A controversial Nevada lobbyist turned developer, accused in June of making illegal campaign donations to Senate Majority Leader Harry Reid, gave an unusual deal to the senator's son, Leif, on an $850,000 house his company built for him on land the younger Mr. Reid owned in Reno.
F. Harvey Whittemore, indicted June 6 on federal charges of giving $138,000 in illegal campaign contributions to Mr. Reid, billed his company, Wingfield Nevada Group, for the costs of a contractor and architect during a yearlong house construction project and then gave the senator's son three months after the house was completed to come up with the money, records show. Leif Reid did not secure the $850,000 debt with a recorded mortgage in favor of Mr. Whittemore's company until the job was completed and a certificate of occupancy was issued.
Normally, a developer insists on being paid as construction costs are incurred and the landowner either has to use his savings or obtain a construction loan backed by a mortgage on the property to make the payments, real estate analysts said.
"There is no question it is favorable treatment. No one gets a favor like that," said Charles R. Lewis, founder of the Center for Public Integrity, a nonpartisan watchdog group, and a journalism professor at American University.
Mr. Reid, Nevada Democrat, had gone to bat for a plan by Mr. Whittemore to develop a new city, Coyote Springs, 60 miles northeast of Las Vegas — a dream that crashed during the economic downturn.
A civil lawsuit filed in June by Wingfield Nevada partners Thomas Seeno and Albert Seeno Jr. said Mr. Whittemore acknowledged in an email he did not timely collect the balance on the construction contract on the Leif Reid house. It and an earlier suit they filed in January accuses the developer of embezzling and misappropriating millions of dollars in company funds for his personal use — an allegation Mr. Whittemore has denied.
Dominic Gentile, Mr. Whittemore's attorney, declined to discuss the house deal, telling a reporter to look at Wingfield Nevada records to find out if the younger Mr. Reid made payments before the house was finished. "The answer to your question lies in the records of the company," he said. "Mr. Whittemore has attempted to get those records for over a year. The company has refused to produce them."
Leif Reid did not respond to recent phone messages and emails requesting comment. In February, he told The Washington Times that Wingfield Nevada had built his home, and that afterward there was a mortgage or lien on the property to secure his obligation to pay the firm for the house. "It was not a loan," he said. "The deed of trust was reconveyed when my mortgage closed in April 2007."
Records show Leif Reid, who as an attorney represented both Mr. Whittemore and his company, bought a 2.5-acre parcel of land south of Reno for $120,000 in May 2005. Later that year, he applied for a building permit to construct a five-bedroom house. The permit was issued in January 2006, and the county issued a certificate of occupancy Dec. 14, 2006.
The records show that Leif Reid gave Mr. Whittemore's company a mortgage or deed of trust to secure his debt until March 7, 2007, nearly three months after the construction was finished. Mr. Reid and his wife, Amber, obtained an $800,000 mortgage loan April 17, 2007, from a bank he said was then used to pay Wingfield Nevada for the work.
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