When Dan DeQuille wrote for the Territorial Enterprise of Virginia City fame, back in the 19th century, he used this depiction of a braying, angry, miner's burro. He always called it, as did most of the prospectors of the day, "A Washoe Canary." Below are some of our brayings, that is, Washoe Canary Songs.

On Campaign Finance Reform

by David Thompson

Our readers may have noticed the close scrutiny that we at The Nevada Observer are giving to campaign contributions. Many of you may be wondering, "Why?

The reason is that we like good government, and we don't like corruption.

A public office is supposed to be a public trust, held for the sole benefit of the people of the State. That's what NRS 281.421 says, anyway. Public officials are supposed to treat people alike, so that the government does not, in the words of the Constitution, "deny to any person within its jurisdiction the equal protection of the laws."

That's the theory. How does it really work? In most people's experience, not very well. Let's say that you want to talk to an elected public official about a problem. Well, you're not the only one, so you get to wait your turn in line. The elected official probably doesn't know who you are, and won't recognize your name on the telephone message pad. But he almost certainly will recognize the name of someone who contributed $10,000 to his election campaign.

The contributor might say that his contribution gives him "access." That's a polite way of saying that the contributor paid so that he could go directly to the front of the line, ahead of you and all the other citizens who were waiting to talk to that public official.

What else can the contributor get for his contribution? That depends on how rotten things are in your home town. He might be able to get lucrative government contracts, even though he charges high prices and offers sub-standard service. He might be able to get a special tax break, so he doesn't have to pay his fair share of the costs of government. He might be able to get his hands on some public land, for little or no cost to him. Or he might be able to get that public official to overlook his sins -- or even his crimes.

That gets us to the subject of campaign finance laws, and campaign finance reform. The theory behind campaign finance laws is to require disclosure of who's giving what to whom. That way, the public can theoretically see who is giving money to the candidate. That way, the public can watch to see whether the candidate, if elected, favors his contributors over the general public.

Here in Nevada, there is a big difference between theory and practice. Nevada's campaign finance laws are so lax and poorly enforced that "campaign contributions" in this State are barely distinguishable from bribes. Let's take a look at how the laws are supposed to work.

In Nevada, a bribe is some form of compensation, gratuity or reward, which is given by a person, with the intent or upon an agreement or understanding to influence an executive or administrative officer of the state, a legislator or judicial officer in the exercise of his function or powers with respect to any act, decision, vote, opinion or other proceeding. It is a felony to offer or pay a bribe, and it is a felony to seek or receive a bribe.

A campaign contribution is a gift, loan, conveyance, deposit, payment, transfer or distribution of money or of anything of value other than the services of a volunteer, made by a person to a candidate for elective office.

From these laws, it is easy to see that a campaign contribution and a bribe aren't necessarily different things. A gift, loan, conveyance, deposit, payment, transfer or distribution of money or of anything of value, made in the form of a campaign contribution, can also be a bribe if the person giving it or the person receiving it intend or have agreed that the contribution is made to influence the public officer, judicial officer or legislator in the exercise of his function or powers with respect to any act, decision, vote, or opinion. There are two tests that you can use to distinguish a bribe from a campaign contribution:

(1) Bribery requires the specific and corrupt intent to influence the officer in the exercise of his function or powers with respect to any act, decision, vote, opinion or other proceeding; and

(2) A bribe is a gift or payment to the corrupt public officer which has no restrictions on handling or use. A campaign contribution, on the other hand, is made to a political campaign, for campaign purposes. The Nevada Campaign Practices Act (NRS Chapter 294A) has certain reporting requirements and other handling restrictions on the contribution.

So, what kind of reporting requirements and other handling restrictions on the contributions do the Nevada Campaign Practices Act (NRS Chapter 294A) require?

In Nevada, when a person collects $100 or more in campaign contributions, he has one week to open a special campaign bank account and deposit the contributions into it. All campaign contributions have to be reported, and all contributions in the form of negotiable instruments, like cash, checks and money orders, have to be deposited into the campaign bank account. The candidate cannot mix that money with funds from any other sources. He cannot accept more than $10,000 from a single contributor. If the candidate spends the contributions, he can only spend them on campaign expenses "to advocate expressly the election or defeat of a clearly identified candidate" -- in other words, to get himself elected. He has to fill out reports on how the campaign contribution money was spent, under penalty of perjury, and file them with the Nevada Secretary of State. The Nevada Secretary of State is required to maintain these reports and make them available for public inspection.

So what's wrong with that? It sounds air-tight, doesn't it? Well, it isn't. Let's look at some of the problems.

As it happens, a number of the candidates don't (or won't) fill out the forms. On April 17, 2003, Nevada Secretary of State Dean Heller announced that 20 candidates had failed to file the required reports. In January of this year, the State Attorney General began filing lawsuits against the candidates in default from the 2002 elections. Well, at least the public knows who not to vote for, right? Wrong. You have to go find the names of the scofflaws for yourself -- the Secretary of State's website http://sos.state.nv.us/ does not provide that information.

Well, only 20 candidates failed to fill out their forms. Maybe there are those who think 20 isn't very many. No doubt the rest of the forms have been carefully filed and reviewed for discrepancies, with the names of those who violate the law being promptly turned over to the Nevada Attorney General. Do you think that's true? If you do, you're wrong.

The Nevada State Legislature hasn't appropriated any money for that sort of thing, so no government officials review the reports for accuracy. Even if someone noticed something wrong, the Secretary of State has taken the position that he is powerless to act unless some member of the public steps forward and files a complaint. All right. So you have to say the magic words, and then the Secretary of State will act. What do you have to do? How do you file a complaint? You'll have to ask the Secretary of State, because the information on filing a complaint isn't posted on his website.

Are you thinking that this state of affairs (pun intended) is a little unbelievable? Would you like to hear more? If the citizens have to be the ones who check the campaign contributions and file complaints with the Secretary of State's office, access to the necessary information should be pretty easy -- or so you'd think. It isn't.

Candidates and public officers are required to fill out financial disclosure reports under penalty of perjury, with the Nevada Secretary of State and the Nevada Commission on Ethics on their financial condition , listing persons who gave them gifts and who loaned them money. Would you like to see one filled out by a candidate? So would we. The Nevada Commission on Ethics hasn't seen fit to scan the reports and post them on their website. The person who handled our inquiries at the web site was polite and helpful, and offered to mail us a copy of a financial disclosure form if we had a specific one in mind. However, you'll have to drive to Carson City if you want to look at more than a few of the disclosure forms.

But let's get back to the reports you can see without leaving your armchair -- the ones at the Secretary of State's website. All the reports are there, aren't they? No. The reports of a number of local officials aren't posted at the Secretary of State's website. You have to go to the website of the county or city clerk's office -- if they have a website (five counties don't), and if they post that sort of thing (only Clark and Washoe counties do). So here's where that leaves us. In fifteen of Nevada's seventeen counties, if you want to inspect those reports, you have to drive to the county clerk's office, find a nice parking spot, go inside, and ask the office personnel to let you look at the reports. You may have a motor vehicle, and the county clerk may have a xerox machine, but other than that you're dealing with the same public records system Nevada has had since it became a state in 1864.

Our experience with these websites was interesting. On April 8 we sent e-mails to the clerks of Carson City, Churchill, Douglas, Esmeralda, Eureka, Humboldt, Lander, Lyon, Nye and White Pine counties, asking them whether or not they offered campaign finance statements and completed financial disclosure forms on their websites. Only four of the ten county clerks replied -- the other six were apparently asleep at the switch. It would have been just as effective to fold our inquiry up into a paper airplane and sent it gently gliding out the window as to try to contact the county clerks of Carson City, Churchill, Douglas, Esmeralda, Lander and Lyon Counties by e-mail. As for the four who did answer -- Frances Gale of Eureka County, Tami Rae Spero of Humboldt County, Sandra "Sam" Merlino of Nye County, and Donna Bath of White Pine County -- hats off to you, ladies!

What about that distinction between bribes and campaign contributions? What about a bribe being a gift or payment to the corrupt public officer which has no restrictions on handling or use, while a campaign contribution, on the other hand, is made to a political campaign, for campaign purposes? The campaign finance law makes that distinction clear, doesn't it? Not really.

To see how this works, let's take the idea that a campaign contribution is made to a political campaign, for campaign purposes. All right, that sounds good. How does it work? In Nevada a contributor is allowed to make a campaign contribution immediately after the election, when the campaign is over. Now how honest is that? The contributor waits until he finds out who won, and then makes his contribution to the newly-elected candidate. No element of chance here -- it's basically a rigged bet. In fact, in the gambling world this is a well-known form of cheating, called "past-posting." Want to bet on it? Don't try it in Nevada gaming establishments, where it's a crime. It's perfectly acceptable to our state's legislators as a campaign practice, though. After all, if you know who the winner was, your bet isn't really a gamble.

What about top law enforcement officers? Would they accept that sort of "sure-thing" contribution? Aren't the contributors giving in order to help the candidate of their choice with his unpaid campaign debts? Surely people who were going to give money to a candidate after the election is over wouldn't favor the winner over the loser, would they? What do you think? In 2002, the statewide elections were held on November 5. Between the election and March 20, 2003, Attorney General Brian Sandoval took in $74,000 in "past-posting" contributions from contributors donating $1,000 or more; his defeated rival John Hunt got only $4,894 from the same group. Vae victus! ("Woe to the vanquished!"), as the Romans used to say.

What about restrictions on the handling or use of the contribution? What happens if the candidate got elected, and had some of his campaign contributions left over? Does he give the money back to the contributors, or what? Well, the legislature didn't really make up its mind as to whether the contribution was actually made for campaign purposes only, or whether the candidate gets a sort of quasi-property interest in the money. The candidate can, of course, give the money back. But he doesn't have to. NRS 294A.160(2), (3) and (4) gives the candidate five options.

(1) He can return the unspent money to contributors;

(2) He can use the money in his next election or for the payment of other expenses related to public office or his campaign;

(3) He can contribute the money to the campaigns of other candidates for public office or a political party or a person or group of persons advocating the passage or defeat of a question or group of questions on the ballot, or any combination of these persons or groups;

(4) He can donate the money to any tax-exempt nonprofit entity; or

(5) He can dispose of the money in any combination of these methods.

Now this bit of legislation is truly strange. The campaign contribution was made to the candidate, to be spent on campaign purposes. The contribution wasn't spent that way, and in fact, the contribution wasn't spent at all. Why then should the candidate have any say in the distribution of the unused money? NRS 294A.160(1) makes it perfectly clear that those funds don't belong to the candidate.

But we're not understanding the realities here. The legislature wanted to make sure a candidate could use that money, which was not his, to enhance his position -- to give him a little "juice." That gives us scenarios like this:

(1) A contributor makes a campaign contribution to Jane Roe. Under no circumstances would she have made a contribution to John Doe. But Jane Roe can take the contributor's money and make that contribution, and the contributor can't do anything about it.

(2) Perhaps the contributor actually believed in the campaign proposals of Jane Roe. In an effort to make a difference, the contributor gave Jane Roe a contribution. Let's say the contributor was an ordinary working man or woman, and could ill afford the contribution. If Jane Roe hadn't needed it to get elected, the contributor would have given it to another candidate, with a similar viewpoint. Instead, NRS 294A.160 allows the candidate to give the money to charity. Of course, since we're talking about the legislature here, we can forget the thought that it might have been more charitable to have the candidate return the contribution to the hard-working and poorly-paid contributor.

(3) The candidate gets accused of some crime, or a violation of the State ethics laws. He takes his unspent contributions -- not his money, but money from the public -- and uses it to pay his lawyer, claiming that this is one of the "expenses related to public office." Pretty neat, don't you think?

Well, let's move on. Maybe there's a bright spot out there. Have you ever walked into a motion picture theater and started to watch a film which had already begun? Do you remember sitting there in the darkness trying to understand the plot? As a usual thing, do you prefer to start watching a film at its beginning? If you're watching the campaign finance story, that's not an option. There is no beginning. Why not? Because the law does not require candidates to declare their beginning balance at the start of the campaign. You can't tell what happened to the money the candidate got in between elections, or how it was spent.

The public is concerned about the honesty of the candidates, which is why they insisted on having a campaign finance law. So, why doesn't NRS Chapter 294A require disclosure of opening balances for campaign contributions? Perhaps it's because the legislators don't think you care enough to look at what they're doing with the money.

How can a citizen find out if the candidate reported the contributions accurately? You can't. The candidates fill out the forms on the "honor system." There is no way a citizen can verify the information. What if you don't trust the candidate? Too bad. "Trust me" is all you get here -- the State Legislature didn't think any more disclosure was necessary.

What about the $10,000 contribution limit? Can the candidates get around that? Of course they can. In 1994, the State Controller asked the Attorney General: "Does NRS 294A.110 limit the contribution by a business organization which operates through two or more corporations to the maximum specified in the statute, or does the limitation apply only to the maximum amount each individual corporation can contribute irrespective of its relationship to other corporations?" The Attorney General rendered a written opinion -- AGO 1994-17 -- which concluded: "Each business entity may give the maximum amount allowed in NRS 294A.110 irrespective of its relationship to other business organizations." How does that work? Sylvester Sleek makes a $10,000 campaign contribution to the candidate. Sleek's two corporations, Tweedledum Inc. and Tweedledee Inc., each donate $10,000 to the candidate. Mr. Sleek's wife and children, and their corporations, may each have a plump contribution for the candidate. It makes Sylvester Sleek's name a lot easier for the candidate to remember -- and perhaps Mr. Sleek brings all of the contributions to deliver to the candidate all at once, just to emphasize the pleasant association.

Does this really happen? Could it happen in, say, the Attorney General's race in 2002 -- the election for the top law enforcement officer in the State? Have a look at the 2002 Contributions & Expenditures Report of the defeated Democratic Party candidate, John Hunt for reporting period No. 1. On February 1, 2002, John R. Klai II made a $10,000 contribution, and Klai Juba Architects donated another $10,000 to Mr. Hunt (both in section 1, p. 17 of 62). About a month later, on March 1, 2002, Daniel J. Juba contributed $10,000 to Mr. Hunt (section 1, p. 16 of 62). If you look at the Secretary of State's website, commercial recordings division corporate names search engine, and enter "Klai Juba" as the search term, there is only one entry -- Klai Juba Architects, Ltd. If you press the "view selection" button, you can see that the president of that corporation is John R. Klai II and the secretary and treasurer is Daniel J. Juba.

Need more convincing? In September, 2002, the opposing candidate's campaign manager filed a complaint with the Nevada Secretary of State. According to at least one news report, the complaint charged that persons and corporations linked to Vestin Group, a mortgage company headed by Michael Shustek, had contributed nearly $160,000 to Hunt's campaign -- more than 25% of all the money collected by Hunt at that time.

Hunt denied that there was anything wrong with the contributions, and on October 3, 2003, the Nevada Secretary of State announced "that due to a lack of clear statutory authority, a lack of cooperation on the part of many witnesses, and resource allocation issues, the investigation conducted at his request by the Nevada Department of Investigations (NDI) into claims of illegal campaign practices directed at former Attorney General candidate John Hunt during the 2002 General Election has hit a standstill and is being closed for the present time. Heller said NDI's report concludes that although the facts surrounding the contributions create the appearance that such contributions were possibly made in violation of state election law, the contributors in question either denied such claims or refused to comment."

As for Brian Sandoval, the man who won the election for Attorney General, his C&E Reports also show Tweedledum and Tweedledee donations. On September 17, 2001 (2001 C&E Report (Amended), p. 8 of 37) the Mandalay Resort Group and the Mandalay Bay Resort & Casino each contributed $10,000 to Sandoval. The Mirage Corporation, the MGM Mirage and the MGM Grand Hotel LLC each gave Sandoval $10,000 on February 15, 2002 (1st Reporting period (Amended), section 2, p. 47 of 167).

Both candidates for Attorney General took more than $10,000 from a single person during the campaign, but both refunded the "overages." Thomas J. Breitling actually gave Sandoval $10,300 in contributions (1st Reporting period (Amended), section 1, p. 14 of 166), but Sandoval gave $300 back (1st Reporting period (Amended), section 1, p. 103 of 166). Hunt got $20,000 in a single huge Searchlight Leadership Fund contribution (1st Reporting period, section 2, p. 28 of 62), but eventually returned $10,000 (1st Reporting period, section 2, p. 50 of 62) of it after holding onto it for a few months.

What about NRS 294A.100, you may ask? Isn't it a felony for a person to give, and for a candidate to accept, more than $10,000 in contributions from the same person? Not the way the Nevada State Legislature wrote the law.

In every crime or public offense there must exist a union, or joint operation of act and intention, or criminal negligence. In the case of a violation of NRS 294A.100, the intent requirement is that the act be "willful." In criminal law, the term has two distinct meanings, depending on whether the statute requires a general or specific intent to commit the offense. In a "general intent" crime, the accused need only commit the prohibited act. In a "specific intent" crime, the accused must commit the prohibited act and know that it was wrong. A person who commits the act "under an ignorance or mistake of fact" is exempt from punishment where a specific intent to commit the crime is required.

The intent requirement of NRS 294A.100 is unclear -- the legislature did not bother to define the term "willfully." Since NRS 294A.100 is a criminal law, the Nevada Supreme Court requires that an ambiguity in the statute be strictly construed and any doubt be resolved in favor of the defendant under "the Rule of Lenity." This is how the Nevada Supreme Court defined the doctrine in Ex Parte Davis, 33 Nev. 309, 318, 110 Pac. 1131 (1910): "Penal statutes should be so clear as to leave no room for doubt as to the intention of the legislature, and where a reasonable doubt does exist as to whether the person charged with a violation of its provisions is within the statute, that doubt must be resolved in favor of the individual."

What does that mean? It means that a prosecution under NRS 294A.100 is unlikely to succeed if it requires showing an evil motive or intent to violate the law. In other words, the law is effectively unenforceable.

NRS 294A.100 provides the only specific criminal penalty for violations of NRS Chapter 294A. All other violations of NRS Chapter 294A are subject to civil (but not criminal) penalties. Furthermore, as if these weren't obstacle enough to the effective enforcement of the law, there's this: wherever the crime or violation may have happened, proceedings to enforce the criminal or civil punishment provisions of NRS Chapter 294A must be brought only in the First Judicial District Court, in Carson City. The prosecutor, the defendant, and all the witnesses must drive (or fly and drive) from wherever they may be, and for however long it takes, to Carson City to enforce the law. And just to make sure that Carson City is enthusiastic about this state of affairs, the law makes no provision to compensate the city or county for any expenses of trial.

Well, the reader may find all of this depressing. Let's move on from the techniques used to avoid the limits on campaign contributions to something different. What about that special campaign checking account the candidates are required to open? Are the bank statements available?

Are you joking? Candidates aren't even required to disclose where the account is -- or was. Consequently, the public has no way of knowing whether the campaign contributions were ever deposited, or whether the checks were just cashed and pocketed by the candidate.

Would a candidate, let alone a public official, do that sort of thing? In Las Vegas, four members and ex-members of the Clark County Commission were indicted late last year -- on November 6, 2003 -- by a federal grand jury. The indictment charged that a topless bar owner provided "campaign contributions" in exchange for favorable treatment in twelve separate official matters, which you can read about here and here.

According to pages 4, 6-7 and 17-18 of the indictment, the "campaign contributions" weren't reported by the officials in question -- Erin Kenny, Lance Malone, Mary Kincaid-Chauncey [check it out here and here] and Dario Herrera [check it out here and here .] Where did the money actually go? We can't be sure until the defendants go on trial and the jury tells us what they found.

Well, surely if someone does that and gets caught, they could be prosecuted for perjury. After all, it says so right on the forms -- doesn't it? If that's your answer, you're half right. That's what it says on the forms.  

Here are the applicable perjury statutes:

NRS 199.120 provides: "Every person, having taken a lawful oath or made affirmation in a judicial proceeding or in any other matter where, by law, an oath or affirmation is required and no other penalty is prescribed, who willfully makes an unqualified statement of that which he does not know to be true, or who swears or affirms willfully and falsely in a matter material to the issue or point in question, or who suborns any other person to make such unqualified statement or to swear and affirm in such manner is guilty of perjury or subornation of perjury, as the case may be . . . ." 

According to NRS 199.180: "It shall be no defense to a prosecution for perjury that an oath was administered or taken in an irregular manner or that the defendant was not competent to give the testimony, deposition, certificate, or affidavit of which falsehood is alleged. It shall be sufficient that he actually gave such testimony or made such deposition, certificate or affidavit."

These two anti-perjury laws look tight enough to trap the world's most slippery weasel, but they aren't. In the case of White v. State, 102 Nev. 153, 156-7, 717 P.2d 45 (1986), the Nevada Supreme Court reasoned that the act of signing a declaration under penalty of perjury does not constitute the act or obligation of the oath itself: "[T]he mere signing of an affidavit before an officer does not constitute the act necessary to constitute an oath, and the mere delivery of a signed affidavit to an officer is not considered to be "an unequivocal and present act by which the Affiant consciously takes upon himself the obligation of an oath." The court did not read NRS 199.180 as relaxing the requirement that an oath actually be taken.

In other words, in a perjury case it is not enough to show that the political candidate or public officer signed a document containing actual lies or materially false statements, above a caption such as "_____ does hereby swear that he/she has not willfully or knowingly falsified any statement contained herein;" "I declare under penalty of perjury that the foregoing is true and correct;" or "I do hereby swear (or affirm) under penalty of perjury that the assertions contained in this report are true." To successfully prosecute the case, the State must also show that an oath was actually administered, by an officer authorized to administer oaths. Furthermore, the oath has to be required by law, and not just be a gratuitous add-on.

So where does this leave us? It leaves us in the lurch. Now you know why an effective state campaign finance law is necessary, and you know some of the reasons why Nevada's campaign contribution laws need a lot of changes. This problem is like having something dead in your car. It certainly won't get any better, and it will surely only get worse.

We're Covered. Don't Worry. There Are No Ethics Here.

by Johnny Gunn

While working on the Contributions and Ethics series of feature articles over the last several weeks, we continually bumped into the word "ethics." Does that word mean anything to a government entity? To find out, we went to the new Reno website, actually a combined web site involving several northern Nevada government entities. You might enjoy going to your own local government web site and see what they might have to say.

We went to http://yournevada.com, a site established by the city of Reno, Washoe County, and others, and on their search page we entered simply, "Ethics." This is the result:

If you do check out your own local government web site, it would not hurt our feelings at The Nevada Observer to know about what you find. Ethics? Apparently there are none in northern Nevada.