Friday, October 10, 2003
Copyright © Las Vegas Review-Journal

Agents check reprisal rumor

Tax stance retaliation by casinos alleged

CARSON CITY -- Three legislators said Thursday they have been told the FBI is checking into allegations that Lake Tahoe casinos stopped buying beer from a Carson City Budweiser distributor because he opposed a tax increase backed by the gaming industry.

"It is my understanding they are looking into that," said Assembly Minority Leader Lynn Hettrick, R-Gardnerville.

Hettrick said Kirk Brown, owner of Capital Beverages in Carson City, opposed the 0.25 percent gross receipts tax and was prepared to testify against it during a legislative hearing. Although he never testified, Brown still lost Budweiser sales at Lake Tahoe casinos, Hettrick said.

"I heard the allegation about Capital Beverages," said Assemblyman Ron Knecht, R-Carson City. "I am quite aware the FBI was in the Legislative Building talking to a lot of people."

A third legislator, who requested anonymity, said the FBI is checking into whether the gaming industry retaliated against Brown for his tax stance.

"He got squeezed real hard," said the legislator who resides in Southern Nevada. "He was told they would pull his Budweiser sales at the lake if he testified against gross receipts."

Gary Thompson, a spokesman for Harrah's and Harvey's at Lake Tahoe, called the allegations lies.

He said the two casinos stopped buying Budweiser from Capital Beverages in August. They no longer sell any Budweiser, the most popular beer in America.

"It was a business decision," Thompson said. "We got a better deal from Coors. There is no law that we have to buy beer from anyone."

Brown did not return a call. Nevada Resort Association President Bill Bible did not return a phone message.

Sen. Mark Amodei, R-Carson City, said he met for 40 minutes with an FBI agent Tuesday and discussed questionable lobbying activities that occurred at the 2003 Legislature. He declined to detail the nature of the conversation.

Las Vegas FBI spokesman James Stern said, "We are reviewing and assessing information we received to determine if the FBI is going to initiate an investigation in this matter. We do not currently have an open investigation at this time."

None of the legislators who said that agents were asking about the Budweiser distributorship has been contacted by the FBI.

Amodei said that if the Capital Beverages allegations were true, legislators should take steps to prevent a recurrence.

"People should have the right to testify without retaliation," he said. "I don't know if any laws were broken or if anybody did anything wrong. Were federal statutes violated? Probably not."

Hettrick said he was concerned that anyone would lose business for a tax stance.

"You can't threaten someone that they will lose business if they don't vote your way," he said.

Legislators, led by Hettrick and Assembly Republicans, blocked moves by the gaming industry and Democratic Assembly members to pass a gross receipts tax similar to one in the state of Washington.

During the legislative session, several reports said lobbyists were pressuring freshmen Assembly members to back the gross receipts tax. But in interviews, the freshman legislators denied the lobbyists exerted any unreasonable influence.

The Legislature approved a record $836 million tax increase over the next two years. Instead of a gross receipts tax, they backed a 0.7 percent tax paid by employers on their payrolls. Banks pay a 2 percent tax on employee payrolls.