Harry Reid’s Long, Steady Accretion of Power & Wealth

By Adam O’Neal – April 24, 2014

Editor’s Note: RealClearPolitics neglected to seek comment or input from Senate Majority Leader Harry Reid’s office while preparing a story published Thursday on the senator’s rise from modest circumstances in Nevada to a place of power and affluence in the nation’s capital. The text has been amended with the correction of a factual error and includes responses throughout the piece from Sen. Reid’s communications director, Adam Jentleson. Those passages appear in italics.

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CORRECTIONS: A previous version of the article said that the Bullhead City parcel did not appear on Sen. Reid’s 2012 financial disclosure. In fact, the property is listed in the documents. Also, this article had said that Sen. Reid spent “approximately eight years” working as a private practice attorney. In fact, the correct span is at least 14 years between 1964 and 1982, while Reid also held several public offices. (His spokesman is unsure if he practiced law regularly while serving as lieutenant governor.)

The first of two parts

Last month, as the Senate was busy negotiating the final details of its Ukraine aid package, Majority Leader Harry Reid became temporarily distracted with a campaign finance issue. Since winning re-election in 2010, Reid’s campaign had purchased gifts for supporters and donors from vendors like Bed Bath & Beyond, Amazon, Nordstrom, and the Senate gift shop, among others. But one round of spending was directed to a less recognizable firm: Ryan Elisabeth, a jewelry line.

In 2012 and 2013, the campaign spent $31,267 purchasing gifts from the company, which is owned by Reid’s granddaughter, Ryan Elisabeth Reid. All told, she took in nearly seven times more cash than all vendors of donor gifts combined during that period of time.

Veteran Nevada political journalist Jon Ralston first reported the news after receiving a tip about the expenditures. (Ryan Elisabeth’s last name did not appear on the FEC reports, and the senator’s office initially failed to confirm her identity.) While Sen. Reid does not appear to have broken the law, he understood that the purchases created a perception of favoritism. Lamenting the unwanted attention heaped on his granddaughter, he decided after the news broke that “it would be best to pay for her work out of my own pocket.”

This was not the first time that Reid had mixed family and politics — or potentially run afoul of ethics rules.

Harry Reid has spent more than 40 years in government, starting as a small city’s attorney and eventually becoming the most powerful senator in the country. He has raised tens of millions of dollars in political contributions, established himself as an institution in Nevada politics along the way, and made himself a very wealthy man. His humble roots — from growing up in a remote desert town to working six days a week as a Capitol police officer while in law school — are legend in Washington and Nevada. Reid exhibits the toughness of a once destitute boy who completely transformed his life through determination, hard work — and good luck.

Some who have watched Reid closely over the years, however, say that his political and economic ascendance has made him increasingly willing to use his power (and apparent electoral resilience) in ways that appear unsavory or nepotistic. The jewelry purchases are only the latest example.

David Damore — a University of Nevada, Las Vegas professor whose research focuses on Silver State politics — has closely followed Reid for years. He said that the balance between helping family and constituents is a common tension for powerful politicians. “I’m going to put this politely: Their personal interests, they seem to see, represent the common good. They don’t differentiate those two.”

Another longtime Reid-watcher believes that the latest string of incidents, stretching over the last decade, is just a result of more coverage of Reid — and not a product of him changing his style.

“As he’s become more known and a much higher dollar target for his critics, anything he does to assist his family now pegs on the radar,” said John L. Smith, a columnist who has written about Nevada politics for nearly as long as Reid has been in Washington. “I don’t think he’s changed his personal method of operation throughout his whole career.”

Smith added, “I can’t see him ever denying his family a break or an opportunity if he could provide it. I guess that’s just part of being a dad and a guy with a certain level of influence.”

Nowhere is Reid’s influence more profound than in his home state, where he has built a dizzying network of mutually beneficial political, personal, and business alliances. These associations benefit Reid, his family, his close friends, and, very often, the state that he loves. The sphere of influence took decades to create.

After returning from law school at the George Washington University, Reid was hired as city attorney in Henderson (the southern Nevada city where he had attended high school and met his wife, Landra). In 1966, he ran for a position on a local hospital’s board of trustees after, he recalled, being taken aback at the chairman of the board’s rudeness.

He won the election and two years later sought a promotion to the Nevada Assembly. While in the Assembly, Reid further developed relationships with important players in state politics and began honing his image as a strong consumer advocate. After two busy years introducing a record number of bills, Nevadans elected Reid to be their 25th lieutenant governor. (He ran on a ticket with Mike O’Callaghan, a close friend and mentor.)

At 31, the boy who had grown up in an alcoholic miner’s cabin stood just a heartbeat away from becoming his state’s most powerful politician. But Reid felt he could achieve even more.

He ran for a U.S. Senate seat in 1974 but narrowly lost, despite the wide expectation that he would win. Reid later told The New Yorker, “Everything was in my favor. But I was young and impulsive and I attacked everybody.” A year later, he ran for mayor of Las Vegas and lost again, that time by a much wider margin. Reid collected himself, temporarily abandoning the pursuit of elective office, and worked as a lawyer in Las Vegas.

But he returned to public life in 1977 when O’Callaghan, still governor, appointed his former second-in-command to be chairman of the Nevada Gaming Commission. The job — seen then as undesirable, difficult, and perhaps dangerous — further burnished Reid’s reputation as a tough and honorable public servant. While running the Gaming Commission, Reid publicly jousted with mob bosses, tried to choke someone for attempting to bribe him (in front of FBI agents who were filming the sting), and dealt with the aftermath of his wife discovering a bomb attached to the family car.

By the time he decided to run for a newly created House seat in 1982, Reid had standing as a politician with uniquely strong integrity — and guts. He had taken on a powerful telephone company as a freshman in the Nevada Assembly, while also sponsoring innovative air pollution legislation. Nevadans also closely associated him with O’Callaghan, by then a popular former governor nurturing a reformist legacy. Reid’s show of strength and resilience during his Gaming Commission tenure rounded out his picaresque political profile. Still relatively young, he spent just two terms in the House before graduating to the Senate in 1987. He has been there ever since.

But Reid’s political ascent didn’t stop when he arrived at the upper chamber. A savvy behind-the-scenes player, he became Democratic whip in 1999. After alternating between majority whip and minority whip for several years, his caucus elected him minority leader in 2005. Democrats took control of the Senate after the 2006 midterm elections, and Reid has served as majority leader ever since. For most of the past decade, he has been the most powerful lawmaker in the United States Senate. He is also indisputably the most powerful politician in Nevada — Democratic or Republican.

“You don’t go far in Nevada before you run into Harry Reid, or one of his people, or somebody who he’s helped come along, or someone he’s helping come along,” explained Steve Sebelius, a Nevada political journalist and longtime Reid-watcher. “His reach is pretty far. … He’s at the top of the heap.”

“It’s like an iron fist inside a titanium glove,” said Sebelius of Reid’s control over the state’s Democratic Party. “His people are firmly in control. Who runs is who he wants to run, and who doesn’t run is who he doesn’t want to run. There’s no one on the Republican side with that kind of influence and control.”

Damore suggested that Reid — because of his extensive in-state political network and status as Senate majority leader — may be “the most powerful politician in Nevada state history,” an assertion that several other state political experts agreed with (or at least saw some merit in). But Nevada politicos don’t really debate about the degree of Reid’s power. Rather, the question is whether he has always used it appropriately.

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Nevada Land Grabber

After being asked whether his personal reimbursement to the campaign for Ryan Elisabeth’s jewelry served as evidence of wrongdoing, Reid replied, “No, in fact, it wasn’t.” He added, “I’m just very fortunate I could write that check.”

Contrary to popular belief, Reid arrived in Washington wealthy; he had a net worth of at least — and likely more than — $1 million, according to the Las Vegas Review-Journal. Although Reid had spent most of the previous 15 years in public office, or pursuing public office, he still proved to be a robust earner. After his term as lieutenant governor ended in 1975, he would not return to public office full time until 1983. (The Gaming Commission is only part-time work.) All told, he worked at least 14 years as a private-practice attorney between 1964 and 1982.

As a former public official with strong political connections, he found lucrative work in Las Vegas. It appears his personal boom was simply part of the broader expansion of Nevada’s economy. Some attorneys at the time, particularly those with political networks, would occasionally receive payment in the form of real estate. Given Nevada’s rapid growth, such payments would become extremely valuable over time. It’s unclear if Reid received land as compensation then, but he certainly made good money and invested in real estate early on.

Theoretically, working as a lawmaker should have severely limited Reid’s earning potential. In the early 1980s, members of Congress received a salary of about $70,000 per year. Though pay has generally risen — and Reid receives more than most lawmakers because of his leadership position — he has never earned more than $200,000 per year in salary.

Yet, his estimated net worth peaked at around $10 million just a few years ago, and he has remained consistently wealthier than when he entered Congress. (Reid reported that his net worth in 2012 was somewhere between $2.8 million and $6.3 million. His 2013 financial disclosures will be released later this year.) As of 2012, real estate composed about one-third of his portfolio. The rest was made up of government bonds; stakes in energy, electronics, pharmaceutical, and chemical companies; and other investments. He also possesses significant mining claims potentially worth hundreds of thousands of dollars.

How did Reid manage to grow his net worth so significantly while raising a large family, on a public official’s salary, and incurring the expenses associated with maintaining two residences on opposite sides of the country? Reid has lived frugally — before buying a house in recent years, he kept just a trailer in his hometown of Searchlight — and he has made undeniably savvy investments. More significantly, however, is his willingness to enter political and ethical gray areas to make money.

Reid has walked a fine line over the years, occasionally breaking rules or engaging in brazenly unseemly behavior during his pursuit of wealth. Further, he has also used his position to save money in ways that the general public can’t — a practice that creates public relations issues and raises questions about the senator’s ethics. As for any illegal behavior or obvious wrongdoing, Jon Ralston told RCP, “There’s been some smoke but there’s never any fire on that.”

There may be quite a bit of smoke.

In 1998, Reid invested $400,000 in an undeveloped residential property located on the outskirts of Las Vegas. Reid’s partner in the deal was attorney Jay Brown, whom Ralston describes as a “master manipulator.” Reid transferred his share of the property to a company Brown controlled in 2001. By transferring the land to Brown’s firm, Reid avoided legal liability and some taxes. But Reid didn’t note the transfer — or that he had any stake in the company — in his financial disclosure forms, despite rules requiring such transfers to be reported. By 2004, Brown’s company sold the land, which had been rezoned for a shopping center, and Reid received $1.1 million. He reported the sale as if he had always had control of the property.

When the Associated Press asked Reid about the deal during a 2006 interview, he hung up on the reporter. A spokesman later said that “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.” However, there was no physical proof that Reid had any stake in Brown’s company. (Reid’s office said that this is “simply not true” and pointed to testimony before the Clark County Commission about Reid’s involvement with the property. Jentleson also said that Nevada law did not require Reid to disclose the change of personal ownership.) The story may have caused Reid public embarrassment — he amended his ethics reports to include the full history of the property — but he walked away from the deal some $700,000 richer.

(Sen. Reid’s office asserted that the land deal did not qualify as “smoke” or “problematic,” saying that the story “didn’t actually show any wrongdoing. Senator Reid is not the first person in America to have made a profitable land sale and I suspect he won’t be the last but the last time I checked there’s nothing wrong with selling land.”)

That isn’t the only problematic land deal Reid was involved with at the time. In 2002, he put $10,000 into a pension fund controlled by another friend, Clair Haycock. The payment gave Reid a sizable parcel of land in Bullhead City, Ariz. According to the Los Angeles Times, Reid purchased the land for one-tenth of its estimated value — and one-fortieth of what it had sold for a decade earlier. (Reid’s office said, “The Bullhead property is a money pit and has continued to lose value since Reid has owned it — he’s tried (and failed) to give it away for free!” The office pointed to articles showing that the property had declined in value.)

Two actions created suspicion afterward. First, Reid sponsored an $18 million earmark for a bridge that would connect Laughlin, Nev., and Bullhead City. (Reid’s office responds that readers “deserve the context of knowing it was actually a bipartisan, bicameral coalition supporting the New Laughlin Bridge.”) This bridge would likely increase property values in the area. (Reid’s office pointed to past articles showing “plenty of experts think the opposite and have said so on record.”)

Reid also introduced legislation that would benefit Haycock’s lubricant company. (Reid’s office: “It wasn’t just Reid, it was a bipartisan coalition,” pointing to two articles describing the legislation and those who supported it. Further, he pointed out that the Haycock family has denied any relationship between the sale and the legislation.) Reid aides denied that his support for the earmark or lubricant dealer bill was related to the land purchase. As of 2012, Reid listed the property as worth between $250,000 and $500,000 on his financial disclosure form.

While some of Reid’s most lucrative deals involved land, he also benefited from investments in stocks. Near the end of the 2005, he invested between $50,000 and $100,000 in the Dow Jones U.S. Energy Sector Fund, which held shares in several major oil companies. According to National Review, the fund closed at $29.15 on the day Reid purchased. Nearly three years later, in August 2008, Reid sold some of his shares, which closed that day at $41.82. Two months later, Reid-supported legislation that would cost oil companies billions in taxes and regulatory fees passed. The Energy Sector Fund’s shares plummeted to $24.41 each.

(Reid’s office responded: “Senator Reid’s stocks are held in a blind trust over which he has no control,” adding, that “ethics experts have long recommend broad-based funds over individual stock ownership.”)

While six-figure investments and million-dollar land deals most greatly impact Reid’s wealth, he also manages to save money through some of the perks that come with being the most powerful politician in Nevada (and the U.S. Senate, for that matter).

In 2004 and 2005, for example, he received ringside seats to three boxing matches from the Nevada Athletic Commission. Arizona Sen. John McCain attended one of the fights with Reid and paid $1,400 to reimburse the commission. Reid did not. However, after receiving criticism for accepting the tickets while considering legislation involving the commission, a Reid spokesman said that the senator would no longer be accepting “these kinds of credentials in the future.”

For years, Reid also took part in the bipartisan tradition of riding on corporate jets at a discounted rate. Between 2001 and 2005, he took 35 trips on corporate planes. Ethics rules required him to reimburse the firms — such as MGM Grand and U.S. Tobacco — the cost of a first-class plane ticket, which is significantly less than a private jet rental rate. Two years after the Jack Abramoff scandal, the Senate enacted new rules requiring senators to pay prohibitively expensive charter rates to ride on a corporate jet. (The senator’s office pointed out that the new ethics legislation was introduced by Reid: “It was the first bill he introduced as majority leader.”)

While in Washington, Reid stays in a one-bedroom condo he owns at the Ritz-Carlton. Each year, residents contribute money to a holiday bonus fund for Ritz staff. Between 2002 and 2005, Reid spent campaign cash — not his own money — to contribute a cumulative total of $3,300 to the holiday fund. His office said that his lawyers had approved the transfers and that a clerical error had prevented them from being properly disclosed. (The explanation was suspect, as several ethics experts said the expenditures clearly violated campaign finance regulations.) Reid reimbursed the campaign and admitted no intentional wrongdoing. (Reid’s office points out the FEC investigated the matter and dismissed the complaint.)

“There is kind of a pattern. He’ll do something pretty bold. There’ll be a lot of publicity about it, and he’ll step back. But then it happens again,” observed Sebelius. “It’s not as if somebody has made a mistake, learned from it … and it never happens again. This keeps happening.”

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Harry Reid’s Long Coattails

By Adam O’Neal – April 25, 2014

 

Second of two parts

Harry Reid is the most powerful man in the U.S. Senate. He’s also the most influential politician in Nevada — maybe in the state’s history. Reid maintains he’s used this clout to help his state, which is manifestly true. But Reid’s political standing has provided a distinct advantage for his family, friends, and donors.

Former Nevada congresswoman Shelley Berkley’s relationship with Reid has spanned six decades — from when she volunteered for his 1968 state Assembly campaign to when he supported her unsuccessful U.S. Senate bid in 2012. Though Berkley has left politics and can now speak frankly, she still offers nothing but praise and admiration for Reid. Berkley told RCP, “With the exception of his family, there is nothing more important to him than the state of Nevada.”

But Reid often sees Nevada’s interests as being intertwined with his family’s.

In 2003, the Los Angeles Times reported that his four sons and his son-in-law collectively represented almost every major industry in the state (gambling, mining, real estate, tourism, and more). The paper’s investigation strongly suggested that their relationship with Reid proved beneficial for their lobbying efforts. “So pervasive are the ties among Reid, members of his family and Nevada’s leading industries and institutions that it’s difficult to find a significant field in which such a relationship does not exist,” the story stated. The article cited approximately 20 special interests related to Reid’s kin, as well as legislation Reid supported that benefited the special interests.

Reid initially defended the practice of family members lobbying his office, saying that their activities are “very transparent.” However, he later relented and banned members of his family from personally lobbying members of his staff — though colleagues at the firms they represented were still able to contact Reid’s office.

Reid’s aides view this differently. “Senator Reid has an official, long-standing policy of not allowing family members to lobby him,” Reid spokesman Adam Jentleson noted, “and in 2007 he wrote the law which codified it for all members of Congress.”

Reid is easily the most influential Democrat in the state, and he remains interested in primary elections — and some say that his involvement has helped one son in particular.

State Democrats “never have meaningful primaries,” simply because Reid “just won’t allow it,” according to David Damore. The University of Nevada, Las Vegas political science professor added that without Reid’s blessing, candidates could still run, but their resources would be severely limited.

Asked to comment on whether Reid has enormous influence in Nevada Democratic primaries and in choosing candidates, Jentleson responded, “Senator Reid has always fought for Nevada, will keep fighting for Nevada and will never apologize for fighting for Nevada.”

Nevada Secretary of State Ross Miller, who is running for state attorney general this year, told RCP that Reid “really helped to guide my political career in a lot of ways.” Asked if he consulted with the senator before deciding on his latest run, Miller replied, “He was one of the people that I called to get a sense of whether or not that office would make sense for my political career.”

Although Reid’s office disputes it, some Nevada political observers believed he became especially involved in Nevada’s lieutenant governor primary this year with an eye toward his own re-election race in 2016. Whether Brian Sandoval, the state’s popular Republican governor, challenges Reid for his Senate seat in 2016 may depend on whether the lieutenant governor who would succeed him is a Republican. By quickly endorsing Democratic Assemblywoman Lucy Flores, Reid appears to have helped the Democrat with the best shot at thwarting Sandoval.

Of the majority leader’s sons, only Rory (his eldest) has held elective office. Rory ran unopposed for Nevada Democratic Party chairman in 1999 before serving on the Clark County Commission from 2003 to 2011. He also ran for governor in 2010. During both the 2002 County Commission race and the 2010 gubernatorial primary, the specter of Sen. Reid’s influence hung over other Democrats.

In 2002, then-state Sen. Dina Titus, now a congresswoman, became interested in running for Clark County commissioner. “The moment she found out Rory Reid was going to run, she stepped aside,” said Steve Sebelius, a longtime Nevada political journalist. “She didn’t want to cross Harry Reid. As a consequence of that, she earned a little bit of goodwill.” According to Sebelius, Titus later defied Reid, a rare move, when she decided to run for Congress against his wishes. (Rep. Titus’ office did not immediately respond to RCP’s request for comment.)

In 2010, Rory Reid coasted to the Democratic nomination for governor. But father didn’t help son much beyond the primary. Both Rory and Harry appeared on the ballot in 2010, when the elder Reid was distinctly vulnerable as Tea Party-fueled anti-incumbent sentiment gained momentum nationwide. Many analysts at the time concluded that Sen. Reid’s presence on the ballot hurt Rory. (And Rory may have agreed: His campaign logo simply said, “Rory 2010.”)

A well-funded campaign and a lifetime observing politics from up close wasn’t enough, though: Sandoval, a former federal judge, easily beat Rory. Fast-forward to 2014, and the Nevada Democratic Party has chosen not to field a serious challenger to Sandoval’s re-election.

Rory paid a $25,000 fine after Secretary of State Miller discovered he had skirted campaign finance rules by obscuring the source of $900,000 in campaign donations through shell organizations. (Miller told RCP that Sen. Reid never discussed the case with him, and Reid’s office said that the senator “read those news stories” at the time.) At the time, Rory asserted that settling the case was meant to point out that the system was unclear in many ways and that he had not committed an intentional wrongdoing. Rory has since declared his retirement from elected office, opting to focus on his local television show and work as a lawyer.

Reid’s other sons — Josh, Leif, and Key — had kept lower profiles than their older brother, quietly working as attorneys in private practice. Aside from the Los Angeles Times piece, they mostly kept out of the national spotlight, and only appeared occasionally in local media. From time to time, however, they make news. In 2003, then-Sen. John Ensign, a Nevada Republican who developed a warm relationship with Reid, placed Leif on a short list of recommendations for a federal judge position. Reid’s then-spokeswoman, Tessa Hafen, said, “This was entirely Senator Ensign’s decision.” Reid’s current press aides note that several Senate Republicans publicly endorsed Ensign’s decision, including former Judiciary Committee Chairman Sen. Orrin Hatch, who called Leif Reid a “very competent young man” who would make an “excellent judge.” In any event, President Bush decided against nominating Leif.

It would not be the last time a Reid son made news while pursuing legal work in the public sector. In 2011, Josh became interested in a position his father had once held, Henderson city attorney. But he did not meet the minimum requirements in an original job posting: 10 years of experience as a lawyer, plus five years “which must have been with a public agency.” Josh had just shy of 10 years’ experience and none with a public agency. The city attorney position pays about $199,000 per year, plus benefits — more than Harry Reid makes in the Senate — and could serve as a solid launch pad for a political career, as it did for Reid in the 1960s. (Josh has denied having any interest in pursuing elected office.)

Veteran Nevada political journalist Jon Ralston reported that Harry Reid made several calls to city officials on his son’s behalf. Henderson Mayor Andy Hafen, father of former Reid spokeswoman Tessa Hafen, said the senator told him that he “would find nobody more academically qualified than Josh.” Sen. Reid also called at least one city council member. (Earlier this month, Ralston wrote, “Reid has refused to talk to me for three years because of perceived slights against his children, including my exposing that he lobbied a local city council to help land his son Josh a city attorney’s post.”)

The city council altered the qualifications for the position, and Josh Reid met the new requirements. The city said it had modified them to widen the applicant pool. Among the six semi-finalists, he was the only one who had not met the original qualifications. The council voted unanimously to confirm him as city attorney in November 2011. One town resident at the council meeting called the move “disgusting.”
Read more: http://www.realclearpolitics.com/articles/2014/04/25/harry_reids_long_coattails_122414.html#ixzz30DyHHAPv
Follow us: @RCP_Articles on Twitter

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I would like to know the true story about Jerome Johnson and Harry Reid, Saloman Melgen Medicare Fraudster and Harry Reid..

and also …

Deborah Palfrey dubbed DC Madam – she was going to expose Harry Reid and Jack Abramoff and others in the Washington DC madam scandal and committed suicide by hanging herself – mentioned here: Airing Harry Reid’s Dirty Laundry and here

And ….”Senate Majority Leader Harry Reid (D., Nev.). Campaign finance records show that Melgen’s firm donated more than $700,000 to Majority PAC, a super PAC run by former Reid aides. The PAC spent most of that money helping Menendez win reelection in 2012.” http://freebeacon.com/blog/harry-reid-tied-to-medicare-fraudster/

Then there’s Ken Salazar…

Harry Reid had a net worth of $1 million when he went to Washington. The latest count estimates his net worth at 10 times that, if not more since much of his portfolio is in real estate.

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