Federal
prosecutors have disclosed a 2008 FBI investigation of indicted Nevada
power broker Harvey Whittemore and longtime friend Senate Majority
Leader Harry Reid.
The investigation, conducted by the FBI’s
Washington field office, was sparked by media reports about Reid’s role
in helping Whittemore’s Coyote Springs master- planned community north
of Las Vegas clear government hurdles. It did not result in criminal
charges against either man.
Whittemore’s defense lawyers want a
federal judge to allow testimony about the investigation at his federal
trial next month on charges of unlawfully funneling $138,000 in campaign
contributions to Reid in 2007. Prosecutors have said the Nevada
Democrat was unaware of the alleged scheme.
Defense lawyers, led
by Dominic Gentile and Vincent Savarese, argued in court papers filed
this week that the 2008 investigation shows Whittemore had no criminal
intent to make illegal campaign contributions.
Whittemore, 59,
was once a top Nevada legislative lobbyist. He was indicted last June on
four felony charges, including making excessive contributions and lying
to the FBI and the Federal Election Commission. His trial is set for
May 14 before Senior U.S. District Judge Larry Hicks in Reno.
The
indictment alleges Whittemore met with Reid in February 2007 and agreed
to raise $150,000 for him by a March 31 campaign finance deadline.
Whittemore
unlawfully used family members and associates as conduits for
contributions to the senator’s campaign and then reimbursed them, the
indictment alleges.
Prosecutors originally disclosed the 2008
investigation in papers filed under seal in the current case and later
provided a copy to Whittemore’s lawyers, who made them public in defense
motions on Monday.
The Review-Journal obtained copies of the
documents from the federal court’s electronic docket Tuesday morning,
but later in the day, they were removed after prosecutors objected. The
defense motions were later re-posted, without the government papers
disclosing the 2008 investigation.
papers now sealed
Those
papers, co-signed by First Assistant U.S. Attorney Steven Myhre and
Eric Olshan, a trial attorney with the Justice Department’s Public
Integrity Section in Washington, now are sealed.
Late Tuesday,
the prosecutors filed a motion seeking to seal the defense motions in
their entirety, a move defense lawyers plan to oppose. Prosecutors
contend the defense motions refer to “sensitive, nonpublic investigative
information concerning a now-concluded matter.”
According to a
copy of the sealed government papers obtained by the Review-Journal, FBI
agents in 2008 reviewed media reports, searched public records for
federal campaign contributions Whittemore made to Reid and checked bank
records for Reid’s federal campaign committee obtained under subpoena.
Agents also interviewed two Nevada officials.
Whittemore’s
lawyers say it’s significant that the investigators failed to find any
evidence that Whittemore had violated federal campaign finance law.
“Evidence
that the government was aware of the campaign contributions at issue in
this case, but still found no evidence of a crime, supports
(Whittemore’s) defense that he had no criminal intent,” the lawyers
wrote.
But prosecutors said in court papers that investigators
in 2008 didn’t have crucial information that emerged several years
later.
“The government was unaware of the existence of any
evidence regarding the defendant’s alleged Federal Election Campaign Act
violations until attorney Richard Wright provided such evidence to the
FBI’s Las Vegas Division in November 2011,” prosecutors wrote.
Wright represented Whittemore’s former business partners in the Coyote Springs project.
The
development was to feature 160,000 homes on 43,000 acres and a Jack
Nicklaus Signature-designed golf course about 60 miles northeast of Las
Vegas, straddling Clark and Lincoln counties on U.S. Highway 93.
The development had to overcome several obstacles, including county water issues and federal land issues.
In
2004, Reid and other members of Nevada’s congressional delegation
pushed through a lands bill that moved a utility corridor away from
Whittemore’s land, among other provisions favorable to the developer.
Reid’s son Leif, an attorney, represented Whittemore on the Coyote Springs project.
Coyote Springs’ development has since stalled because of the housing crash and economic recession.
Whittemore’s lawyers described media reports about Reid’s dealings with Whittemore related to Coyote Springs as “fallacious.”
A spokeswoman for Reid said the senator is not commenting.
Intimidation alleged
In a separate motion, Whittemore’s attorneys alleged that FBI agents intimidated witnesses in the case.
The lawyers asked Hicks to allow them to pursue those allegations at trial.
One
witness, Michael Hillerby, an executive who worked under Whittemore and
contributed to Reid in March 2007, was threatened by agents with
criminal prosecution, the lawyers contend.
“Agents told him that
what he had done with regard to the contribution (he had made) could
open him up to legal culpability, including jail time,” the lawyers
said.
They added that Hillerby’s testimony, and possibly the
testimony of other witnesses, was “influenced or otherwise colored by
the fear of personal criminal prosecution thereby engendered so as to
conform to the perceived expectations of responsible government agents.”
Prosecutors will get a chance to respond in writing to the defense motions.
Natalie Collins, a spokeswoman for the Nevada U.S. Attorneys office, said she could not comment on matters still in litigation.
Earlier
this year an ongoing civil lawsuit over Coyote Springs and other
developments was settled between Whittemore and his former business
partners, California construction moguls Thomas and Albert Seeno.
The terms of the settlement were not disclosed.
Last
year the Seenos sued Whittemore, accusing him of embezzling and
misappropriating more than $40 million from the business venture to
support a lavish lifestyle, including spending millions on private jet
flights, home improvement projects and entertainment.
Whittemore,
who denied the allegations, once was considered the most powerful
legislative lobbyist in Nevada and one of the nation’s top gaming
attorneys. He represented the Nevada Resort Association, an organization
of the state’s top casinos, individual casinos and 100 businesses. He
also worked as managing partner for Lionel, Sawyer and Collins’ Reno
office for many years.
Stephens Washington Bureau Chief Steve Tetreault contributed to this report. Contact reporter Jeff German at
jgerman@reviewjournal.com or 702-380-8135.
Follow@JGermanRJ. Contact Francis McCabe at
fmccabe@reviewjournal.com or 702-380-1039.