Lt. Gov. Krolicki says he’s an indictment target

Staff and wire reports

Published Monday, Nov. 24, 2008 | 2:17 p.m.

Updated Monday, Nov. 24, 2008 | 4:19 p.m.

Nevada Lt. Gov. Brian Krolicki said Monday that he's been advised the attorney general's office intends to have him indicted for how he handled a multibillion dollar college savings program while serving as state treasurer.

Krolicki, a Republican who's considering a run against U.S. Senate Majority Leader Harry Reid, D-Nev., said he's "wholly innocent" and believes he's being targeted for political reasons by Democratic state Attorney General Catherine Cortez Masto.

Masto said she couldn't comment.

"We cannot comment on that one way or the other, Masto said. "Under the rules of law, we cannot comment."

Krolicki, 47, said he has faced a "witch hunt" over the past 20 months into his activities as state treasurer, which culminated Friday with word from Chief Deputy Attorney General Conrad Hafen that the attorney general was planning to ask the Clark County grand jury to indict him.

"This aggressive and reckless posture by the attorney general is either motivated at best by a deeply flawed and tragically and deliberately incomplete investigation on their part, or more likely by a process that is borne of partisan malice and a desire to personally and professionally harm me irreparably," Krolicki said in two-page statement.

In an hour-long press conference Monday afternoon, Krolicki proclaimed his innocence and intimated that he saw the hand of Reid behind the looming indictment.

"All Democratic partisan roads lead to Harry Reid," Krolicki said when asked if he thought there was a conversation between Masto and Reid. "Reid has a long reach across the country."

Jon Summers, Reid’s spokesman, said: “The inquiry into whether Mr. Krolicki violated the law has been underway for sometime, according to public reports. Sen. Reid has not been involved in any way in this inquiry. Efforts by Mr. Krolicki to suggest otherwise are false.”

He did not directly answer the question. Krolicki, flanked by two attorneys, called on Masto to open up the process, removing it from the hands of a Clark County grand jury and filing a criminal complaint, where a judge would decide whether the case should move forward.

Krolicki also released a letter to Masto from his lawyer, Kent Robison, which said Krolicki's "private and public professional lives will effectively be destroyed" by the attorney general's use of a secretive grand jury process.

"Your office's refusal to allow transparency in this matter is unconscionable," Robison wrote. "Condoning such conduct makes it obvious that you have placed partisan politics above fairness and justice."

Masto said under the general grand jury process any proceedings aren't public unless or until a jury hands up an indictment to a judge.

Krolicki said he believes Masto was basing the request for an indictment in part on a 2007 legislative audit that said budget controls were bypassed in the Nevada College Savings Program that he oversaw as treasurer.

Krolicki was first elected state treasurer in 1998 and was re-elected in 2002.

When the audit was released, Krolicki said auditors were "simply wrong" in contending that state laws were broken. He said money invested in the $3 billion program had been "balanced to the penny."

Kate Marshall, the Democrat who ran successfully for state treasurer when Krolicki was elected lieutenant governor in 2006, had pressed for the audit, expressing concern about how the program had been managed.

Marshall also said she had heard reports of program records being destroyed and said when she took over as treasurer it was difficult to find the information that legislative auditors needed to complete their report.

Legislative auditors said more than $6 million in state funds was used to pay for program expenses, in excess of amounts authorized by lawmakers. Also, auditors said the funds were handled outside the state's accounting system and the treasurer's office hadn't set up accounting or internal control procedures.

The $6 million included more than $3.4 million paid by program managers to a plan adviser. Another $1.5 million was paid for marketing and advertising and nearly $1 million for legal services by a Sacramento law firm, at a rate of about $429 an hour, auditors said.

During the Monday news conference, Krolicki and his attorneys said they didn't know specifically what the charges will be about. But they seemed resigned that an indictment is forthcoming.

"The old saying goes that a good prosecutor could indict a ham sandwich," Robison said.

Asked about his political future, Krolicki said, "I am innocent. When this is done, my viability will remain."