Donald Davidson was awarded a $100,000 bonus when he successfully lobbied Clark County commissioners to change the zoning on a five-acre parcel from residential to commercial in 2001, a local land broker testified Monday in federal court.
Tommy Fehrman, the man who was buying the land, said he had forged the bonus agreement with Davidson in advance.
When Fehrman tried to hand over the “success fee,” however, Davidson directed Fehrman to send the check to his son, Lawrence Davidson, Fehrman testified.
A 2005 indictment charges the elder Davidson with paying then-Clark County Commissioner Erin Kenny $200,000 for her assistance in changing the zoning on the property where a controversial CVS Pharmacy was later built.
The indictment says Lawrence Davidson, who was then a lawyer, established a trust fund to hide the illicit payoff from his father to Kenny.
Donald Davidson, 73, is on trial on federal charges of conspiracy, mail fraud and money laundering. His son, Lawrence Davidson, was charged with conspiracy in connection with setting up the trust. But he failed to show up for his trial in October and has yet to be found by authorities.
During opening statements Wednesday, Donald Davidson’s attorney Dominic Gentile predicted that Fehrman would say Davidson told Fehrman to send a check to Lawrence Davidson. Prosecutors allege the check was later deposited in Kenny’s trust, an installment of the $200,000 she was due.
“We will demonstrate that was not the case,” said Gentile, who will likely have an opportunity to cross-examine Fehrman today.
Fehrman said he hired Davidson in the spring of 2001, when he was in negotiations to buy the 5-acre parcel at Buffalo Drive and Desert Inn Road. The sale of the land was contingent on the zoning change. Fehrman said he purchased the property for $800,000 but estimated that the value would skyrocket to $2 million with a commercial zoning designation.
Land use attorney Chris Kaempfer warned Fehrman that getting the zoning of the land changed would be difficult because neighbors of the property strongly opposed it. Fehrman explained that residents had opposed a temporary Christmas tree lot on the empty land.
“The neighbors were very uptight. They were being really unreasonable,” Fehrman said.
Fehrman hired Kaempfer and paid him about $350 an hour to lobby elected officials on his behalf. But he said he felt he needed everyone he could muster to fight the opposition. Davidson was fresh off a contentious yet successful battle to defeat residents who opposed a casino in the Spring Valley neighborhood.
“Don had a reputation; he was able to pull off the Spring Valley casino deal. His track record spoke for itself,” Fehrman said. “I thought he could be an asset to me on this project because I knew it was going to be an uphill battle.”
A 2006 indictment charges Davidson with paying Kenny $3,000 a month for nearly three years she voted against her constituents and in support of the Spring Valley project. To thank Kenny for her vote, the government alleges Davidson delivered the money on behalf of the Canadian-based Ghermezian family, the project owners.
Fehrman agreed to pay Davidson $100,000 and 15 percent interest in the land, an investment Fehrman said was worth $300,000. Assistant U.S. Attorney Daniel Schiess questioned why Fehrman would pay Davidson $400,000 to simply meet with elected officials, a task that was already being handled by Kaempfer.
“The way I saw it, I had nothing to lose. It was going to be a very intense zone change,” Fehrman said. “Basically, I brought in everyone I knew.”
As Fehrman sought his zoning change, he was approached by representatives of CVS Pharmacy in June 2001. The stakes were now higher: In order to execute the sale, not only did the zoning on the property have to change, but he had to convince commissioners to make exceptions to county code to allow for larger signs and a driveway off of a residential street.
If Fehrman succeeded, CVS had agreed to buy 1.5 acres for $1.5 million. The deal also allowed Fehrman to hold onto 3.5 acres for office buildings, also a lucrative use.
On Nov. 7, 2001, commissioners changed the zoning on the property to commercial. On Jan. 16, 2002, the board approved the request for larger signs and the driveway.
Fehrman awarded Donald Davidson another $100,000 for pushing through the “special use permits” that provided CVS with the amenities it demanded.
Fehrman testified that at Donald Davidson’s urging, he hired Lawrence Davidson to help with the zoning change application. The younger Davidson accompanied Fehrman to a town board meeting, temporarily taking over a role that typically belonged to Kaempfer.
“I was not impressed,” Fehrman said of Lawrence Davidson’s services. “I think I was his first go-around.”
Fehrman paid Lawrence Davidson $2,000 for the appearance, but had little contact with him after the meeting.
He added that Donald Davidson was constantly attempting to find work for his son, who Fehrman said Davidson described as a “struggling attorney.”
When Donald Davidson asked Fehrman to write his $100,000 check out to his son, Fehrman said he did not find the request suspicious. He knew Lawrence Davidson served as his father’s lawyer and the elder Davidson frequently discussed various business ventures in which he hoped to invest. Fehrman assumed the money was put aside for that reason.
Fehrman was to return to the stand this morning in U.S. District Judge Roger Hunt’s courtroom.