Friday, October 13, 2006
THE BEST CASE for Senate Minority Leader Harry M. Reid (D-Nev.) is that he was sloppy about financial disclosure rules in accounting for a real estate deal on which he made a $700,000 profit. The more unattractive case is that the senator's inaccurate description of the investment was an effort to disguise his partnership with a Las Vegas lawyer who's never been charged with wrongdoing but whose name has surfaced in federal investigations involving organized crime, casinos and political bribery since the 1980s. As of now, the evidence points toward sloppiness; Mr. Reid's friendship with Jay Brown isn't exactly a secret in the state. But either way, an Associated Press report about Mr. Reid's dealings doesn't cast the senator in an attractive light. Neither does his response to the AP story, which indicates a casual disregard for the importance of accurate reporting of lawmakers' financial affairs.
Mr. Reid bought undeveloped property on the outskirts of fast-growing Las Vegas for about $400,000 in 1998 -- one parcel outright and a second jointly with Mr. Brown. In 2001, Mr. Reid sold the land for the same price to a corporation he co-owned with Mr. Brown, who in the meantime was getting the land rezoned from residential to commercial use. But the senator didn't report the sale on his annual financial disclosure form. When the new company sold the land to developers in 2004, yielding $1.1 million for Mr. Reid, the senator did not accurately list the transaction or go back and fix the previous forms to reflect the new arrangement.
"Everything I did was transparent," Mr. Reid said at a news conference Wednesday, after the story broke. "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."
Mr. Reid's professions of transparency and full disclosure are transparently wrong. His investment was not reported in a manner that made clear his partnership with Mr. Brown. It's true -- under the inadequate financial disclosure rules -- that even if Mr. Reid had listed the newly formed corporation, Patrick Lane LLC, that wouldn't have by itself demonstrated Mr. Brown's involvement. Nonetheless, that Mr. Reid no longer owned the land, but instead had sold it for an interest in the Patrick Lane corporation, was not some mere "technical change," as the senator would like to brush it off. It's an essential element of financial disclosure rules, the purpose of which is to know how and with whom public officials are financially entwined.