California Conservative

Earlier today, the AP reported a major scandal involving Harry Reid. To say that it’s bound to damage Harry Reid is understatement. It might even get him kicked out of the Senate. Here’s what the AP is reporting:

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.

That’s just the tip of the proverbial iceberg:

Kent Cooper, a former Federal Election Commission official who oversaw government disclosure reports for federal candidates for two decades, 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.

Earlier in the article, Reid is quoted as saying “Everything I did was transparent,” Reid said. “I paid all the taxes. Everything is fully disclosed to the ethics committee and everyone else.” Based on this paragraph, that isn’t the truth:

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.

The fact that Reid didn’t disclose this on the appropriate forms so that the Ethics Committee could provide proper oversight tells me that Reid didn’t want to tell people that he was a business partner of someone allegedly with organized crime connections. It’s apparent that he didn’t want to tell the authorities that he was a business partner with one of the biggest Washington lobbyists around.

“As I said, if there is some technical change that the ethics committee wants, I’ll be happy to do that.”

This isn’t just a technicality. This is Sen. Reid’s attempt to give himself political cover. It’s also a likely preview of his defense if the ethics committee brings charges on this despicable incident.

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.

This isn’t a little matter. Expect this issue to explode in the coming days. I suspect that a bungler like Harry Reid won’t help himself by defending himself in public. That’s exactly what will be expected of him, though. If that happens, it won’t be pretty. It’ll get ugly fast.

Technorati Tags: Election 2006, Scandal, Culture of Corruption, Harry Reid

Cross-posted at LetFreedomRingBlog

This entry was posted on Thursday, October 12th, 2006 at 3:10 am and is filed under Author: Gary Gross, Corruption, Elections, Investigations. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.