Sen. Paul Laxalt (R-Nev.) has been financing his libel lawsuit against The Sacramento Bee with a fund made up of gifts of as much as $5,000 each from "close family friends," including brewery magnate Joseph Coors, former secretary of state Alexander M. Haig Jr. and cosmetics executive Estee Lauder.
The trust fund was set up by Laxalt's daughter, Michelle, at the end of 1984, and it collected $263,670 last year to pay for his lawyers. The fund, which has reported its donors and expenditures to the secretary of the Senate, is set up in such a way that donations are considered gifts, not campaign contributions, and they are tax-free to Laxalt.
On Sept. 21, 1984, Laxalt, who is general chairman of the Republican Party and was then guiding his friend Ronald Reagan toward a landslide reelection victory, filed a libel and defamation lawsuit against the McClatchy Newspapers group, which publishes the Sacramento, Fresno and Modesto Bees, because of a 1983 story that began:
"Substantial sums of money were illegally skimmed from the proceeds of Carson City's Ormsby House Hotel Casino during the time it was owned by Paul Laxalt, now the powerful U.S. senator from Nevada and head of President Reagan's reelection campaign, according to federal tax agents who gathered the evidence 10 years ago."
The lengthy article said Laxalt had associated, particularly in arranging the hotel venture, with businessmen reportedly linked to the underworld. But it did not charge that Laxalt had broken any law or claim that he was aware of the illegal skimming operation.
The Sacramento Bee stood behind the story, and other news organizations, including CBS and ABC, appeared interested in pursuing the charges late in the 1984 campaign. But Laxalt sued the McClatchy newspapers group and indicated that anyone else who pursued the charges might end up in court.
Michelle Laxalt, a Washington consultant, said in an interview that the decision to start the fund was made because her father could not afford to finance the lawsuit.
"Put real simply, Paul Laxalt has devoted most of his adult life to public service and has not collected any wealth," she said. "We researched the only vehicle we could to finance the funding of the case . . . and we had a lot of friends from all over the country who had indicated they wanted to help."
Senate financial disclosure records show that Laxalt, who has announced he will not run for reelection, earned $132,183 in 1984 from speaking fees and his salaries from the Senate and the Republican National Committee. In 1983 he earned $142,081 from his Senate salary and speaking fees.
Although defense funds for public figures are not uncommon, Jane Kirtley, executive director of the Reporters Committee for Freedom of the Press, said she knows of no precedent of a current public official raising money to pay for bringing a libel suit.
Michelle Laxalt said that in early 1985, a letter was sent by Sen. Barry Goldwater (R-Ariz.) "to under 100 of dad's closest personal friends" asking for financial help. Since then, she said, contributions have come in from other friends who have heard of Laxalt's plight.
Las Vegas lawyer Joseph Brown, who contributed $5,000, said he met then-governor Laxalt in 1968, and the two have been close friends since then.
"Good people have to be in politics for the good of this country," Brown said. "That's why I contributed. Some unfair, down-and-dirty article can be printed about them, and they're defenseless. Most people don't have the resources to fight something like that."
When funds get low, Michelle Laxalt said, she calls family friends to ask for more. By the end of last year, all but $2,921.16 had been spent, most of it on law firms in California, New York, Washington and Reno, Nev.
Denny Walsh, the Sacramento Bee reporter who wrote the story, said the case, which is in the discovery stage, is not expected to go to trial before next fall.
Michelle Laxalt said that gifts of up to $5,000 are being accepted from close family friends and are not considered political contributions. Under federal tax laws, such a gift is not taxable to the recipient, provided it is truly a gift and does not require anything in return.
According to the Senate Ethics Committee, senators may freely accept cash gifts as long as they are reported in annual financial disclosures.
According to Michelle Laxalt, most of the money raised last year has been spent, and those who contributed last year may be asked to give again in 1986.
Contributors, most of them active in Republican politics, include:
Merv Adelson and Irwin Molasky, executives of Rancho La Costa resort in southern California, $5,000 apiece; Delbert Coleman, Chicago financier, $5,000, and his son and daughter, $10,000; Philip Anschutz, Denver oil executive and art collector, $5,000; Connie Armitage, Spartanburg, S.C., former president, National Federation of Republican Women, $500; Gen. Charles Baron, Las Vegas, $500; John W. Berry, Dayton, Ohio, business executive, $1,000; Mr. and Mrs. Ivan Boesky, New York securities executive, $5,000 each; Samuel A. Boyd, Las Vegas, $2,500; William S. Boyd, Las Vegas, $2,500; Joseph and Pamela Brown, Las Vegas lawyer, $5,000; Randall and Annette Capurro, Las Vegas, $2,000; Donald P. Carano, Eldorado Hotel, Reno, $5,000; James Cashman, Las Vegas, $5,000; Melvin D. Close Jr., Las Vegas lawyer, $1,000; Robert Cohen, Las Vegas, $5,000; Roy M. Cohn, New York lawyer and onetime counsel to the late senator Joseph R. McCarthy, $5,000; Mr. and Mrs. Neil Coleman, Chicago, $5,000 each; Charles E. Cook, City of Industry, Calif., $5,000; Mr. and Mrs. Joseph Coors, Golden, Colo., brewery executive, $5,000; Mr. and Mrs. Trammel Crow, Dallas developer, $5,000; Mr. and Mrs. Leo A. Daly, Washington, D.C., architect, $2,000; Perry M. DiLoreto, Reno, $5,000; Jack J. Dreyfus Jr., New York, Wall Street financier, $5,000; Bernard Epton, Chicago, unsuccessful mayoral candidate, $4,000; Max Fisher, Detroit industrialist, $5,000.
John Flanigan, Reno, $3,000; Larry D. Fleming, Wichita, Kan., $5,000; Michael Gaughan, Las Vegas, $5,000; Gary and Jodi Goodheart, Las Vegas lawyer, $1,000; former secretary of state Alexander M. Haig and his wife, Patricia, McLean, Va., $1,000; Kirk R. Harrison, Las Vegas lawyer, $1,000; Martin Hecht, Cape Girardeau, Mo., $1,000; Robert L. or Pauline Helms, Reno, $5,000; Herbert M. Jones, Las Vegas lawyer, $1,000; Will Kemp, Las Vegas lawyer, $1,000; George Klein, New York, $5,000; Jane Elisa Koubek, Washington, D.C., $5,000, Mr. and Mrs. Vlastimil Koubek, Washington, D.C., architect, $5,000 each; Bernard J. Lasker, New York stockbroker, $5,000; Estee Lauder, New York cosmetics executive, $500; Jackalyn R. Laxalt, Reno, the senator's ex-wife, $1,000; John Paul Laxalt, Carson City, Nev., the senator's son, $500; Michelle D. Laxalt, Alexandria, Va., the senator's daughter, $5,000; Ed Lerman, El Paso, $800; Joseph R. Loring, New York, $5,000; Joel Lubritz, Las Vegas, $1,000; Jerome D. Mack, Las Vegas banker, $5,000; Joseph E. Matthews, Sun Valley, Nev., $500; Dr. and Mrs. Leon Meisel, Beachwood, Ohio, $5,000 each.
Roger S. Milliken, Spartanburg, S.C., textile executive, $5,000; Larry Mizel, Denver, $5,000; W.A. Moncrief, Fort Worth oil executive, $5,000; Robert Mosbacher, Houston oil executive and Republican fund-raiser, $1,000; Robert G. Nelson, San Francisco, $500; Warren Nelson, Reno, $5,000; Ed Noble, Arlington, Va., former chairman of Synthetic Fuels Corp., $1000; Mr. and Mrs. William Oberndorf, San Francisco, $5,000 each; Thomas Parry, Las Vegas, $5,000; Sig Rogich, Las Vegas advertising executive, $5,000; Lewis Rudin, New York, $1,000; Henry Salvatori, Los Angeles oil executive, $5,000; Frank E. Scott, Las Vegas, $2,500; Donald C. Trump, New York builder, $1,000; Fred C. Trump, New York, $1,000; Holmes Tuttle, Santa Barbara, member of Reagan's "kitchen cabinet," $5,000; George Van Tobel, Las Vegas hardware store owner, $1,000; James L. Wadhams, Las Vegas lawyer, $1,000; Thomas Wiesner, Las Vegas, $2,000; Claudine Williams, Las Vegas, $2,500; Marguerite Williams, Thomasville, Ga., $5,000; Philip Winn, Englewood, Colo., real estate developer, $500.