Funds approved to hire firm to prosecute Krolicki

CARSON CITY — The state Board of Examiners voted 2 to 1 Tuesday to spend $415,000 to hire a Las Vegas law firm to prosecute Lt. Gov. Brian Krolicki.

Attorney General Catherine Cortez Masto, a board member, supported the expenditure, although she said the outside legal help might be unnecessary because a judge’s order that prevents her office from prosecuting Krolicki might be voided.

Within a half-hour of the board’s decision, District Judge Elissa Cadish recused herself from the Krolicki case because of a possible conflict of interest. The case was assigned to Judge Valerie Adair.

Cadish had disqualified the attorney general’s office from the case because it had advised Krolicki on the college savings program at the center of the criminal case. The attorney general’s office challenged her ruling, and the Nevada Supreme Court will hear the appeal Aug. 31.

Because of Cadish’s order barring her office from the case, Masto told Gov. Jim Gibbons and Secretary of State Ross Miller they should hire Gordon & Silver Ltd. to prosecute Krolicki.

Prominent defense attorney Dominic Gentile, a member of the firm, might be the lead lawyer in the case.

Krolicki is fighting two felony charges that he misappropriated state funds while serving as state treasurer. If convicted, state law requires he be stripped of his job.

Authorities have charged Krolicki and his chief of staff, Kathy Besser, with misappropriating about $6 million in fees earned by the state’s college saving program by not depositing the money in the state general fund.

Cadish recused herself after learning last week that a Carson City lawyer who represented Krolicki in the initial phases of the investigation was a partner at the law firm where she worked at the time. Both Scott Scherer and Cadish worked for the firm Hale Lane, where Cadish was a shareholder until she was appointed to the bench in August 2007.

Cadish had asked lawyers in the case to let her stay on despite the potential conflict. The defendants agreed to keep her, but the attorney general’s office did not.

Under court rules, district judges must disqualify themselves from cases if they worked at the same firm at the same time as lawyers who represent clients before their courts, Masto said.

The rules also state any rulings by judges in such instances are void, Masto said, but she later said she wasn’t sure whether Cadish’s previous rulings would be voided.

Before Cadish resigned from the case, Masto emphasized that she would not have Gordon & Silver do any work if the judge recused herself and her rulings were voided. There is a 30-day escape clause in the contract with the law firm.

Gibbons voted against the contract, saying the board should wait until a decision was made on whether Cadish’s rulings were void.

During the same meeting, the Board of Examiners voted unanimously to approve contract changes and extensions for Upromise, the company that runs the state’s college saving fund program and allegedly held funds that should have been placed in state coffers during Krolicki’s administration.

The company has agreed to state Treasurer Kate Marshall’s requests to give Nevada additional benefits, even stationing a full-time employee in Nevada, according to a treasurer’s office representative.

Review-Journal reporter Francis McCabe contributed to this report. Contact reporter Ed Vogel at evogel@reviewjournal.com or 775-687-3901.