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A History Of Running Afoul

- April 23, 2014

For A Senator Who Once Chaired The Ethics Committee, Harry Reid Can Never Seem To Escape Ethical Questions

SENATE MAJORITY LEADER HARRY REID PAID HIS GRANDDAUGHTER TENS OF THOUSANDS OF DOLLARS FOR CAMPAIGN TRINKETS

According To New Reports, Harry Reid's Campaign Paid His Granddaughter More Than $31,000 - Up From A Previous Total Of Nearly $17,000. "After additional reporting found that Harry Reid's campaign paid his granddaughter's company approximately $31,000 for jewelry, the Senate majority leader said he will repay the full sum, but he pushed back against journalists probing into his family's affairs." (Adam O'Neal, "Reid To Reimburse Campaign $31K Paid To Kin For Gifts," Real Clear Politics, 3/27/14)

  • FEC Rules State That Gifts Bought From Family Members Must Be Of "Nominal Value." "Federal rules actually do allow for candidates to buy things from family members, provided they pay fair market value for the items. In the case of the gifts, though, that value also matters. FEC rules state that such gifts must be of 'nominal value.' The total amount that Reid's campaign spent on the gifts from his granddaughter's jewelry company - Ryan Elisabeth - was $16,786. Reid's granddaughter is Ryan Elisabeth Reid." (Aaron Blake, "Reid Will Reimburse Campaign After Inquiry About Gifts Purchased From Granddaughter," The Washington Post, 3/25/14)

"The Expenditure Was Brought To Light This Week When The FEC Sent Reid's Campaign A Letter Saying Its Description Of The Purchase - 'Holiday Gifts'- Doesn't Meet The Commission's Criteria." (Aaron Blake, "Reid Will Reimburse Campaign After Inquiry About Gifts Purchased From Granddaughter," The Washington Post, 3/25/14)

  • "Paul Ryan, An Election Lawyer At The Campaign Legal Center, Said 'You'd Need To Buy A Heck Of A Lot Of Gifts Of 'Nominal' Value To Spend $16,000.'" (Aaron Blake, "Reid Will Reimburse Campaign After Inquiry About Gifts Purchased From Granddaughter," The Washington Post, 3/25/14)

Reid Announced He Would Reimburse His Campaign For The Money Directed To His Granddaughter Only "After Questions Were Raised" About The Gifts. "Senate Majority Leader Harry Reid (D-Nev.) will reimburse his campaign more than $16,000 after questions were raised about holiday gifts purchased from a company owned by his granddaughter. Reid said in a statement Tuesday that he will refund the money, after the Federal Election Commission questioned him about the expense earlier this week." (Aaron Blake and Paul Kane, "Reid Will Reimburse Campaign After Inquiry About Gifts Purchased From Granddaughter," The Washington Post , 3/25/14)

After Hurriedly Reimbursing His Campaign, Reid Maintained That It "Was Not An Admission Of Wrongdoing." "Senate Majority Leader Harry Reid, asked about the controversy over his campaign paying his granddaughter nearly $17,000, said his decision soon after the story broke to reimburse his campaign was not an admission of wrongdoing." (Jon Ralston, "Reid The Elder Dismisses Gifts Controversy At Presser; And Reid The Younger Defends Daughter/Dad," Ralston Reports, 3/26/14)

DESPITE HAVING A CLOSE FRIENDSHIP GOING BACK DECADES WITH A CONVICTED FELON, REID CLAIMS HE WAS UNAWARE OF ANY CAMPAIGN WRONGDOINGS

In May 2013, Harvey Whittemore, A Powerful Nevada Lobbyist Was Convicted Of Giving Senator Reid Illegal Campaign Contributions. "A Nevada powerbroker who headed a billion-dollar real estate company and pulled the strings of state politics as a prominent lobbyist for more than a decade was convicted Wednesday of making illegal campaign contributions to U.S. Sen. Harry Reid. Harvey Whittemore, 59, could face up to 15 years in prison and hundreds of thousands of dollars in fines after a federal jury returned guilty verdicts on three counts tied to nearly $150,000 illegally funneled to Reid's re-election campaign in 2007." ("Harvey Whittemore, Former Nevada Powerbroker, Guilty In Contribution Case," The Associated Press, 5/29/13)

  • Prosecutors Alleged That Whittemore Funneled Contributions Promised To Reid Through Family Members And Employees. "Prosecutors said Whittemore gave money to family members and employees in 2007 to make contributions he had promised to Reid while concealing himself as the true source to skirt campaign finance laws." ("Harvey Whittemore, Former Nevada Powerbroker, Guilty In Contribution Case," The Associated Press, 5/29/13)

Harvey Whittemore: "You Have To Understand How Close The Whittemore And Reid Families Are … My Relationship With Sen. Reid Goes Back Decades." "'You have to understand how close the Whittemore and Reid families are,' the developer said recently. 'My relationship with Sen. Reid goes back decades.' The senator concurs, calling Whittemore a longtime friend." (Chuck Neubauer and Richard T. Cooper, "Desert Connections," Los Angeles Times, 8/20/06)

  • Whittemore Had Previously Hired Sen. Reid's Son, Leif Reid, As His Personal Lawyer. "Whittemore also helped advance the legal careers of two of Reid's four sons. One of the two, Leif Reid, who is Whittemore's personal lawyer, has represented the developer throughout the Coyote Springs project, including in negotiations with federal officials." (Chuck Neubauer and Richard T. Cooper, "Desert Connections," Los Angeles Times, 8/20/06)

Despite His Close Relationship With Wittemore, Reid Maintains He Was Unaware Of The Problems. "Reid was not accused of any wrongdoing. He has said he was unaware of any potential problems with the money he received. 'I received $25 million. He raised $150,000,' Reid told the Las Vegas Sun earlier this week. 'I had money coming in from other places.'" ("Harvey Whittemore, Former Nevada Powerbroker, Guilty In Contribution Case," The Associated Press, 5/29/13)

AS REID NETTED A SEVEN FIGURE PAYOFF IN A LAND SALE, ETHICS RULES WERE IGNORED

"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." (John Solomon and Kathleen Hennessey, "Reid Got $1 Million For Land He Hadn't Owned For 3 Years," The Associated Press, 10/11/06)

  • The Complex Real Estate Deal Nearly Tripled Reid's Investment. "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." (John Solomon and Kathleen Hennessey, "Reid Got $1 Million For Land He Hadn't Owned For 3 Years," The Associated Press, 10/11/06)
  • The Deal Was Brokered By Longtime Friend Jay Brown, Who Had Been Mentioned In Organized Crime Investigations. "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." (John Solomon and Kathleen Hennessey, "Reid Got $1 Million For Land He Hadn't Owned For 3 Years," The Associated Press, 10/11/06)

Reid Failed To Disclose The Transaction For 3 Years, Putting Himself At Odds With Senate Ethics Rules. "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." (John Solomon and Kathleen Hennessey, "Reid Got $1 Million For Land He Hadn't Owned For 3 Years," The Associated Press, 10/11/06)

  • "Senate Ethics Rules Require Lawmakers To Disclose On Their Annual Ethics Report All Transactions Involving Investment Properties …" "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." (John Solomon and Kathleen Hennessey, "Reid Got $1 Million For Land He Hadn't Owned For 3 Years," The Associated Press, 10/11/06)

In Addition, Some Of Reid's Property Holdings Went Unreported For 20 Years

In 2006, Reid Disclosed He Had Failed To Report Two Property Transactions, Including A Quarter Acre Of Land That He Had Owned Since 1985. "On the land dealings, Reid announced Monday he had failed to disclose two other transactions on his prior ethics reports and would account for those on his amended reports along with the 2001 sale. The first, he said, involved the 2004 sale of about one-third acre of land he owned in his hometown of Searchlight, Nev. And he said he had not reported his ownership since 1985 of a quarter acre of land his brother gave him in 1985." (John Solomon, "Reid Used Campaign Money For Christmas Bonuses At Personal Condo," The Associated Press, 10/17/06)

REID VIOLATED CAMPAIGN FINANCE RULES BY USING CAMPAIGN FUNDS AS BONUSES AT THE RITZ CARLTON

In 2006, Reid Illegally Used Political Campaign Contributions To Give Christmas Bonuses To Staff At The Ritz-Carlton. "Senate Democratic leader Harry Reid paid cash for a $750,000 condo at the Ritz-Carlton where he lives. But when he gave Christmas bonuses to the doorman and other support staff, he used campaign donations instead of his own money. Federal election law bars candidates from converting political donations for personal use." (John Solomon, "Reid Used Campaign Money For Christmas Bonuses At Personal Condo," The Associated Press, 10/17/06)

  • In Federal Election Commission Documents, Reid Mischaracterized The Holiday Bonuses As "Salary" And A "Contribution." "On the Ritz-Carlton holiday donations, Reid gave $600 in 2002, then $1,200 in 2004 and $1,500 in 2005 from his re-election campaign to an entity listed as the REC Employee Holiday Fund. His campaign listed the expenses as campaign 'salary' for two of the years and as a 'contribution' one year." (John Solomon, "Reid Used Campaign Money For Christmas Bonuses At Personal Condo," The Associated Press, 10/17/06)

Federal Election Law "Specifically" Prohibits Candidates From Using Campaign Contributions For Normal Life Expenses. "Federal election law permits campaigns to provide 'gifts of nominal value' but prohibits candidates from using political donations for personal expenses, such as mortgage, rent or utilities for 'any part of any personal residence.' The law specifically defines prohibited personal use expenses as any 'obligation or expense of any person that would exist irrespective of the candidate's campaign or duties as a federal officeholder.'" (John Solomon, "Reid Used Campaign Money For Christmas Bonuses At Personal Condo," The Associated Press, 10/17/06)

"[R]eid Opted To Personally Reimburse The Money To His Campaign In October 2006, After The Press Reported On It, And The FEC Dismissed The Complaint In February 2007." (Aaron Blake, "Reid Will Reimburse Campaign After Inquiry About Gifts Purchased From Granddaughter," The Washington Post, 3/25/14)


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