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Thursday, July 30, 1998
Ethics panel to Jones: Talk with husband
A commission expresses disbelief that Las Vegas' mayor didn't discuss money matters with her spouse.
By Mike Zapler
Review-Journal
The state Ethics Commission stepped into the role of marriage counselor last week and advised Las Vegas Mayor Jan Jones to improve communication with her husband, former Stratosphere President Richard Schuetz.
Testifying in a closed hearing last week, Jones and Schuetz said they rarely discuss finances, focusing instead on family issues.
But commissioners struggled to understand the couple's dealings -- and whether it is possible, as the mayor contends, that they did not discuss in detail a multimillion dollar land deal that Jones failed to disclose before a key Las Vegas City Council vote in May.
Commissioners voted unanimously to further examine that transaction, as well as a questionable phone call from Jones to a project opponent and undisclosed campaign contributions to all five council members.
"You are making it sound like the two of you are a bank merger, not a marriage," commission Chairwoman Mary Boetsch told Jones, according to transcripts released Wednesday.
Said Commissioner Joni Wines, "Your way of life is so far gone from mine that it's hard for me to understand. It really is."
Questions arose after a unanimous May 26 vote of the Las Vegas City Council to deny a gourmet seafood restaurant proposed for West Sahara Avenue in front of the BankWest building, just west of Interstate 15.
Responding to a complaint by former City Councilman Steve Miller, the commission is investigating possible ethical violations regarding the mayor's conduct before the vote.
The restaurant was opposed by BankWest representatives, who lobbied intensely against it. They said it would obstruct the building's view and hinder customer access.
But restaurant applicant Marc Gordon said the project meets the city's minimum zoning requirements. He claims the council bowed to pressure from the bank's powerful board of directors.
The ethics panel's inquiry extends beyond the merits of the proposed supper club.
Two BankWest principals -- founder William Boyd, chief executive officer of Boyd Gaming Corp., and director Perry Whitt, also a Boyd gaming executive -- provided partial financing for a $4.3 million land tract purchase by a limited partnership that includes Schuetz. The deal closed May 22, but Jones did not disclose her husband's debt to the restaurant opponents before speaking and voting against the project.
The mayor said she was unaware of the details of Schuetz's land purchase of 79 acres in northwest Las Vegas. The mayor said she and Schuetz, who were married in January, signed an extensive prenuptial agreement separating their finances. She also said several times that she was preoccupied with her treatment for breast cancer.
"I have no interest in his (Schuetz's) financial dealings. In fact, the prenuptials very clearly state that if we choose to co-invest in a property, it has to be done by a separate contract."
Later, Jones added, "I would just respectfully say that we do have conversations, but in our life, it was more about health and issues that were paramount at the time."
Jones was diagnosed with breast cancer in January, and Schuetz said his father died in early May.
Commissioners said they had trouble believing Jones, who listed her husband's debt on a May 28 financial disclosure statement. Schuetz said he prepared the statement on May 27, the day after the restaurant vote, and that Jones signed it the morning of May 28.
"(In) most other relationships, husband(s) and wives talk about multi-million dollar investments, and they do a little more than say, `Gee honey, I invested some money today,' " Boetsch said.
"Whether or not you have a financial interest in his business dealings because of the prenup isn't the issue. You have an interest in him because you are married to him."
Boetsch also said Jones has an obligation to learn about Schuetz's finances.
"In the position you are in, Mayor Jones, running for governor, you better chat or you are going to be back (before the commission) and you know it," the chairwoman admonished.
The commission will decide at an Aug. 14 hearing in Las Vegas whether Jones violated state ethics laws.
During that hearing, the ethics panel also will probe a telephone call Jones made to Boyd days before the vote during which she asked to set up a meeting to solicit contributions for her gubernatorial campaign. Jones faces a Democratic primary election Sept. 1 against state Sen. Joe Neal, D-North Las Vegas.
Boyd said he and Jones talked about the restaurant during that conversation. Jones told the commission "it didn't occur" to her that the timing of the call might be considered suspect.
Regarding the land purchase, Schuetz said in last week's hearing that he had asked Jones in March whether it would be proper for him to buy land in the city. Jones said it would be fine as long as the purchase was disclosed.
Schuetz said he has a 25 percent stake in TES Ltd., which purchased the 79 acres. Former Circus Circus Enterprises Inc. Chairman Clyde Turner and former Bank of America, Nevada chief executive officer Richard Etter each own 37.5 percent of the company.
TES Ltd. bought the land from several people, including Boyd, who owned 20 percent, and Whitt, a 10 percent owner. According to documents provided by Boyd, TES Ltd. made a $750,000 down payment on the land. Then Boyd, Whitt and the other owners issued a note of debt for $3.61 million, which Boyd said must be paid within two years.
Schuetz told the commission he has little knowledge of real estate and relied on Turner's advice. Schuetz said he even signed documents for the land purchase without reading them.
"People can argue that you must be a very foolish person to get involved in a deal this big and not really get involved in it," he said. "And to explain that, I met Clyde Turner 14 years ago, and I think he is the finest person on the entire planet. If Clyde called me on the phone tonight and said, `Put everything in a bag and give it to me,' I can't explain why I would do that."
In preparing Jones' financial disclosure statement, Schuetz also said he found it ironic that he was doing business with major supporters of Kenny Guinn, a Republican candidate who could face Jones in the general election. He noted that Circus Circus, under Turner, donated $300,000 to Guinn's campaign. Boyd Gaming, meanwhile, has given $52,000 to Guinn.
Schuetz also recounted an interview with a reporter when he was asked whether he discussed the land deal with Jones.
"I tried to explain to him ... I can sit in my office and make a quarter-million dollar stock trade and walk into the kitchen and give my wife a hug and not mention it," Schuetz said.
The commission also will consider whether Jones and other council members should have disclosed campaign contributions from Boyd Gaming before the vote. Jones told the commission that she received $10,500 from the company for her 1991 mayoral run and $10,000 for her 1995 re-election bid. But she did not mention that Boyd contributed $27,500 to her failed 1994 bid for governor.
Councilman Gary Reese's friendship with BankWest President Larry Woodrum also will be investigated. Reese disclosed the relationship but then voted against the restaurant.
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