Senate Minority Leader Harry Reid, D-Nev., is denying any wrongdoing in collecting 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.
Reid says he hasn't done anything wrong but is willing to change his report on the transaction if the Senate Ethics Committee orders him to.
Reid hung up last week on an A-P reporter asking about the deal. He told a Las Vegas news conference today that everything he did was "transparent," that he "paid all the taxes" and that everything was "fully disclosed."
Aides to the senator say no money changed hands in 2001 when Reid got an ownership stake in a friend's company equal to the value of the land. 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 Nevada Democrat's 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. He's never been charged with wrongdoing - except for a 1981 federal securities complaint that was settled out of court.
Land deeds obtained by The Associated Press during a review of Reid's business dealings show: -The deal began in 1998 when Reid bought undeveloped residential property on Las Vegas' booming outskirts for about $400,000. Reid bought one lot outright and a second parcel jointly with Brown. One of the sellers was a developer who was benefiting from a government land swap that Reid supported. The seller never talked to Reid.
-In 2001, Reid sold the land for the same price to a limited liability corporation created by Brown. The senator didn't disclose the sale on his annual public ethics report or tell Congress he had any stake in Brown's company. He continued to report to Congress that he personally owned the land.
-After getting local officials to rezone the property for a shopping center, Brown's company sold the land in 2004 to other developers and Reid took $1.1 million of the proceeds, nearly tripling the senator's investment. Reid reported it to Congress as a personal land sale. 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. Reid hung up the phone when questioned about the deal during an AP interview last week.
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.
They also said they have no documents proving Reid's stake in the company because it was an informal understanding between friends. The 1998 purchase "was a normal business transaction at market prices," Reid spokesman Jim Manley said. "There were several legal steps associated with the investment during those years that did not alter Senator Reid's actual ownership interest in the land."
Senate ethics rules require lawmakers to disclose on their annual ethics report all transactions involving investment properties - regardless of profit or loss - and to report any ownership stake in companies. |