- The Washington Times - Wednesday, October 11, 2006

Senate Minority 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.

In the process, Mr. 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.

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 previous organized-crime investigations. He has never been charged with wrongdoing — except for a 1981 federal securities complaint that was settled out of court.

Land deeds obtained by the Associated Press during a review of Mr. Reid’s business dealings show:

• In 1998, Mr. Reid bought undeveloped residential property on Las Vegas’ booming outskirts for about $400,000. Mr. Reid bought one lot outright, and a second parcel jointly with Mr. Brown. One of the sellers was a developer who was benefiting from a government land swap that Mr. Reid supported. The seller never talked to Mr. Reid.

• In 2001, Mr. Reid sold the land for the same price to a limited liability corporation created by Mr. Brown. The senator didn’t disclose the sale on his annual public ethics report or tell Congress he had a stake in Mr. Brown’s company. He continued to report to Congress that he personally owned the land.

• After getting local officials to rezone the property for a shopping center, Mr. Brown’s company sold the land in 2004 to other developers, and Mr. Reid took $1.1 million of the proceeds, nearly tripling the senator’s investment. Mr. Reid reported it to Congress as a personal land sale.

The complex dealings allowed Mr. Reid to transfer ownership, legal liability and some tax consequences to Mr. Brown’s company without public knowledge, but still collect a seven-figure payoff nearly three years later.

Mr. Reid hung up the phone when questioned about the deal during an AP interview last week.

In a press conference yesterday in Las Vegas, the senator said he thought he had done nothing wrong but was willing to change his ethics report’s account of the sale if the Senate Select Committee on Ethics ordered him to do so.

“Everything I did was transparent,” Mr. Reid said. “I paid all the taxes. Everything is fully disclosed to the ethics committee and everyone else. As I said, if there is some technical change that the ethics committee wants, I’ll be happy to do that.”

The senator’s aides said that no money changed hands in 2001 and that Mr. Reid instead got an ownership stake in Brown’s company equal to the value of his land. Mr. Reid continued to pay taxes on the land and didn’t disclose the deal because he considered it a “technical transfer,” they said.

They also said they have no documents proving Mr. Reid’s stake in the company because it was an informal understanding between friends.

The 1998 purchase “was a normal business transaction at market prices,” Reid spokesman Jim Manley said. “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.”

Senate ethics rules require lawmakers to disclose in their annual ethics report all transactions involving investment properties — regardless of profit or loss — and to report any ownership stake in companies.

Kent Cooper, who oversaw government disclosure reports for federal candidates for two decades in the Federal Election Commission, said Mr. Reid’s failure to report the 2001 sale and his ties to Mr. Brown’s company violated Senate rules.

“This is very, very clear,” Mr. Cooper said. “Whether you make a profit or a loss, you’ve got to put that transaction down so the public, voters, can see exactly what kind of money is moving to or from a member of Congress.”

“It is especially disconcerting when you have a member of the leadership, of either party, not putting in the effort to make sure this is a complete and accurate report,” Mr. Cooper said.

Other parts of the deal — such as the informal handling of property taxes — raise questions about gifts or income reportable to Congress and the Internal Revenue Service, analysts said.

Stanley Brand, former Democratic chief counsel to the House, said that Mr. Reid should have disclosed the 2001 sale and that his omission fits a larger culture in Congress, where lawmakers aren’t following or enforcing their own rules.

“It’s like everything else we’ve seen in last two years. If it is not enforced, people think it’s not enforced, and they get lax and sloppy,” Mr. Brand said.

Mr. Reid and his wife, Landra, personally signed the deeds selling their full interest in the property to Mr. Brown’s company, Patrick Lane LLC, for $400,000, records show.

Despite the sale, Mr. Reid continued to report on his public ethics reports that he personally owned the land until it was sold again in 2004. His disclosure forms to Congress do not mention an interest in Patrick Lane or the company’s role in the 2004 sale.

AP first learned of the transaction from a former Reid aide who expressed concern that the deal hadn’t been properly reported.

Mr. Reid isn’t listed anywhere on Patrick Lane’s corporate filings with Nevada, even though the land he sold accounted for three-quarters of the company’s assets. Mr. Reid’s office said Nevada law didn’t require Mr. Reid to be mentioned in the filings.

“We have been friends for over 35 years. We didn’t need a written agreement between us,” Mr. Brown said.

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