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Senator Harry Reid's Ethical Scandals

Over the course of his political career, Reid has been implicated in several serious ethics scandals:
  • In a 1998 real estate deal engineered by Jay Brown (a former casino lawyer and a longtime friend of Reid), the senator purchased two undeveloped residential-property lots on Las Vegas’ rapidly growing outskirts for approximately $400,000. Reid bought one of the parcels on his own, and the second one jointly with Brown. One of the sellers was a developer who was benefiting from a government land swap supported by Reid. In 2001 Reid sold both of his lots for $400,000 to a limited liability corporation created by Jay Brown, but he never disclosed the sale on his annual public ethics report. Nor did he inform Congress that he held any stake in Brown's company. As far as Congress knew, Reid was still the owner of the two lots he had purchased three years earlier.

    In 2004 Brown's company, having negotiated with local officials to rezone the property for a shopping center, sold the land to other developers in a deal that earned Reid $1.1 million -- a $700,000 profit on his initial investment. Reid falsely reported the transaction to Congress as a personal land sale.
  • In 2001 Reid paid cash for a $750,000 condominium at the Washington, D.C. Ritz-Carlton where he resides. When he subsequently gave Christmas bonuses (in 2002, 2004, and 2005) to the doorman and other support staff at his building, he used $3,300 in campaign donations rather than his own separate funds -- in contravention of federal election law. Reid’s campaign falsely listed the bonuses as campaign “salary” expenditures for two of the years in question, and as a “contribution” for the other year. When news of Reid’s misappropriation of campaign funds became public in 2006, the senator’s office said the listing as salary had been a “clerical error.” Added Reid: “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.”
  • In a $286 billion federal transportation bill passed by Congress in 2005, Reid secured $300 million in earmarks for projects in his home state, including $18 million to fund the construction of a bridge spanning the Colorado River. On the Arizona side of that bridge, Reid owned 160 acres of undeveloped land around which many new housing units were being built. Noting that the new bridge would cause the value of Reid’s property to skyrocket, Norman Ornstein, co-author of a book that examines earmarking, said: “It's a really bad idea for lawmakers to earmark projects when they have a financial interest that could in any way be affected by it.” Steve Ellis, vice president of Taxpayers for Common Sense, noted: “Unwittingly, the taxpayer may have helped inflate the value” of Reid's land.
  • Between 2002 and 2006, Reid intervened to gain monumental government concessions on behalf of a powerful Nevada land developer, Harvey Whittemore, who wished to build thousands of homes and numerous golf courses on 43,000 acres of barren land in an area called Coyote Springs, an hour northeast of Las Vegas. This land had a number of federal restrictions on its use: One-fourth of it was off-limits to developers because of federal protections for an “endangered” species of desert tortoise that dwelt there; another one-fourth was government-owned and was subject to a federal power-line right of way; and the territory overall was rife with streams and washes that the Environmental Protection Agency (EPA) had designated as crucial to the health of the desert’s ecosystem, and was therefore generally off-limits to construction.

    Thanks to Senator Reid’s intercession, however, the Bureau of Land Management agreed to relocate the tortoises to an adjacent federal preserve, thereby opening that portion of Coyote Springs to developers.

    In 2002 Reid inserted some obscure provisions into a land-management bill that relocated the aforementioned power corridor, thereby apparently freeing Whittemore to build on the 10,500-acre parcel he coveted. But the Senate's Energy and Natural Resources Committee balked at the deal, and Reid in turn negotiated an alternate arrangement where Whittemore was permitted to purchase the land at a fair market rate while the government relocated the corridor.

    Finally, in 2005 Reid and fellow Nevada Senator John Ensign used their influence with the EPA to eliminate the environmental-impact obstacle.

    In return for Reid’s efforts, Whittemore gave tens of thousands of dollars to the senator’s political campaigns and to his leadership fund (which Reid used to help bankroll the campaigns of fellow Democrats). In addition, Whittemore gave $5,000 to each of Reid's two sons, to finance their efforts to win local political offices. The developer also hired one of those sons as his personal lawyer to represent him in his dealings with federal officials.
  • Between 2001 and 2004, Reid wrote at least four letters pressing the Bush administration to take action on certain issues of importance to Indian tribes that were clients of the lobbyist Jack Abramoff. Abramoff, whose staff was in regular contact with Reid’s office, lobbied on behalf of tribes involved in the gambling casino industry; he would later be convicted in federal court for defrauding those tribes. Each time Reid wrote a letter on behalf of the Indian tribes, he collected donations from Abramoff and his lobbying partners and clients around the same time period. All told, these donations totaled nearly $68,000. Also between 2001 and 2004, Reid received more than $50,000 directly from four Indian tribes that were clients of Abramoff.


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