Expense Reports Tell You Nothing. Are Worthless

by Johnny Gunn

(Ed. Note: This is part two of a continuing series looking at Contributions and Expenses Reports that are required of all political candidates in Nevada. In our last issue we covered contributions (Click Here), and in this issue we will look at expense reports and how politicians basically don't have to tell us a thing.)

Contributions and Expenses (C&E) reports must be filed with Nevada's Secretary of State three times during an election cycle, and these reports are public record, meaning you have the ability to see them. Secretary of State Dean Heller, on his web site www.sos.biz maintains these records that are easily downloaded. In this last election cycle that ended with the November elections, reports were due on August 27, 2002, October 29, 2002, and January 15, 2003.

In the event a political figure fails to file the reports, the Secretary of State may file a lawsuit through the Attorney General's office. In an ongoing dispute over the legality of contribution and expense reports, southern Nevada politician Joshua Hansen has several charges filed against him by Heller. In one case, Heller has dropped a lawsuit.

Hansen is a candidate for Clark County Commission, running on the Independent American Party ticket, and says he has refused to file the C&E reports. He has refused from day one, and says now, "I refuse to compromise my principles."

Heller filed suit, which carries a maximum penalty of a $10,000 fine, for Hansen's failure to file reports in 2000. He says because of correspondence back and forth between his office, the AG's office, and Hansen, there is a possibility of mistaken interpretation, and he has dropped the suit. A suit dating from the 2002 election cycle is till pending. Hansen ran for Assembly from Clark County in 2002.

Besides the dropped suit and the pending suit, Hansen has filed a countersuit against Heller. No court dates are available on either of those.

As in contributions reports, very little substantiating evidence is required. Only the signature of the candidate attesting to its accuracy is needed. The statement, "I declare under penalty of perjury that the foregoing is true and correct," all that is required. For instance, during the 2002 election cycle, when Brian Sandoval was running for the office of Attorney General, he listed expenses to Kent Oram for consulting services in the amount of $60,000 and expenses for advertising to Oram, Ingram, and Zurawski, Inc. in the amount of $715,436.20. There are no invoices attached, no explanation other than "Consulting," and "Advertising."

Either one of those categories can be awfully broad and could take in many possibilities. The report filed by General Sandoval is correct in every respect, there is not one single thing wrong with it except for this: it leaves the impression that something could be hidden. As the Observer staff has found so many times going through these reports, there are many issues that are distasteful, but legal.

Here is a breakout of what Sandoval's report looks like:

Sandoval C&E 2002 notes on expenditures

Payments to Kent Oram

$6,000 7 Jan 2002 Consulting Report Period #1 p. 128 of 167

$6,000 5 Feb 2002 Consulting Report Period #1 p. 128 of 167

$6,000 3 Mar 2002 Consulting Report Period #1 p. 128 of 167

$6,000 30 Mar 2002 Consulting Report Period #1 p. 128 of 167

$6,000 30 Apr 2002 Consulting Report Period #1 p. 128 of 167

$6,000 13 Jun 2002 Consulting Report Period #1 p. 129 of 167

$6,000 28 Jun 2002 Consulting Report Period #1 p. 129 of 167

$6,000 29 Jul 2002 Consulting Report Period #1 p. 129 of 167

$6,000 30 Aug 2002 Consulting Report Period #2 p. 50 of 61

$6,000 30 Sept 2002 Consulting Report Period #2 p. 50 of 61

______

$60,000

Payments to Oram, Ingram & Zurawski, Inc.

$114,875 3 Sept 2002 Advertising Report Period #2 p. 50 of 61

$50,000 9 Sept 2002 Advertising Report Period #2 p. 51 of 61

$50,000 13 Sept 2002 Advertising Report Period #2 p. 51 of 61

$5,000 27 Sept 2002 Advertising Report Period #2 p. 51 of 61

$70,000 30 Sept 2002 Advertising Report Period #2 p. 51 of 61

$87,250 7 Oct 2002 Advertising Report Period #2 p. 51 of 61

$12,750 8 Oct 2002 Advertising Report Period #2 p. 51 of 61

$120,150 15 Oct2002 Advertising Report Period #2 p. 51 of 61

$12,970 16 Oct 2002 Advertising Report Period #2 p. 51 of 61

$120,870 22 Oct 2002 Advertising Report Period #2 p. 51 of 61

$35,000 24 Oct 2002 Advertising Report Period #2 p. 51 of 61

$36,571.20 29 Oct 2002 Advertising Report Period #3 p. 24 of 32

__________

$715,436.20

$6,000 15 Nov 2002 Consulting Report Period #3 p. 24 of 32

$6,000 31 Dec 2002 Consulting Report Period #3 p. 24 of 32

___________

$12,900

Total payments to Kent Oram's firms (by manual addition) = $788,336.20

This is over 3/4 of a million dollars for "consulting" and "advertising," out of what appears to be a total of $1,360,153 raised by Sandoval. Why aren't there invoices attached? Because the law doesn't call for them. Don't ask, Don't tell.

Throughout this period Sandoval was also paying substantial advertising fees to Paladin Advertising

$9,500 28 Jun 2002 Advertising Report Period #1 p. 129 of 167

$9,500 29 Jul 2002 Advertising Report Period #1 p. 130 of 167

$9,500 30 Aug 2002 Advertising Report Period #2 p. 52 of 61

$9,500 30 Sept 2002 Advertising Report Period #2 p. 52 of 61

$14,625 1 Nov 2002 Advertising Report Period #3 p. 24 of 32

___________

$52,625

Will the legislature take up the issue of correcting or at least discussing fully, the problems with campaign finance rules and laws in Nevada? Will the general public demand that? By way of reaction to our articles in the last edition of the magazine, the general public doesn't give a rat's ________ . We know by way of the number of hits generated from the last issue that many people were interested enough to read about the problems. But there is no dust storm on the horizon created by cries to change the laws.

Nevada's politics are still run in a 19th Century atmosphere of "Good Old Boys" working the deep well. Today, there is just a bit of difference as outlined by our correspondent Donald J. Cook who wrote, "We have the small town good ol' boy syndrome of yesteryear, and the big money special interests of modern day big cities. We end up with the best politicians that money can buy."

SOS Dean Heller has recommended some changes in the law, and some politicians have accepted those changes voluntarily, but nothing has been passed by the legislature to correct many of the problems that are being discussed, not just in these pages, but around the Silver State as well. During the 2002 campaign cycle, Brian Sandoval was quoted as saying, "We are going to check out everybody who contributes to my campaign because I think the attorney general needs to be held to a different standard."

That's why it might seem that we are picking on him, but he is absolutely correct. If the top cop can't do it right, how can we expect the guy from a rural county running for some obscure office to do it right? When we found what appeared to be discrepancies in his contributions reports, as posted in our last issue, General Sandoval immediately made corrections. Amended C&E reports have been filed with the Secretary of State and are available for viewing at the SOS web site.

Sandoval has been quoted as saying he doesn't believe the process itself is sinister, but rather, it's the amounts of money that change hands during an election. Some who are very cynical say no office in the state is worth taking illegal contributions, except maybe that of U.S. Senator. More than likely though, it isn't the office that's worth it, rather, it's what that office might offer to someone looking for special treatment.

There are two groups that immediately come to mind that might just want a politician or two in their pockets. Gaming interests in Nevada pay the lowest gaming taxes of any place in the world, and their clout can be measured. Ask our last anointed governor. The other group of course would be developers. Nevada is still the fastest growing state in the nation, and those developers have to be looking for friends in the lawmaking world.

Sandoval said, "If I go to a fund-raiser and have people I've never met in my life handing me checks for $5,000 and $10,000, and they are midlevel or lower employees, it raises an issue for me." He also said, "It's not often you get a check for $5,000 or $10,000 from individuals you've never met." The point is, buying power is something every politician must watch out for, and the C&E reports should be such that it would be difficult for someone to do it.

As has been mentioned many times, if a discrepancy is found in one of the reports, the secretary of state can't do anything about it on his own. A written complaint must be filed before any action can be taken. Recently, an assemblyman from southern Nevada was accused of paying himself a wage from his campaign fund. This would be an illegal expense, and a complaint was filed. At this time, the process has just begun with a letter from SOS Dean Heller to Assemblyman Christensen asking for an explanation. This would not be the first time such a letter has been sent to a public figure, but one Observer reader, Michael Robinson, former Reno Mayoral candidate has reservations about the process.

Here is what Robinson said.

Editor, The Observer,

Nevada's campaign laws are useless because they are not enforced. Whether or not the Secretary of State has the authority to enforce them is debatable. It just may be easier for Secretary Heller to take that position. If my experience with the Secretary's office over the complaint I filed against (Reno) Mayor (Jeff) Griffin is any indication, the complaint filed against Chad Christensen will come to naught.

Mayor Griffin, responding to the Secretary's first letter questioning four entries on his campaign report, stated that he had done what was required by completing the report. After my repeated phone calls to the Secretary's assistant a second letter was sent. After much delay Griffin again side stepped the specific issues. In my opinion Secretary Heller is wasting staff time and money unless he has the will to fully question campaign income and expense reports and expose any violations. Then it would be up to the Attorney General to prosecute.

Mike Robinson

Reno, Nevada

It's obvious that there is more than one view regarding whether the secretary of state can take action on his own, what action that might be, and whether or not there would be a level of questionable action on the part of the politician before action is taken. These are questions that should be asked and answered from the hallowed halls of Nevada's Legislature. Should the secretary of state have to sit on his hands until a complaint is filed? If a complaint is filed, should there be more than just a letter? Should there be automatic hearings? Should charges be filed immediately?

When a contribution can be attributed to a personal loan from a candidate's own bank account without any paperwork to support the fact the candidate actually had enough money to cover his loan well prior to the loan, and simply list an expense as consulting, again with no paper work outlining what was consulted about, it opens up so many possible questions.

Many of the comments we received at the Observer indicated a desire to see politicians in a different light, but held to the belief that all politicians are crooks. That shady money deals, deals for favors, deals to line the pockets of the candidates, and other illegal actions are what's expected. As one correspondent said, "If all we have to choose from is one candidate who might steal, and the other who has stolen, what the hell is the difference." We at the Observer don't hold to that, but it is the public perception, unfortunately, and only the politicians will be able to change that.