Sen. Harry Reid, D-Nev., the Senate majority leader
NEW YORK – At the center of a Nevada “good old boys” network of movers and shakers through which Senate Majority Leader Harry Reid, D-Nev., and his family have profited for decades is the Las Vegas-based law firm Lionel Sawyer & Collins.
Some have questioned how Reid, who arrived in Washington in 1983 with a net worth estimated at $1 million, has managed to amass a net worth estimated recently to have peaked at $10 million. He receives as Senate majority leader a top Senate salary set at an annual base of $193,400.
Researching Reid’s relationship with Lionel Sawyer & Collins, WND found a trail of scandals and corruption that trace back decades, surfacing again recently in the Bureau of Land Management standoff with Nevada rancher Cliven Bundy. As WND reported, Reid had championed a proposal by a Chinese energy corporation to fund and own a massive $5 billion solar energy project in Nevada utilizing land currently used to graze cattle.
Nevada law firm hired four Harry Reid sons
The Los Angeles Times reported in 2003 that four of Reid’s sons – Rory, then age 40; Leif, 35; Josh, 31; and Key, 28 – all worked for Lionel Sawyer & Collins.
The law firm’s website currently lists Reid’s son Rory J. Reid as a full partner and “a shareholder at Lionel Sawyer & Collins.”
The article, titled “In Nevada, the Name to Know is Reid,” pointed out that a supposedly bipartisan law designed to protect the environment and create Nevada jobs was found by the newspaper to have benefited real estate developers, corporations and local institutions that had paid hundreds of thousands of dollars in lobbying fees to Lionel Sawyer & Collins as well as to Washington-based lobbying firm where Reid’s son-in-law Steven Barringer worked.
Reporting that Harry Reid is “in a class by himself,” the newspaper said that in the previous four years, firms connected with his son-in-law and four sons, including Lionel Sawyer & Collins, had collected more than $2 million “in lobbying fees from special interests that were represented by the kids and helped by the senator in Washington.”
The newspaper concluded: “So pervasive are the ties among Reid, members of his family and Nevada’s leading industries and institutions that it’s difficult to find a significant field in which such a relationship does not exist.”
At the center of the 2002 scandal that prompted the Los Angeles Times coverage was a payment by the Howard Hughes Corp. of $300,000 to Barringer’s Washington-based consulting firm “to push a provision allowing [Hughes Corp.] to acquire 998 acres of federal land ripe for development in the exploding Las Vegas metropolitan area.”
Reid recruited Rep. Shelley Berkley, D-Nev., to join him in calling then-House Minority Leader Richard Gephardt to allow the bill to go through.
The bill to allow the Hughes Corp. to purchase the federal land in Las Vegas passed the House late on Oct. 16, 2002, without a vote. The next evening, Reid championed the bill through the Senate just before the Senate adjourned for a lame duck session.
The China connection
On April 12, WND reported Rory Reid had been appointed the primary representative for EEN Energy Group, a Chinese company fronting for Chinese government interests that had recruited Sen. Reid’s support to build a $5 billion solar panel plant on a 9,000-acre Clark County desert plot in Laughton, Nevada.
On April 3, 2012, Bloomberg News reported that Rory Reid and former Gov. Richard Bryan both worked on the ENN Energy Group project while whey were still attorneys at the Lionel Sawyer & Collins firm, according to Clark County Commissioner Steve Sisolak and documents obtained by Bloomberg.
In the same story, Bloomberg also reported Lionel Sawyer & Collins gave $40,650 individually and through its political action committee to Sen. Reid over the previous three election cycles. Lionel Sawyer & Collins’ political action committee contributed $2,000 in 2010 and $5,000 in 2008 to the Searchlight Leadership Fund, a political action committee that listed Reid as an affiliate.
On April 17, WND reported Reid’s efforts to convert an increasingly large share of Nevada’s public land to renewable-energy projects while systematically closing coal-fueled power plants in the state. It turned out that the federal land on which Cliven Bundy grazed his cattle was needed as a “mitigation area” to move endangered species that were threatened by the Reid-sponsored solar energy projects.
WND reported ENN Group canceled the solar power project after NV Energy informed the company that with 39 producing renewable energy projects currently in operation, an additional project under construction and another in the development phase, ENN Group could easily meet state law requirements to utilize renewable energy sources without the solar power facility the ENN Group had proposed to build.
Reid’s Asian connections in casino deal
In 2013, an international controversy developed when Sen. Reid took a strong interest in pushing the Department of Homeland Security to grant visas to some two dozen Asian investors seeking to renovate the property that was once the Sahara Hotel and Casino in Las Vegas into the SLS hotel and casino project, represented by Reid’s son Rory Reid, acting in his capacity as a Lionel Sawyer & Collins attorney.
In December 2013, the Washington Times reported the Obama administration overruled career DHS officials to expedite the visa applications for the Asian investors after Sen. Reid and his staff intervened.
According to documents obtained by the Washington Times, the pressure exerted by Reid’s Senate staff in Washington was so intense that an official of the U.S. Citizenship and Immigration Services, USCIS, reported it prompted a phone shouting match, politically charging a normally bureaucratic review process conducted internally within DHS.
“This is going to be a major headache for us all because Sen. Reid’s office/staff is pushing hard and I just had a long yelling match on the phone,” USCIS Legislative Affairs official Miguel “Mike” Rodriquez warned in a memo written to DHS officials Dec. 5, 2012.
DHS reacted negatively to the Asian investors organized under the federal government’s EB-5 investor program that allows foreign nationals to obtain preference obtaining U.S. visas in return for large financial investments made in the United States.
Evidently, Sen. Reid reached out personally to telephone the top official at USCIS, Alejandro “Ali” Mayorkas. Reid urged him to set in motion a DHS and Department of Commerce process that would result in allowing the Asian nationals seeking to invest in the SLS Hotel to jump to the front of the EB-5 line, bypassing an internal EB-5 review process that considered the Asian foreign investors “suspicious” for undisclosed reasons.
The Washington Post reported that Reid’s Washington staff repeatedly made the case to federal bureaucrats that the SLS Hotel would lose its proposed funding for its renovation if USCIS failed to expedite the visas.
“As you can imagine, this property is pretty important to Southern Nevada,” the newspaper reported Michael Vannozzi, then a top aide to Reid, wrote to DHS officials to apply pressure. “It will probably be the only ‘new’ property opening up on the Strip for some time, and if their $300 million senior lending facility from JP Morgan Chase expires because these visas aren’t processed expeditiously, it will be a huge setback for the project and the 8,600 jobs associated with it.”
The Washington Times reported that within a few weeks of Reid’s personal intervention, the USCIS processed the EB-5 visas, allowing the SLS Hotel to obtain the major funding offered by JP Morgan Chase.
The newspaper reported the force behind the SLS Hotel renovation project was Sam Nazarian, the Iranian-American founder and CEO of SBE Entertainment. Nazarian previously was known for owning and operating several prominent Los Angeles nightclubs and lounges that had acquired the Sahara in 2007.
Nazarian disclosed to the Washington Times the money raised through the EB-5 financing was “far above” the $115 million in EB-5 capital the SLS Hotel renovation project required to proceed.
While the SLS Hotel controversy was developing, the DailyCaller.com reported Dec. 12, 2013, that a 2012 “Year in Review” piece published by the Lionel Sawyer & Collins website promoted the benefit of working with Rory Reid on the SLS Hotel deal.
“When Sam Nazarian, one of the most creative entrepreneurs in the hospitality industry, turned his sights on Las Vegas, he recognized the opportunity to revitalize a former Strip iconic property into a new exciting resort and the benefit of working with Rory Reid of Lionel Sawyer & Collins,” the law firm’s 2012 year review boasted.
“Mr. Reid’s previous experience as Chairman of the Clark County Commission is put to good use assisting with general legal advice for the project and helping navigate through the maze of regulators required to access economic incentives offered on the state and local levels.”
The Las Vegas Review-Journal reported in February that Nazarian was planning to open the SLS Las Vegas on Labor Day weekend, Aug. 29 through Sept. 1, with Stockbridge Capital Group of San Francisco being a co-owner with SBE Entertainment of the casino-hotel property.
The Las Vegas Review-Journal pegged the cost of the SLS Las Vegas renovation at $415 million, noting the initial financing of $300 million was secured in April 2012, followed by SBE and Stockbridge Capital Group obtaining in February 2014 the final $100 million financing needed to start construction.
The Wall Street Journal disclosed in February 2013 that SBE Entertainment Group had obtained $150 million in EB-5 investment commitments from Chinese and Thai citizens and other would-be immigrants who each agreed to make $500,000 debt investments in the project in exchange for a green card.
The Wall Street Journal further quoted Jon Bortz, chairman, president and chief executive of Pebblebrook Hotel Trust, a group owning 26 U.S. hotels, as calling the EB-5 program a “travesty.” Bortz said it allows foreigners to buy U.S. visas ahead of other less-affluent applicants, with investment management firms using the EB-5 financing to add hotel rooms when demand does not justify the construction, simply because the financing “is cheap because it’s from people who aren’t looking for a return on their investment.”
The American Dream Fund, operating the USCIS-approved EB-5 regional center in Los Angeles, Portland and Las Vegas, was responsible for soliciting from Asia the EB-5 funding required for Nazarian to proceed with the SLS Hotel and Casino in Las Vegas.
The Harvey Whittemore scandal
Reid’s reputation was tarnished by his support of Harvey Whittemore, a Lionel Sawyer & Collins partner who in 2005 was portrayed as one of the most powerful men in Nevada.
Reid strongly backed a Whittemore scheme in 1998 to develop some 43,000 acres of the Coyote Springs Valley, 50 miles north of Las Vegas alongside U.S. Interstate 93, into Nevada’s largest master-planned community. The $30 billion resort metropolis was slated to have 159,000 homes, 5,700 acres of commercial development and 15 golf courses, as reported by Peter Waldman in BizJournals.com in 2008.
Reid got involved to assist Whittemore in removing a mile-wide federal right-of-way for electric power lines planned to run right through the Coyote Springs property.
In 2003, Reid sponsored legislation that would have moved the electric power right-of-way through a federally protected “wilderness study,” with the move hidden in technical language within a larger bill that ultimately raised the ire of the U.S. Department of the Interior.
When theplan failed, Whittemore and his investors paid $10 million to buy the power-line easement.
Next, Reid wrote legislation to provide a separate water-pipeline right-of-way to Lincoln County and the Southern Nevada Water Authority that cleared the path across hundreds of miles to bring Great Basin ground water to Whittemore’s planned Coyote Springs Valley development, as well as to Las Vegas, Waldman reported.
“Over the past four years, Reid has used his influence in Washington to help the developer, Nevada super-lobbyist Whittemore, clear obstacles from Coyote Springs’ path,” the Los Angeles Times reported in 2006.
“At one point, Reid proposed opening the way for Whittemore to develop part of the site for free – something for which the developer later agreed to pay the government $10 million.”
The Los Angeles Times noted that as the Coyote Springs project advanced, Reid received tens of thousands of dollars from Whitmore in the form of campaign contributions and contributions to his Searchlight Leadership Fund PAC that Reid used to finance the campaigns of Democratic Party colleagues.
The newspaper also reported Whittemore helped advance the legal career of two of Reid’s four sons, with one of them, Leif Reid, serving as Whittemore’s personal lawyer representing the developer’s Coyote Springs project in negotiations with federal officials. Rory Reid, meanwhile, took a lobbying job with Whittemore while Rory was serving as the chairman of the Nevada Democratic Party.
Today, the Coyote Springs project is “little more than a single Jack Nicklaus-designed golf course surrounded by desert, abandoned infrastructure and thousands of empty housing footprints 25 miles from the nearest town,” wrote Daniel Foster for National Review in May 2013. Whittemore’s business partners in the deal are suing him for $60 million they claimed he embezzled from them to donate to himself or to politicians he wanted to finance
On Oct. 1, 2013, Whittemore was convicted to two years in federal prison and fined $100,000 for violating Federal Election Commission laws by fraudulently funneling $133,000 to Reid in 2007 for Reid’s 2010 reelection campaign. In the contest, Reid defeated tea party Republican challenger Sharron Angle by five points, despite having trailed in the polls through most of the election campaign.
Reid’s reaction to Whittemore’s sentencing was: “I am not a criminal.”
According to a U.S. Department of Justice press release in May 2013, Whittemore had devised a scheme to unlawfully use 29 family members, employees and their spouses to contribute over $130,000 of his money to Reid’s reelection, circumventing the maximum individual contributions of $2,300 for a primary election, $2,300 for a general election and a maximum for one candidate of $4,600.
Lionel Sawyer & Collins, the largest law firm in Nevada, was founded in 1967 by attorney Samuel S. Lionel and former Nevada Governor Grant Sawyer, like Reid, a Democrat.
The law firm has a reputation in Nevada for representing top mining, energy, property development and casino interests, as well as being a strong supporter of Reid and his family.