Partisans weigh in on Krolicki’s case

While his allies insist he's the innocent victim of a malicious and unjustified prosecution, Lt. Gov. Brian Krolicki's detractors say he needs to account for serious crimes.

Krolicki, who was indicted by a Clark County grand jury on Wednesday on four felony charges involving the mishandling of state money, showed a clear disregard for the rules that are there to protect taxpayers, Assemblywoman Sheila Leslie, D-Reno, said.

If convicted of the four felonies -- two counts of misappropriation by a public officer and two counts of misappropriation by a treasurer -- Krolicki would be automatically removed from office under state law. He could face up to 16 years in prison, though the charges also carry the possibility of probation.

Krolicki, a Republican, has said he did everything by the book, based on legal counsel from the attorney general's office at the time. His defenders say even if there were accounting errors, a felony prosecution -- by a Democratic attorney general -- is suspiciously disproportionate.

Leslie, who chaired the subcommittee that heard the results of the legislative audit of how Krolicki, while serving as state treasurer, administered the Nevada College Savings Program, disagreed.

"In order to ensure that public money is spent correctly, there's oversight mechanisms built into the process," Leslie said. "He ignored them and decided for himself how to spend the money."

The audit concluded Krolicki didn't properly account for fees earned by the program and spent too much, without proper authorization, to run and advertise the program, which helps parents save for their children's higher education.

No state money went into Krolicki's pockets, the audit said, and the parents' accounts themselves weren't touched, just the money they paid in fees.

Prosecutors have indicated that the audit forms the basis for the criminal charges, details of which remain mostly under seal pending the publication of the transcript of the grand jury hearing that led to the indictment.

Krolicki's longtime political consultant, Ryan Erwin, said he has no doubt Krolicki will be exonerated and emerge politically stronger than ever. He said he was "absolutely stunned" by the criminal indictment.

"We knew there was an investigation. We've known for a long time that the Democrats had a plan to do something like this," Erwin said. "Sure enough, they've executed it. Brian fully cooperated and we know there's nothing criminal here."

Krolicki believes that the investigation into his activities began with allegations by the treasurer who succeeded him, Democrat Kate Marshall, and was pushed forward by U.S. Senate Majority Leader Harry Reid, D-Nev., after Krolicki announced last month he might run against Reid.

Reid, who has denied involvement, said in a prepared statement Thursday: "This is disturbing news for our state and for the Lt. Governor. I believe in the American system of justice and that Mr. Krolicki is presumed innocent. I hope this matter will be resolved quickly so the proceedings do not become a distraction for the state."

But considering the apparent flimsiness of the charges, Erwin said, "This smells like partisan politics."

Leslie said that argument misses the point.

"The audit said it wasn't embezzlement. ... The problem was that he took it upon himself to decide where to spend the state's money," Leslie said. "That's a crime. It violates the state budget act. ... To violate those checks and balances, to violate the law in that way, is a serious breach."

Leslie also scoffed at the idea that the prosecution is a partisan matter.

She was only chairing the audit subcommittee, Leslie said, because the rotating chairmanship, currently held by a Republican, fell to her.

The audit was an evaluation of the treasurer's office, not Krolicki specifically; once it found a law was violated, staffers had to forward it to the attorney general; Cortez Masto has said based on the facts uncovered by the Nevada Department of Public Safety investigation, she had a responsibility to enforce the law by prosecuting the case.

"It's an incredible stretch to say that I'm part of the Democratic conspiracy to derail him, or whatever he says," Leslie said. "It couldn't be further from the truth. He has to know that on some level. But he doesn't want to acknowledge responsibility."

Originally from Missouri, Krolicki, 47, attended Stanford University and then went into finance, working for the investment firm Smith Barney in locales from San Francisco to the Persian Gulf nation of Bahrain. According to Erwin, he "speaks five or six languages."

Krolicki moved to Nevada in the 1980s and got involved in politics alongside former Treasurer Bob Seale, who was elected to the post in 1990. Krolicki was on board a plane piloted by Seale when in crashed in rural Nevada, killing Seale's wife and injuring Seale and Lt. Gov. Sue Wagner.

After serving as Seale's chief deputy for eight years, Krolicki ran for the post in 1998 and held it for two four-year terms.

Elected to the part-time, mostly ceremonial post of lieutenant governor in 2006, he lives in Stateline with his wife and three daughters.

Friends describe him as dutiful to a fault, a "boy scout" who lacks many politicians' inflated sense of themselves.

"If you look in the dictionary under 'decency,' there should be a picture of Brian," said his lawyer, Kent Robison, who has advised Krolicki not to talk to the media while the criminal matter is pending. Robison said he considers Krolicki a friend as well as a client.

So does Erwin.

"There's a lot of people in politics you would never invite to your house, no matter how good they are at what they do," he said. "He looks out for people. He always does things right, even when others may find it annoying. He's a guy that not only would you want as your elected official, you'd also want him as your neighbor."

But those who have tangled with Krolicki say he's stubborn and difficult, a man incapable of seeing other points of view and dismissive of them as a result. Democrats in the Legislature generally don't put him among the Republicans they have a working relationship with.

Leslie pointed to Krolicki's ongoing campaign to get the state to take out bonds on the future proceeds of the tobacco settlement fund to raise money. Legislators have repeatedly dismissed the idea, but he keeps pursuing it.

"He seems to ignore the inconvenient facts, and it's hard to have a dialogue with someone when they keep ignoring what you're trying to say," she said. "Over time, that frustration builds to where you have very little credibility with people."

Krolicki is scheduled to appear in court to face arraignment on Dec. 18. If the case goes to trial, he will not be the first state official to face a jury on criminal charges.

In the 1920s, Treasurer Ed Malley and Controller George Cole embezzled more than $500,000 from the state treasury, state Archivist Guy Rocha said. Each spent four years in prison before later being pardoned.

Back in the 1860s, the state's first treasurer, Eben Rhoades, sold state land and then used the proceeds to speculate on worthless mining stocks and feed a prodigious cocaine habit. He stole at least $106,000.

His misdeeds went undetected until after he died of a heart attack while partying in San Francisco in 1869. Former Treasurer Patty Cafferata determined in the 1980s that the embezzlement had cost state government $300 million in interest over the years.

But Rocha sees wide differences in Krolicki's situation and those of Malley, Rhoades and politicians who more recently have sought to enrich themselves.

"He (Krolicki) is not being accused of personally benefiting financially," Rocha said. "He kept funds outside the state fiscal oversight system, which he did not have authority to do. The others were convicted of bribery and embezzlement. Obvious felonies. It is not as clear-cut with Krolicki. He wasn't stealing money from the state."

Rocha, who said he considers Krolicki a friend, wondered why Krolicki is being indicted.

"I am not absolving Brian Krolicki, but there are people who certainly would like to see him out of the (political) picture," Rocha said. "This is not as clear cut as the historic cases."

Stephens Media Washington Bureau Chief Steve Tetreault contributed to this report. Contact reporter Molly Ball at mball@reviewjournal.com or 702-387-2919. Contact Review-Journal Capital Bureau Chief Ed Vogel at evogel@ reviewjournal.com or 775-687-3900.