I have no use for them and believe "paid" lobbyists ought to be barred from talking to legislators; the operative word here being "paid." You want to "lobby" your legislator, fine. Getting paid to do so, no way! BTW, try to get to see your "legislator" without having attended a fund raiser or having been a contributor. Good luck!

  2. You are right on with this one, Jon. Reid needs to be examined as closely as Whittemore. Playing dumb is not an option here for the senator with such great power.