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April 18, 2014

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Politics:

Public policy maker or private lobbyist? 10 state officials play dual roles

A state legislator regularly gets paid to lobby a state agency whose budget he approves as a legislator.

A former Nevada Tax Commission member was paid to consult a casino company for sales tax issues before the Nevada Department of Taxation.

And a state legislator lobbied a state agency for a paid client on a bill he helped pass into law.

Such dual roles played by some of the state’s top elected and appointed officials are detailed in a series of annually filed reports recently obtained by the Sun.

All of this is legal under Nevada law so long as it’s disclosed, but it raises an ethical concern about whether elected or appointed individuals are using their public positions to enhance their personal — and profitable — enterprises.

Disclosure reports filed with the Nevada Commission on Ethics detail how legislators and members of state boards and commissions often get paid to do business before state agencies, boards and commissions. Their elected or appointed positions likely enable them to build relationships and gain expertise useful in their private enterprise — a fact recognized by lawmakers when they passed the disclosure law in 1991.

The 10 who reported

In 2012, these 10 part-time appointed or elected state officials represented or counseled clients for pay before various state agencies or boards:

• Peter Bernhard, Nevada Gaming commissioner, had business before the Division of Mortgage Lending, Department of Business and Industry, Clark County, city of Las Vegas, city of North Las Vegas, city of Henderson, Nevada Taxicab Authority, Division of Environmental Protection, Department of Conservation and Natural Resources, Nevada Athletic Commission.

• Skip Daly, Nevada assemblyman, had business before the attorney general, UNR, labor commissioner, Department of Transportation, Nevada OSHA, Department of Business and Industry.

• Traci A. DiFillippo, Chiropractic Physicians Board member, had business before the Board of Medical Examiners and Board of Pharmacy.

• Gregory Gale, ethics commissioner, had business before the Gaming Control Board and Gaming Commission.

• James Gibson Jr., Colorado River commissioner, had business before the Department of Business and Industry’s Division of Industrial Relations, Gaming Control Board, Department of Business and Industry’s Division of Financial Institutions, Board of Cosmetology, Governor’s Office of Economic Development, Board of Dental Examiners, Board of Architecture, Interior Design and Residential Design.

• Mark Hutchison, state senator, had business before the State Bar of Nevada and the Commission on Ethics.

• Gary W. Lein, Common Interest Communities and Hotel Condominiums commissioner, had business before the Department of Taxation and Gaming Control Board.

• John McKenna, Carson City supervisor, had business before the Department of Taxation.

• Richard “Tick” Segerblom, state senator, had business before the Department of Employment, Training and Rehabilitation’s Employment Security Division and Gaming Control Board.

• Keith Weaver, ethics commissioner, had business before the Board of Medical Examiners.

But the law tolerates this action because part-time state legislators and commissioners often have jobs that bring them into contact with state agencies and boards.

The key to making it work is transparency, argues Caren Jenkins, the ethics commission's executive director.

“Nobody can hide where they’re making a dollar or where their allegiances are,” Jenkins said. “That’s the hope: enhancement of the public trust.”

Sen. Tick Segerblom, D-Las Vegas, has represented more than 75 clients before the state Department of Employment, Training and Rehabilitation for unemployment hearings between 2009 and 2012, according to disclosure reports Segerblom filed with the ethics commission.

Segerblom’s day job is at the law office of Richard Segerblom, a downtown law firm where he practices employment law.

His website says he handles about 100 cases a year, so his business before the state is a large part of his firm’s work.

“I don’t see it as a conflict,” he said in an email to the Sun. “I’m not dealing with agency directors. I’m dealing with low-level hearing officers for the most part. In any event, if you are going to have a citizen legislature, then I don’t see how you can tell one profession — lawyers — that they have to give up their citizen job.

“I definitely don’t think I get favorable treatment because of my legislative position.”

Segerblom began practicing employment law prior to being elected to the Legislature in 2006.

Sen. Mark Hutchison, R-Las Vegas, is a lawyer and former ethics commissioner who “represented one or more clients before the Nevada Commission on Ethics,” according to disclosure statements.

Ethics commission reports also show that Assemblyman Skip Daly, D-Reno, has appeared before various state agencies because he’s the business manager for Laborers International Local 169, a building trades union that often has business before the state.

He said he doesn’t view his work as a conflict of interest because he’s been with the union for more than two decades, including time before he was a state legislator. Reporting what he does should be sufficient, he said.

“This type of reporting is a safeguard that gives a degree of transparency and disclosure that is fair but not too onerous,” he said.

Legislators aren’t the only ones appearing before agencies and commissions.

A member of the state Public State Charter School Authority counseled a private education company before the state’s education department.

A gaming commissioner represented Frias Transportation Management, a taxicab company, before the Taxicab Authority.

Ethics commissioners, too, have clients they’ve represented before the Gaming Control Board and the Nevada Board of Medical Examiners.

But the law may have a sizable shortcoming.

Part-time legislators and commissioners are supposed to annually report instances in which they’ve represented or counseled people or companies that have matters before state agencies or commissions.

Last year, 10 elected officials or appointed commissioners filed such reports with the ethics commission.

If officials don’t disclose, they’re in violation of the law.

But that doesn’t necessarily mean much.

“The one thing that is missing from the statute is some sort of enforcement provision because the only people who know if you represent those people is you,” Jenkins said. “I mean, how do we know? How does the ethics commission know that we’ve received all the disclosures we should have received? We don’t. All we do is hope and pray.”

For instance, a commissioner who counsels a client who has business before a state agency can do so via email, telephone or in a private office without anyone beside the client and commissioner knowing.

It’s the commissioner’s responsibility to report this incident, not the client’s.

“I wouldn’t doubt that we’re missing an enormous number of filings that should’ve otherwise been filed, but I can’t tell you where they would be or how I would find out about them,” Jenkins said.

Sometimes, you find them at regulatory hearings.

The Sun recently reported that Assembly Majority Leader William Horne, D-Las Vegas, testified as a lawyer with a client at a public hearing on regulations for Nevada’s new medical marijuana dispensary law, which was established at the Legislature this year in a bill that Horne voted for.

“I know you’re fishing for an ethics thing, but there isn’t one there,” Horne said at the time. “I fully disclosed that I am an assemblyman, but I am working on behalf of a client as an attorney.”

As long as Horne discloses his client in an annual report to the Nevada Commission on Ethics, he’s in compliance with the law. That report isn’t due until Jan. 15, 2014.

But even those disclosures can be flawed.

Hutchison’s form, which disclosed representation of “one or more clients” before the ethics commission, does not identify the client as required by state law.

Jenkins said the commission has no legal authority to say whether a filing is incomplete or inaccurate.

“What true transparency is there? I would venture to say there’s little,” she said. “I don’t want to disparage the legislators who created this system because I think their hearts were in the right place, but the system put into place to accomplish their intent is imperfect.”

Legislators crafted this law in 1991 with an eye toward legislators like Horne and Segerblom.

Thomas “Spike” Wilson, a former state senator who was chairman of the ethics commission in 1991, told a legislative committee at the time that he didn’t want to impose a “hardship” on legislators.

"(But) we’re talking about that area of abuse where, I almost hate to use the term again, but where one is perceived ‘practicing juice’ before some agency,” he said in legislative testimony. “I think the public views it as a problem. I think it is a spectacle when you see it and I think it is a spectacle to which everyone is not always sensitive. How you mitigate that, I don’t know.”

The Legislature decided in 1991 that disclosure would diffuse any question of ethics when it comes to these potential conflicts of interests.

Wilson wanted to account for people like Segerblom in the Legislature, ensuring that their elected position wouldn’t compromise their private career.

“The last person I’d like to drive out of the Legislature, frankly, is the sole practitioner who is dependent upon a substantial government practice because of where he lives or the nature of the work he does,” Wilson said.

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