So Senator Reid made some money off a fast and loose land deal in Las Vegas. I think his behavior was stupid and gives the appearance of unethicality (heh), but it's probably not that big of a deal.
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.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. ...
The complex dealings allowed Reid to transfer ownership, legal liability and some tax consequences to Brown's company without public knowledge, but still collect a seven-figure payoff nearly three years later. ...
The senator's aides said no money changed hands in 2001 and that Reid instead got an ownership stake in Brown's company equal to the value of his land. Reid continued to pay taxes on the land and didn't disclose the deal because he considered it a "technical transfer," they said.
Exactly like the "technical transfer" earlier this week when Google bought YouTube with stock. Ownership interest in one company was traded for assets held by another.
It seems clear that Senator Reid violated the Senate's ethics rules, but it doesn't seem that he did so with malicious intent. I think the Senate should censure him and that he should demonstrate his acceptance of responsibility by donating some of his profits to charity.
The unfortunate truth, however, is that the Republicans have no reason to be magnanimous. Democrats blow every Republican molehill up into a mountain no matter how much leeway Republicans give their indiscretions, so why shouldn't the right play by the same rules? Still, Republicans will get themselves in hot water if they try to draw parallels between this land deal and Mark Foley's perversion.
The fishiest part of the whole transaction is also probably the commonest and least likely to draw curiousity from Reid's fellow lawmakers: how did he make $1.1 million profit off a $400,000 property?
Clark County intended for the property Reid owned to be used solely for new housing, records show. Just days before Reid sold the parcels to Brown's company, Brown sought permission in May 2001 to rezone the properties so a shopping center could be built.Career zoning officials objected, saying the request was "inconsistent" with Clark County's master development plan. The town board in Spring Valley, where Reid's property was located, also voted 4-1 to reject the rezoning.
Brown persisted. The Clark County zoning board followed by the Clark County Commission voted to overrule the recommendation and approve commercial zoning. Such votes were common at the time.
Before the approval in September 2001, Brown's consultant told commissioners that Reid was involved. "Mr. Brown's partner is Harry Reid, so I think we have people in this community who you can trust to go forward and put a quality project before you," the consultant testified.
With the rezoning granted, Patrick Lane pursued the shopping center deal. On Jan. 20, 2004, the company sold the property to developers for $1.6 million. Today, a multimillion dollar retail complex sits on the land.
I expect it's incredibly common for politicians to use their name and position to get a business advantage. I'm not sure how to stop it, and I doubt the Senate will address this issue at all. After all, they're the ones with the investments that consistently beat the market by 12%.
