Federal prosecutors have disclosed a 2008 FBI investigation of indicted Nevada power broker Harvey Whittemore and longtime friend Senate Majority Leader Harry Reid.
The investigation, conducted by the FBI’s Washington field office, was sparked by media reports about Reid’s role in helping Whittemore’s Coyote Springs master- planned community north of Las Vegas clear government hurdles. It did not result in criminal charges against either man.
Whittemore’s defense lawyers want a federal judge to allow testimony about the investigation at his federal trial next month on charges of unlawfully funneling $138,000 in campaign contributions to Reid in 2007. Prosecutors have said the Nevada Democrat was unaware of the alleged scheme.
Defense lawyers, led by Dominic Gentile and Vincent Savarese, argued in court papers filed this week that the 2008 investigation shows Whittemore had no criminal intent to make illegal campaign contributions.
Whittemore, 59, was once a top Nevada legislative lobbyist. He was indicted last June on four felony charges, including making excessive contributions and lying to the FBI and the Federal Election Commission. His trial is set for May 14 before Senior U.S. District Judge Larry Hicks in Reno.
The indictment alleges Whittemore met with Reid in February 2007 and agreed to raise $150,000 for him by a March 31 campaign finance deadline.
Whittemore unlawfully used family members and associates as conduits for contributions to the senator’s campaign and then reimbursed them, the indictment alleges.
Prosecutors originally disclosed the 2008 investigation in papers filed under seal in the current case and later provided a copy to Whittemore’s lawyers, who made them public in defense motions on Monday.
The Review-Journal obtained copies of the documents from the federal court’s electronic docket Tuesday morning, but later in the day, they were removed after prosecutors objected. The defense motions were later re-posted, without the government papers disclosing the 2008 investigation.
papers now sealed
Those papers, co-signed by First Assistant U.S. Attorney Steven Myhre and Eric Olshan, a trial attorney with the Justice Department’s Public Integrity Section in Washington, now are sealed.
Late Tuesday, the prosecutors filed a motion seeking to seal the defense motions in their entirety, a move defense lawyers plan to oppose. Prosecutors contend the defense motions refer to “sensitive, nonpublic investigative information concerning a now-concluded matter.”
According to a copy of the sealed government papers obtained by the Review-Journal, FBI agents in 2008 reviewed media reports, searched public records for federal campaign contributions Whittemore made to Reid and checked bank records for Reid’s federal campaign committee obtained under subpoena. Agents also interviewed two Nevada officials.
Whittemore’s lawyers say it’s significant that the investigators failed to find any evidence that Whittemore had violated federal campaign finance law.
“Evidence that the government was aware of the campaign contributions at issue in this case, but still found no evidence of a crime, supports (Whittemore’s) defense that he had no criminal intent,” the lawyers wrote.
But prosecutors said in court papers that investigators in 2008 didn’t have crucial information that emerged several years later.
“The government was unaware of the existence of any evidence regarding the defendant’s alleged Federal Election Campaign Act violations until attorney Richard Wright provided such evidence to the FBI’s Las Vegas Division in November 2011,” prosecutors wrote.
Wright represented Whittemore’s former business partners in the Coyote Springs project.
The development was to feature 160,000 homes on 43,000 acres and a Jack Nicklaus Signature-designed golf course about 60 miles northeast of Las Vegas, straddling Clark and Lincoln counties on U.S. Highway 93.
The development had to overcome several obstacles, including county water issues and federal land issues.
In 2004, Reid and other members of Nevada’s congressional delegation pushed through a lands bill that moved a utility corridor away from Whittemore’s land, among other provisions favorable to the developer.
Reid’s son Leif, an attorney, represented Whittemore on the Coyote Springs project.
Coyote Springs’ development has since stalled because of the housing crash and economic recession.
Whittemore’s lawyers described media reports about Reid’s dealings with Whittemore related to Coyote Springs as “fallacious.”
A spokeswoman for Reid said the senator is not commenting.
In a separate motion, Whittemore’s attorneys alleged that FBI agents intimidated witnesses in the case.
The lawyers asked Hicks to allow them to pursue those allegations at trial.
One witness, Michael Hillerby, an executive who worked under Whittemore and contributed to Reid in March 2007, was threatened by agents with criminal prosecution, the lawyers contend.
“Agents told him that what he had done with regard to the contribution (he had made) could open him up to legal culpability, including jail time,” the lawyers said.
They added that Hillerby’s testimony, and possibly the testimony of other witnesses, was “influenced or otherwise colored by the fear of personal criminal prosecution thereby engendered so as to conform to the perceived expectations of responsible government agents.”
Prosecutors will get a chance to respond in writing to the defense motions.
Natalie Collins, a spokeswoman for the Nevada U.S. Attorneys office, said she could not comment on matters still in litigation.
Earlier this year an ongoing civil lawsuit over Coyote Springs and other developments was settled between Whittemore and his former business partners, California construction moguls Thomas and Albert Seeno.
The terms of the settlement were not disclosed.
Last year the Seenos sued Whittemore, accusing him of embezzling and misappropriating more than $40 million from the business venture to support a lavish lifestyle, including spending millions on private jet flights, home improvement projects and entertainment.
Whittemore, who denied the allegations, once was considered the most powerful legislative lobbyist in Nevada and one of the nation’s top gaming attorneys. He represented the Nevada Resort Association, an organization of the state’s top casinos, individual casinos and 100 businesses. He also worked as managing partner for Lionel, Sawyer and Collins’ Reno office for many years.
Stephens Washington Bureau Chief Steve Tetreault contributed to this report. Contact reporter Jeff German at email@example.com or 702-380-8135. Follow@JGermanRJ. Contact Francis McCabe at firstname.lastname@example.org or 702-380-1039.