Berkley's campaign ad raises a $64 million question


Shelley Berkley's campaign ad that attempts to link U.S. Sen. Dean Heller to a Nevada-based diamond mine scam was declared a fake in record time.

The television commercial accuses former Nevada Secretary of State Heller of failing to interrupt the $64 million fraud perpetrated at Urban Casavant's CMKM Diamonds Inc. while it was printing and selling, authorities alleged, 800 billion shares of worthless stock to 40,000 starry-eyed investors.

The consensus view is the commercial was an unsuccessful attempt by Berkley's campaign to adjust the focus from the House Ethics Committee probe she's facing to Heller's past as the state's supposed securities regulator.

"While Heller was supposed to be stopping fraud, a Nevada diamond company broke the law, scamming thousands of investors out of $64 million," the ad alleges.

The counterattack was immediate, the criticism unanimous.

"Obviously, Shelley Berkley's lies about Medicare are not working, so now she is inventing new ones," said Chandler Smith, Heller for Senate campaign spokeswoman. "Congresswoman Berkley is a desperate politician whose ambitions are being destroyed by her own ethics problems.

"This is a story that Shelley Berkley has been trying to sell to reporters for months, but no one would buy it because there were no facts to support her allegations. So now she has resorted to running a blatantly false negative attack in a desperate attempt to create more fiction. What's next, congresswoman? Is Dean Heller responsible for Bernie Madoff?"

Madoff, no. Casavant, yes.

In a Saturday Review-Journal report, University of Nevada, Reno political science professor Erik Herzik declared the ad "a reach and a diversion. … She's trying to divert attention from herself. And if this is the best she's got, it's not very good."

And the Las Vegas Sun on Monday determined the Heller-CMKM advertisement was "unfair" and concluded the commercial was "laughable."

The advertisement's attempt to connect a Casavant scandal co-conspirator to Heller through a campaign contribution also received the thumbs down from political observers. That, too, was laughable.

Is the advertisement an attempt to divert attention from her ethics imbroglio?

Absolutely.

Is the CMKM-Heller issue a hollow criticism of his tenure as security of state?

Absolutely not.

As secretary of state, Heller had the challenging, some would argue impossible, task of tracking and scrutinizing Nevada-based securities. The state has been a stock grifter's paradise since shortly after statehood, so no one could reasonably expect a business-oriented bureaucrat to investigate a company as exotic-sounding as CMKM Diamonds, a controversial outfit I began writing about nearly a decade ago after scores of investors were jilted while state regulators stood silently by.

Why the inaction? Investors wanted to know, and they were stunned to find out Heller, a weekend racing enthusiast, had been driving a truck that appeared to be sponsored by CMKXtreme.com, a CMKM Diamonds affiliate. I reflected the investors' skepticism in a 2005 column.

Imagine my surprise on Monday when Smith said my report was inaccurate.

"Dean Heller is not a friend or acquaintance of Urban Casavant. Some reports have mistakenly connected Dean Heller to Mr. Casavant at an October 2004 race in Las Vegas, but in fact Dean's friend and Go Fast sponsor invited Dean to drive his car, and Dean agreed," she said in an email.

She also provided a copy of a letter from that friend, fellow racing aficionado Matt Daly. "I understand the Las Vegas Review-Journal (meaning my column) reported that the truck was loaned to Dean by Urban Casavant. The report is false, and I am willing to provide additional information as necessary," he wrote in a letter prepared for the campaign.

The confusion, he said, was that "CMKM Diamonds sponsored the ASA Speed Truck Series. As a result, the CMKXtreme.com logo was added to every truck in the series."

Daly said that he "can attest to the fact that Dean Heller drove one of the two trucks owned by Go Fast Racing LLC, a race team that I owned. We raced in the ASA Speed Truck Challenge at the Las Vegas Motor Speedway 'Bullring' on October 30, 2004."

After being introduced to Heller by a mutual friend - Rick Gosselin, Heller's Carson City car sponsor - Daly decided it was smart business to court the secretary of state.

"Since I was the distributor of Go Fast Energy Drink for Nevada, I thought sponsoring Dean's race car was a good marketing opportunity for Go Fast in the Carson City/Reno area. ... I knew that Dean was always up for new opportunities when it came to racing, and since Dean mostly raced in Northern Nevada, I figured this was something he would enjoy, a fun opportunity for me to race with him, and good exposure for Go Fast Racing in Las Vegas. So, I invited Dean to drive my truck in the race."

It was as simple and innocent as all that, Daly and Smith agree.

But Heller's friend Daly left something out of his letter.

Go Fast Nevada has benefited greatly from millions in investments from Casavant's CMKXtreme Inc.

"Beginning April 22, 2004 and continuing through January 31, 2006, Go Fast Nevada Ltd., Go Fast Racing, Go Fast Sports and Beverage Inc. and Go Fast Inc. (Hereafter referred to as Go Fast Companies) received $2,335,610 from James Kinney, P.A. Holdings, Inc., CMKXtreme, Inc., and AG Enterprises Inc.," a 2009 investor lawsuit filed in Clark County District Court alleges. "These funds were either loaned to or invested in the Go Fast Companies as a result of funds received by James Kinney from the sale of CMKM stock illegally issued by company insiders."

Stock sale records and canceled checks clearly link CMKM Diamonds executives and affiliated companies to investments in Go Fast Energy, whose Nevada distributor fails to acknowledge that relationship in his letter.

Casavant, under indictment in connection with fraud allegations, remains at large. Kinney, a securities dealer and CMKM insider, lost a December 2009 default judgment to the Securities and Exchange Commission totaling almost $7 million.

That the Heller campaign is openly trying to deceive the press on this issue is disturbing at several levels. It has single-handedly managed to turn a story the political media rushed to write off into an issue that demands greater scrutiny.

It will be a level of scrutiny former Secretary of State Heller failed to practice back when he was too busy racing to spot the scandal at CMKM Diamonds.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. Email him at Smith@reviewjournal.com or call 702-83-0295. He blogs at lvrj.com/blogs/Smith.

 

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