CARSON CITY -- Former Agency for Nuclear Projects administrator Bob Loux burst into tears Thursday night after the Ethics Commission found on a 3-2 vote he did not break state ethics laws by boosting his salary and that of his staff beyond levels approved by the Legislature.
"I am relieved," Loux said after the decision, hugging his wife. "I don't believe I ever did anything wrong. I don't believe I ever violated any law."
Commissioner George Keele said the panel had no choice but to drop the charges because the governor, not the Legislature, determines Loux's salary and those of his staff.
However, the charges against Loux, set earlier by a two-member panel of the commission, stated Loux violated state ethics law by giving himself and his staff unwarranted benefits by authorizing raises that put their salaries above legislatively approved rates.
"What the charges ought to have said is Loux gave himself pay raises above the governor's approved salary amounts," Keele said.
Commissioner Erik Beyer and former Commissioner Tim Cashman set the charges.
Keele said a 1999 state law put Loux's agency under direct control of the governor. Governors were given the authority to pay individual staff members as much as they wanted, if the total salary spending for the office did not exceed the legislatively approved figure.
Earlier in the hearing, Senate Minority Leader Bill Raggio, R-Reno, testified that for the past 10 years, state budgets have not shown the individual salaries of state employees.
Commissioners Robert Weise and Chairman Mark Hutchison complained that Loux was being let off on a technicality, but Commissioner Don Klasic said the panel had to consider that technicality: "This man's property and liberty are at stake."
The four-day hearing then ended when Commissioner Jim Shaw agreed with Klasic and Keele.
Loux added afterward that he did not believe he was getting off on a technicality because the "issue all along was whether the Legislature approved salaries for individuals. It is clear under the law that it does not."
Before retiring under pressure from Gov. Jim Gibbons in January, Loux had served as Nevada's No. 1 public official fighting the U.S. Department of Energy's effort to put a high-level nuclear waste repository at Yucca Mountain. He began working for the state in 1976.
Because of the decision, Loux said he was confident that criminal charges would not be brought against him. At the request of Attorney General Catherine Cortez Masto, a Washoe County sheriff's investigator attended the entire Ethics Commission hearing.
The commission cleared Loux though state Budget Director Andrew Clinger on Thursday testified he went through Loux's payroll records from 2006 until his retirement and found he earned nearly $55,000 more than legislatively authorized levels.
During the hearing, former Gov. Kenny Guinn, all five of his chiefs of staff and three of Gibbons' top executives testified that Loux had not been given approval to increase his salary or those of his staff.
A complaint had been filed with the Ethics Commission against Loux after an Interim Finance Committee hearing in September by Assembly Minority Leader Heidi Gansert, R-Reno.
At that meeting, Loux admitted he took the $74,000 salary of an employee who retired and converted it into 16 percent salary increases for himself and his staff.
Clinger, however, told legislators he thought Loux was authorized to give himself and his staff the salary increases.
In testimony Wednesday, Clinger said he had been wrong.
Loux told the commission Thursday that he had been pressured by Clinger and Gibbons chief of staff Josh Hicks into telling legislators that he committed salary errors and to take full responsibility when he really believed he had done nothing wrong.
"I was a team player," he said. "But in reality, I was walking the plank."
The next day, Gibbons demanded that he resign.
Loux maintained that Victoria Soberinsky Napier, the former deputy chief of staff to Guinn, told him in 2000 he did not have to go to the governor for approval of salary increases but instead could determine increases on his own.
Napier, however, testified Wednesday that she did not recall giving Loux the authority to set his own salaries. That step would not have been something that Guinn wanted, she added.
But Loux said he had approved 10 to 12 salary increases on his own since 2000 without any objections from governors or the state budget office.
"I believed 100 percent sincerely that I had the authority to do that," he testified. "If there was a concern, I thought someone would let me know."
Throughout the hearing Weise complained that it appeared no one was paying much attention to Loux and his office.
He noted that four former chiefs of staff testified they did not even know the Agency for Nuclear Projects was part of the governor's office.
"I can't believe a budget analyst would not look at what actually was being spent (by Loux) and his office," Weise said.
In closing arguments, Loux attorney Tom Perkins asked the commission to consider that Loux could have felt he had authority to increases salaries because even the state budget director thought he had that power.
"Don't think he is getting off scot-free," Perkins said. "He is taking a hit. The end of his career is clouded."
After the decision, Loux said he intends to pay back about $12,000 to the state controller's office for an error discovered in how he was paying his retirement benefits. Because of the error, he had been receiving $400 more each two-week pay period than he should have received since 2006.
The retirement pay error also was not among the charges filed against Loux.
Nonetheless, Weise said it represented unwarranted pay for Loux. He questioned how Loux would not have known something was amiss because he was getting the extra pay in his checks.
"It is just as blatant as an unwarranted pay raise," Weise added. "I don't believe we operate under a system that it is OK as long as you don't get caught."
Contact Las Vegas Review-Journal Capital Bureau Chief Ed Vogel at evogel@ reviewjournal.com or 775-687-3901.