Lottery Post Journal

Democrat Leader Harry Reid Caught in Possible Land Deal Scam

Every time a Republican gets caught doing something bad, all the hypocrites out there act like all Republicans are guilty and Democrats never do anything wrong.  The article below provides a good example of how such people are being just plain stupid when they act like that.  It's the same thing as people who blame George Bush for everything, and then say Bill Clinton and and Jimmy Carter aren't responsible for things they clearly are.

Just like Jimmy Carter's op-ed in the New York Times today, in which the moron outright lied to the public about North Korea and his own role in the failure of US policy under Bill Clinton.  Predictably, he blames George Bush for everything.  Just plain dopey.

AP Exclusive: Reid Got $1M in Land Sale
Oct 11 2:13 PM US/Eastern

By JOHN SOLOMON and KATHLEEN HENNESSEY
Associated Press Writers

WASHINGTON

Senate Democratic Leader Harry Reid collected a $1.1 million windfall on a Las Vegas land sale even though he hadn't personally owned the property for three years, property deeds show.

In the process, Reid did not disclose to Congress an earlier sale in which he transferred his land to a company created by a friend and took a financial stake in that company, according to records and interviews.

The Nevada Democrat's deal was engineered by Jay Brown, a longtime friend and former casino lawyer whose name surfaced in a major political bribery trial this summer and in other prior organized crime investigations. He's never been charged with wrongdoing _ except for a 1981 federal securities complaint that was settled out of court.

Land deeds obtained by The Associated Press during a review of Reid's business dealings show:

  • The deal began in 1998 when Reid bought undeveloped residential property on Las Vegas' booming outskirts for about $400,000. Reid bought one lot outright, and a second parcel jointly with Brown. One of the sellers was a developer who was benefiting from a government land swap that Reid supported. The seller never talked to Reid.
  • In 2001, Reid sold the land for the same price to a limited liability corporation created by Brown. The senator didn't disclose the sale on his annual public ethics report or tell Congress he had any stake in Brown's company. He continued to report to Congress that he personally owned the land.
  • After getting local officials to rezone the property for a shopping center, Brown's company sold the land in 2004 to other developers and Reid took $1.1 million of the proceeds, nearly tripling the senator's investment. Reid reported it to Congress as a personal land sale.

The complex dealings allowed Reid to transfer ownership, legal liability and some tax consequences to Brown's company without public knowledge, but still collect a seven-figure payoff nearly three years later.

Reid hung up the phone when questioned about the deal during an AP interview last week.

The senator's aides said no money changed hands in 2001 and that Reid instead got an ownership stake in Brown's company equal to the value of his land. Reid continued to pay taxes on the land and didn't disclose the deal because he considered it a "technical transfer," they said.

They also said they have no documents proving Reid's stake in the company because it was an informal understanding between friends.

The 1998 purchase "was a normal business transaction at market prices," Reid spokesman Jim Manley said. "There were several legal steps associated with the investment during those years that did not alter Senator Reid's actual ownership interest in the land."

Senate ethics rules require lawmakers to disclose on their annual ethics report all transactions involving investment properties — regardless of profit or loss — and to report any ownership stake in companies.

Kent Cooper, who oversaw government disclosure reports for federal candidates for two decades in the Federal Election Commission, said Reid's failure to report the 2001 sale and his ties to Brown's company violated Senate rules.

"This is very, very clear," Cooper said. "Whether you make a profit or a loss you've got to put that transaction down so the public, voters, can see exactly what kind of money is moving to or from a member of Congress."

"It is especially disconcerting when you have a member of the leadership, of either party, not putting in the effort to make sure this is a complete and accurate report," said Cooper. "That says something to other members. It says something to the Ethics Committee."

Other parts of the deal — such as the informal handling of property taxes — raise questions about possible gifts or income reportable to Congress and the IRS, ethics experts said.

Stanley Brand, former Democratic chief counsel of the House, said Reid should have disclosed the 2001 sale and that his omission fits a larger culture in Congress where lawmakers aren't following or enforcing their own rules.

"It's like everything else we've seen in last two years. If it is not enforced, people think it's not enforced and they get lax and sloppy," Brand said.

SALE HIDDEN FROM CONGRESS

Reid and his wife, Landra, personally signed the deeds selling their full interest in the property to Brown's company, Patrick Lane LLC, for the same $400,000 they paid in 1998, records show.

Despite the sale, Reid continued to report on his public ethics reports that he personally owned the land until it was sold again in His disclosure forms to Congress do not mention an interest in Patrick Lane or the company's role in the 2004 sale.

AP first learned of the transaction from a former Reid aide who expressed concern the deal hadn't been properly reported.

Reid isn't listed anywhere on Patrick Lane's corporate filings with Nevada, even though the land he sold accounted for three-quarters of the company's assets. Brown is listed as the company's manager. Reid's office said Nevada law didn't require Reid to be mentioned in the filings.

"We have been friends for over 35 years. We didn't need a written agreement between us," Brown said.

The informalities didn't stop there.

PROPERTY TAXES LOOSELY HANDLED

Brown sometimes paid a share of the local property taxes on the lot Reid owned outright between 1998 and 2001, while Reid sometimes paid more than his share of taxes on the second parcel they co-owned.

And the two men continued to pay the property taxes from their personal checking accounts even after the land was sold to Patrick Lane in 2001, records show.

Brown said Reid first approached him in 1997 about land purchases and the two men considered the two lots a single investment.

"During the years of ownership, there may have been occasions that he advanced the property taxes, or that I advanced the property taxes," Brown said. "The bottom line is that between ourselves we always settled up and each of us paid our respective percentages."

Ultimately, Reid paid about 74 percent of the property taxes, slightly less than his actual 75.1 ownership stake, according to canceled checks kept at the local assessor's office. One year, the property tax payments were delinquent and resulted in a small penalty, the records show.

Ethics experts said such informality raises questions about whether any of Brown's tax payments amounted to a benefit for Reid. "It might be a gift," Cooper said.

Brand said the IRS might view the handling of the land taxes as undisclosed income to Reid but it was unlikely to prompt an investigation. "If someone is paying a liability you owe, there may be some income imputed. But at that level, it's pretty small dollars," he said.

FEDERAL LAND SWAPS

Nevada land deeds show Reid and his wife first bought the property in January 1998 in a proposed subdivision created partly with federal lands transferred by the Interior Department to private developers.

Reid's two lots were never owned by the government, but the piece of land joining Reid's property to the street corner — a key to the shopping center deal — came from the government in 1994.

One of the sellers was Fred Lessman, a vice president of land acquisition at Perma-Bilt Homes.

Around the time of the 1998 sale, Lessman and his company were completing a complicated federal land transfer that also involved an Arizona-based developer named Del Webb Corp.

In the deal, Del Webb and Perma-Bilt purchased environmentally sensitive lands in the Lake Tahoe area, transferred them to the government and then got in exchange several pieces of valuable Las Vegas land.

Lessman was personally involved, writing a March 1997 letter to Interior lobbying for the deal. "This exchange has been through many trials and tribulations ... we do not need to create any more stumbling blocks," Lessman wrote.

For years, Reid also had been encouraging Interior to make land swaps on behalf of Del Webb, where one of his former aides worked.

In 1994, Reid wrote a letter with other Nevada lawmakers on behalf of Del Webb, and then met personally with a top federal land official in Nevada. That official claimed in media reports he felt pressured by the senator. Reid denied any pressure.

The next year, Reid collected $18,000 in political donations from Del Webb's political action committee and employees. Del Webb's efforts to get federal land dragged on.

In December 1996, Reid wrote a second letter on behalf of Del Webb, urging Interior to answer the company's concerns. The deal came together in summer and fall 1997, with Perma-Bilt joining in.

In January 1998 — just days before he bought his land — Reid applauded the Lake Tahoe land transfers, saying they would create the "gateway to paradise."

None of Reid's letters mentioned Perma-Bilt. Reid's office said the senator never met Lessman nor discussed the Lake Tahoe land transfer or his personal land purchase. A real estate attorney handled the 1998 sale at arms-length, aides said.

"This land investment was completely unrelated to federal land swaps that took place in the mid-1990's," Manley said.

Lessman said he never talked to Reid or asked for his help before the 1998 land sale, and only met the senator years later at a public event. "Any suggestion that the land sale between Senator Reid and myself is somehow tied in with the Perma-Bilt exchange is completely absurd," Lessman said.

THE REZONING

Clark County intended for the property Reid owned to be used solely for new housing, records show. Just days before Reid sold the parcels to Brown's company, Brown sought permission in May 2001 to rezone the properties so a shopping center could be built.

Career zoning officials objected, saying the request was "inconsistent" with Clark County's master development plan. The town board in Spring Valley, where Reid's property was located, also voted 4-1 to reject the rezoning.

Brown persisted. The Clark County zoning board followed by the Clark County Commission voted to overrule the recommendation and approve commercial zoning. Such votes were common at the time.

Before the approval in September 2001, Brown's consultant told commissioners that Reid was involved. "Mr. Brown's partner is Harry Reid, so I think we have people in this community who you can trust to go forward and put a quality project before you," the consultant testified.

With the rezoning granted, Patrick Lane pursued the shopping center deal. On Jan. 20, 2004, the company sold the property to developers for $1.6 million. Today, a multimillion dollar retail complex sits on the land.

On Jan. 21, 2004, Reid received more than $1.1 million of the sale proceeds. Reid disclosed the money the following year on his Senate ethics report as a personal sale of land, not mentioning Patrick Lane.

A BUSINESS PARTNER'S PAST

Brown has been a behind-the-scenes power broker in Nevada for years, donating to Democrats, Republicans and charities. He represented a major casino in legal cases and dabbled in Nevada's booming real estate market.

Brown befriended Reid four decades ago, even before Reid served as chairman of the Nevada gaming commission and decided cases involving Brown's clients.

Brown's name has surfaced in federal investigations involving organized crime, casinos and political bribery since the 1980s.

This past summer, federal prosecutors introduced testimony at the bribery trial of former Clark County Commission chairman Dario Herrara that Brown had taken money from a Las Vegas strip club owner to influence the commission. Herrara was convicted of taking kickbacks. Brown was never called as a witness.

Brown declined to discuss past cases where his name surfaced, including Herrara. "The federal government investigated this whole matter thoroughly, and there was never any implication of impropriety on my part," he said.

8 Comments:

  • Put on your waders .... it gets deeper. Just read this on Powerline. There are two embedded links which don't appear but permalink is at the bottom.

    "It does appear, though, that Reid clearly violated Senate ethics rules by failing to disclose the existence of the LLC and his partnership with Brown. He reported the income, but not the relationship. I suspect the reason for Reid's reticence is explained by the AP's description of his friend's history.

    Basically, Reid lent his name and perhaps his influence to a business deal, in return for which he was cut in to the tune of $700,000. That would create a considerable obligation on Reid's part toward his business partner--a partner he chose not to disclose, and whose name apparently keeps coming up in organized crime investigations. Is that corruption? You can decide for yourself.

    SCOTT adds: Ed Morrissey writes:

    The AP left out a big part of this story on Harry Reid. The "developer who was benefiting from a government land swap that Reid supported" is probably Harvey Whittemore, a Nevada lobbyist with financial ties to Reid's sons and his campaigns. I wrote about this last August on my blog and in a column for the New York Post. Reid intervened on a number of occasions for Whittemore so that he could get his hands on federal land for a massive development project. The only thing that we couldn't see was whether Reid personally gained from this transaction, because at the time, all we had was Whittemore's employment of Reid's kids and his campaign contributions.
    This new story closes the loop. Now we see that Reid personally profited from his interventions on Whittemore's behalf, at least indirectly, and that he took pains to cover it up. It's complicated, but it stinks. I've started breaking it down on this post. "

    http://powerlineblog.com/archives/015527.php

    By konane, at 10:09 PM

  • Adding to my previous post this is what the last sentence referred to. I'm not finding a pony at the bottom of this pile.

    "It's complicated, but it stinks. I've started breaking it down on this post. "

    "Harry Reid And The Culture Of Corruption

    .........."In fact, this isn't a new development for Harry Reid. Less than two months ago, I wrote about Reid's questionable involvement and compensation in a related real-estate deal outside of Las Vegas, and the post turned into a column for the New York Post. Harvey Whittemore, a lobbyist and real-estate investor, plied Reid with campaign contributions and employed Reid's family members -- and in exchange, Reid did a number of favors that allowed Whittemore to realize large profits at the expense of environmental regulations that Reid helped Whittemore bulldoze. I wrote at the time:



    The story of Coyote Springs sounds like a Horatio Alger story. The land Whittemore bought in 1998 from a defense contractor who intended on using it for target practice had a number of restrictions on its use. A quarter of it was subject to a federal power-line right of way. Another quarter had federal protection for the desert tortoise, an endangered species that also is Nevada's official state reptile. The land had a fragile series of streams and washes that required special permission on which to build without ruining the desert's ecosystem.
    None of these obstacles proved too difficult for Whittemore, at least not while he had his friend Harry Reid running interference in Congress. Interior refused to relocate the tortoises for over five years, until the Bureau of Land Management agreed to swap the land for another parcel abutting a federal preserve elsewhere. No one ever did an analysis to determine whether the deal was fair to either party, nor did the BLM go to Congress for approval on the changes to a project that Congress had explicitly legislated.

    In 2002, Reid worked on the power corridor. He inserted obscure provisions into a land management bill that relocated the power corridor, freeing Whittemore to build on the 10,500 acres that Congress had previously held -- which means that someone else now had to lose property value for Whittemore's benefit, and for no cost whatsoever. That bald move caused raised eyebrows at the BLM and the Senate's Energy and Natural Resources Committee, and Reid backed away -- for the moment. Less than two years later, Reid tried again to give Whittemore the land for a song ($160,000), but Congress balked again. He finally settled for freeing the land for development and allowing Whittemore to buy it at a fair market rate, and forcing the government to relocate the power corridor.

    In 2005, Reid and fellow Nevada Senator John Ensign conducted a series of interventions with the EPA to eliminate the final obstacle -- the environmental impact on the fragile ecosystem in Coyote Springs Valley. When the agency blocked Whittemore's efforts, Reid and Ensign held several meetings with EPA officials to pressure them into submission. Whittemore used another Reid son, Lief, to lobby his father's office for assistance. In the end, the pressure paid off, as the EPA backed down from its opposition after winning a few concessions on the development plan.

    What did Reid get in exchange for all of this support? According to the Times, Whittemore contributed $45,000 to Reid and his PACs since 2000. He also gave the DSCC $20,000 in 2000, when it pushed Reid as a leader for the party in the Senate. Reid's son Josh got $5,000 for his unsuccessful campaign for a city council seat; his other sone Rory got $5,000 for his successful effort to win a spot on the Clark County Board of Commissioners.

    This appears to be of a piece with the Whittemore connection. In fact, it seems as though Whittemore's project was part of the transactions the AP discovered. "One of the sellers was a developer who was benefiting from a government land swap that Reid supported" -- that's the same project as Coyote Springs. A major portion of that story had to do with Reid trying to grease the skids for the land swap so that Whittemore could get around the federal right-of-way.

    Hilariously, this appears just days after James Webb tried smearing George Allen with a pseudoscandal over stock options that Allen disclosed and never exercised, meaning that he never cleared a dime from the options. Now we have the Democratic caucus leader dodging disclosures and failing to disclose $800,000 in profits from a project on which he partnered with a lawyer suspected of connections to organized crime and a bribery scandal. And let's not forget Reid's connections to Jack Abramoff, whom Democrats tried mightily to use as a poster boy for Republican-only graft:


    The activities _ detailed in billing records and correspondence obtained by The Associated Press _ are far more extensive than previously disclosed. They occurred over three years as Reid collected nearly $68,000 in donations from Abramoff's firm, lobbying partners and clients. ...
    Abramoff's records show his lobbying partners billed for nearly two dozen phone contacts or meetings with Reid's office in 2001 alone.

    Most were to discuss Democratic legislation that would have applied the U.S. minimum wage to the Northern Mariana Islands, a U.S. territory and Abramoff client, but would have given the islands a temporary break on the wage rate, the billing records show.

    Reid also intervened on government matters at least five times in ways helpful to Abramoff's tribal clients, once opposing legislation on the Senate floor and four times sending letters pressing the Bush administration on tribal issues. Reid collected donations around the time of each action.

    Reid also had a former staffer go to work for Abramoff, who then held campaign fundraisers in Abramoff's offices.

    No wonder Reid hung up on the AP reporter when they asked him to comment on this story. Reid has demonstrated that he has few scruples when it comes to using his position and power for his personal enrichment and that of his family and "associates". If the Democrats continue to have Reid as the leader of their Senate caucus, voters should realize the kind of leadership he will provide if the Democrats win control of the Senate.

    UPDATE: This story provides an answer to a question I had regarding Reid's dealings with Whittemore. The earlier story showed that Whittemore benefited Reid's kids and his election campaigns, but Reid worked awfully hard for Whittemore's benefit for no direct personal payoff. This land-swap deal and the $700,000 profit shows that Reid had a direct financial interest for his earlier interventions on Whittemore's behalf.

    Posted by Captain Ed at October 11, 2006 06:41 PM "

    http://www.captainsquartersblog.com/mt/archives/008266.php

    By konane, at 10:27 PM

  • goodness. he's right there with bob corker from Tn.

    By emilyg, at 11:46 PM

  • In an election today, who do you think would be elected, Jimmy Carter or G.W. Bush? Can we put it up for a poll on the forum?

    By Rick G, at 12:35 AM

  • Konane: As usual, terrific stuff! Your posts are always so well thought-out and intelligent, a great resource for anyone seeking truth in politics. Thanks so much for posting.

    Rick: Please put political posts in your blog. A post on that loser Jimmy Carter would not be appropriate in the forums.

    By Todd, at 8:58 AM

  • Relying on well respected conservative sources which know how to present a timeline of verifiable facts, you're given an actual chain of events ............. rather than predigested regurgitated cuds coughed up for the lazy to ingest as fact.

    By konane, at 9:53 AM

  • Todd, I know...I was just kidding about the forum poll. We definitely don't want the forums clogged up with political stuff. I'm just glad you provide the blogs where we can air out our opinions, whatever they may be.

    By Rick G, at 2:06 PM

  • I thought you were just trying to give me another opportunity to say what I think about Jimmy Carter. ;-D

    By Todd, at 2:47 PM

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