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Reid used campaign money for Christmas bonuses

John Solomon
Reid
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WASHINGTON (AP) – Senate Democratic leader Harry Reid has been using campaign donations instead of his personal money to pay Christmas bonuses for the support staff at the Ritz-Carlton where he lives in an upscale condominium.

Federal law bars candidates from converting political donations for personal use.

Questioned about the campaign expenditures by The Associated Press, Reid’s office said Monday his lawyers had approved them but he nonetheless was personally reimbursing his campaign for the $3,300 he had directed to the staff holiday fund at his residence.

Reid also announced he was amending his ethics reports to Congress to more fully account for a Las Vegas land deal, highlighted in an AP story last week, that allowed him to collect $1.1 million in 2004 for property he hadn’t personally owned in three years.

In that matter, the senator hadn’t disclosed to Congress that he first sold land to a friend’s limited liability company back in 2001 and took an ownership stake in the company. He collected the seven-figure payout when the company sold the land again in 2004 to others.

Reid portrayed the 2004 sale as a personal sale of land, not mentioning the company’s ownership or its role in the sale.

Reid said his amended ethics reports would list the 2001 sale and the company, called Patrick Lane LLC. He said the amended reports also would divulge two other smaller land deals he had failed to report to Congress.

“I directed my staff to file amended financial disclosure forms noting that in 2001, I transferred title to the land to a Limited Liability Corporation,” Reid said in a statement issued by his office.

He said he believed the 2001 sale did not alter his ownership of the land but that he agreed to file the amended reports because “I believe in ensuring all facts come to light.”

Reid labeled the AP story as the “latest attempt” by Republicans to affect the election. AP reported last week that it learned of the land deal from a former Reid adviser who had concerns about the way the deal was reported to Congress.

On the Ritz-Carlton holiday donations, Reid gave $600 in 2002, then $1,200 in 2004 and $1,500 in 2005 from his re-election campaign to an entity listed as the REC Employee Holiday Fund. His campaign listed the expenses as campaign “salary” for two of the years and as a “contribution” one year.

Reid’s office said the listing as salary was a “clerical error” and that the use of campaign money for the residential fund was approved by his lawyers. “I am reimbursing the campaign from my own pocket to prevent this issue from being used in the current campaign season to deflect attention from Republican failures,” he said.

Residents and workers at the Ritz said the fund’s full name is the Residents Executive Committee Holiday Fund and that it collects money each year from the condominium residents to help provide Christmas gifts, bonuses and a party for the support staff.

Federal election law permits campaigns to provide “gifts of nominal value” but prohibits candidates from using political donations for personal expenses, such as mortgage, rent or utilities for “any part of any personal residence.”

The law specifically defines prohibited personal use expenses as any “obligation or expense of any person that would exist irrespective of the candidate’s campaign or duties as a federal officeholder.”

Land deeds show Reid and his wife, Landra, purchased a condominium for their Washington residence at the hotel for $750,000 in March 2001. The holiday fund has existed for years at the condo, workers said.

Reid said Monday he believed the expenses were permissible but he nonetheless was reimbursing the campaign.

“These donations were made to thank the men and women who work in the building for the extra work they do as a result of my political activities, and for helping the security officers assigned to me because of my Senate position,” Reid said.

Larry Noble, the Federal Election Commission’s former chief enforcement lawyer, said Reid’s explanation is aimed at a “gray area” in the law by suggesting the donations were tied to his official Senate and political work.

“What makes this harder for the senator is that this is his personal residence and this looks like an event that everybody else at the residence is taking out of their personal money as they’re living there,” Noble said.

Back in 2000, Congress rebuked powerful House Transportation Committee Chairman Bud Shuster, R-Pa., for among other things creating the appearance, through poor record-keeping, that campaign committee expenditures were for personal rather than bona fide campaign uses.

On the land dealings, Reid announced Monday he had failed to disclose two other transactions on his prior ethics reports and would account for those on his amended reports along with the 2001 sale.

The first, he said, involved the sale in 2004 of about one-third acre of land in 2004 he owned in his hometown of Searchlight, Nev. And he said he had not reported his ownership since 1985 of a quarter acre of land his brother gave him in 1985.

Reid said the failure to disclose those transactions previously was due to “clerical errors” and they amounted to “two minor matters that were inadvertently left off my original disclosure forms.”

He had asked the Senate Ethics Committee last Wednesday for an opinion on the 2001 land sale but decided to amend his forms prior to the committee acting.

Reid’s announcement came after numerous newspapers nationwide published editorials criticizing both his initial failure to disclose the full details of his Las Vegas land deal and his response to AP’s story.

The $1.1 million land 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 other prior organized crime investigations. Brown has never been charged with wrongdoing, except for a 1981 federal securities complaint that was settled out of court.

Ethics experts told AP that Reid’s inaccurate accounting of the deal to Congress appeared to violate Senate ethics rules and raised other issues concerning taxes and potential gifts.


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