Krolicki indictment also reveals negligence of oversight board


Motive? The prosecutors who indicted Lt. Gov. Brian Krolicki don't need to prove no stinkin' motive.

But a late-night read of 400-plus of pages of grand jury transcripts makes it clear from the witness testimony that the financial transactions state prosecutors contend were illegal were executed for one reason: to market Krolicki's mug to the public under the guise of marketing Nevada's College Savings Program.

The other thing that comes through loud and clear is that the board appointed to oversee the program was negligent in its duties and gave Krolicki free rein. Krolicki, then the state treasurer, was the prime mover behind both the College Prepaid Tuition program created in 1997 and the Nevada College Savings Program created in 2001. The same board was responsible for both programs.

The testimony of former state Budget Director Perry Comeaux, a former member of the board, made it clear he was embarrassed by some of what he didn't do, such as push to see financial statements for the college savings program. When he was preparing for his testimony, Comeaux said, he reviewed the board minutes and was "baffled" because the board didn't receive financial reports and didn't press for them to be provided.

It was also obvious grand jurors thought the board members didn't do what they were supposed to do. One grand juror asked: "Mr. Comeaux, since this at the time was a new program and Mr. Krolicki was chairman of the board, do you feel that the board just kind of gave him carte blanche to do what he felt was necessary or what he wanted to do in order to make it succeed?"

Comeaux answered: "I don't know if I would go quite that far. The board certainly gave him a great deal of latitude."

So much latitude the state treasurer is alleged to have funneled fees from the college savings programs into accounts that didn't go through state accounts, and the budget director had no idea. So much latitude that an advertising contract was let through without the board's approval. That's a lot of latitude, folks.

Chris Giunchigliani, a former assemblywoman and now county commissioner, explained to the grand jurors that in 2003 Krolicki asked for $370,000 a year to market the college savings program.

"Why would you ask for that kind of money to market something that seems somewhat self-sufficient and self-explanatory," testified the former vice chair of Assembly Ways and Means.

For that time, it was a huge dollar amount for marketing, she said.

"We also had issues in the Legislature with elected officials using marketing to market themselves rather than a product," Giunchigliani said.

Eventually, Krolicki was given $185,000 a year despite not offering lawmakers any plan for how the money would be spent, Giunchigliani said.

Rose-Glenn Advertising Agency in Reno created a plan to promote the program between 2003 and 2006 using Krolicki as the spokesman for the program on TV, print, radio, direct mail, public relations and e-mail blasts.

The bills were paid through four separate accounts, an advertising executive explained.

Krolicki needed more than the state was giving him to spend, so he was using fees generated by the program to pay for the marketing without seeking the permission of lawmakers. The treasurer's office paid the $185,000 plus another $450,000 in 2005 and overspent in 2006 by a whopping $878,000, a legislative audit found.

Comeaux and Giunchigliani both said that was not allowed under the state Budget Act.

Krolicki insists he did nothing wrong and will address the specifics in court.

The four counts against Krolicki and two against Chief of Staff Kathy Besser talk about misappropriation of state funds in excess of $250. But actually, the sums allegedly misappropriated add up to $6 million.

Nobody is saying Krolicki embezzled any money. They're claiming he used money for marketing and legal fees without asking the Legislature for approval. The marketing plan gave him a lot of television face time, when he was running for lieutenant governor in 2006.

Meanwhile, those former board members who didn't ask for financial reports for the Nevada College Savings program, well, they should hang their heads in shame, even if Krolicki is acquitted, because they weren't doing their jobs responsibly.

Perry Comeaux isn't the only one baffled by that.

Jane Ann Morrison's column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call (702) 383-0275. She also blogs at lvrj.com/blogs/morrison