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When Gov. Sandoval goes overseas, who picks up the tab?

CARSON CITY — Gov. Brian Sandoval during his first term in office led several trade missions to far-flung locales — China, South Korea, Mexico and Israel — in an effort to elevate Nevada’s status in global markets, drum up business and provide the state’s anemic economy a booster shot.

But his trips weren’t financed by state government. Instead, a nonprofit group, formed outside government bureaucracy but under the eye of economic development officials, was footing the bill.

The nonprofit, Success Nevada, incorporated in the fall of 2012, uses a mailing address for the Governor’s Office of Economic Development in Las Vegas but is not part of state government, the agency’s executive director, Steve Hill, told the Review-Journal.

“We didn’t form Success Nevada, but we asked others to do that,” Hill said. “If we had set it up inside of GOED, we would have needed legal authority to do that. What we did was recruit a board and asked them to do it.”

Hill on Tuesday said the concept of Success Nevada was addressed in a bill passed by the 2011 Legislature and allows the agency to accept gifts, grants and donations to supplement economic development efforts, and was mentioned in the State Plan for Economic for Economic Excellence in Economic Development.

Sandoval led trade missions during his first term to China and South Korea in 2012; Mexico and Israel in 2013; and Canada in 2014. None of those trips was reported on Sandoval’s annual financial disclosures.

State law says elected officials should report gifts from a single person or an organization with an aggregate value of more than $200 on an annual disclosure statement. A guide put out last year by former Secretary of State Ross Miller listed travel, lodging, food or registration expenses as examples of things that should be reported.

But the law doesn’t provide teeth for enforcement or even a clear definition of what constitutes a “gift.”

Some officials, including lawmakers, have skirted reporting, sometimes on the counsel of lawyers, arguing that “fact-finding” trips are not gifts and need not be disclosed. In a recent example, four state senators who traveled to Israel courtesy of the American Israel Education Foundation in 2013 later amended their disclosure reports to include the expense-paid trip after questions were raised.

Sandoval’s office late Tuesday said the governor “received no personal benefits from participating in previous trade missions.”

“He was serving only in his official capacity as governor and chairman of GOED,” the statement said. “The success of the missions and the ability to meet with high level foreign cabinet and elected officials is directly tied to the governor’s participation.

“Trade missions help promote and acquaint foreign businesses and countries with the potential found in Nevada in a direct and meaningful capacity.”

Nevada’s arrangement with Success Nevada also raises questions about the state’s ability to fund its own government activities, said Sondra Cosgrove, president of the League of Women Voters of Las Vegas Valley.

“I think it does make the statement that there’s something wrong with state government when we can’t even finance our own economic development,” she said.

Success Nevada was set up as a 501(c)(6) tax-exempt corporation, with a stated purpose to “solicit and accept donations to support Nevada economic development,” according to papers filed with the secretary of state’s office. The IRS designation applies to business associations such as chambers of commerce or other industry groups.

An amendment to its articles of incorporation expanded its purpose to serve as a source of economic development by marketing economic growth for the state, financing economic development initiatives and underwriting trade missions.

Trustees include Richard Bryan, former governor and U.S. senator; Donald Snyder, former UNLV acting president; Philip Satre, former Harrah’s executive and current International Game Technology board chairman; Randy Garcia, CEO of Investment Counsel Co. in Las Vegas; and Barbara Smith Campbell, former chairwoman of the Nevada Tax Commission.

Campbell, now chairwoman of the Silver State Health Insurance Exchange Board, is Success Nevada’s president and secretary. She is also principal of Consensus LLC, a tax consulting business. Campbell did not respond to emailed requests for comment.

Since its formation, Success Nevada has raised just shy of $100,000, Hill said.

Two of the largest donors, NV Energy and the Nevada Mining Association, each have contributed $15,000, Hill said, adding that other donations are much smaller, running in the $1,000 to $2,500 range.

Contributors have not been formally disclosed, but Hill said a website listing individual donations is being developed and could be up by the end of the month.

 

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