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Gibbons gives order to hire funds director

SPARKS -- Gov. Jim Gibbons defied a legislative decision and issued an executive order Friday to allow him to hire a federal stimulus funds director who will work in his office.

The governor said that if legislators do not like what he is doing, then "Let them sue me," during a news conference at the Nevada Department of Agriculture headquarters.

Hours later, legislators, who had previously directed the state controller's office to handle the job, said they would not sue. They said a lawsuit only would delay getting the funds quickly into the hands of jobless Nevadans.

"We don't want to be in court," said Assemblywoman Debbie Smith, D-Sparks. "We don't need to sue each other. We need to get these funds to the people who need them."

While highly critical of Gibbons, Senate Majority Leader Steven Horsford, D-Las Vegas, said the governor can appoint the funds director.

But that person needs to follow state law and legislative decisions and report stimulus spending information to the controller, he said.

"This system of checks and balances is important because there is no evidence ARRA (American Recovery and Reinvestment Act) funds will be properly disbursed by a governor who proposed an unworkable state budget and was absent from the legislative process," Horsford said.

"Governor Gibbons has failed to show leadership since he was elected, and too much is at stake to expect him to provide it now," he said.

State agencies must file reports with federal agencies by Oct. 10 on how they have spent stimulus funds.

If money is not spent as intended, then additional funds can be withheld until the state takes corrective actions. That happened last week with $28 million in transportation dollars for Georgia.

The partisan dispute between Democrats and the Republican governor was set off Aug. 3 when, on a party-line vote, the Legislature's Interim Finance Committee rejected a Gibbons request to put the so-called stimulus "czar" in his office.

Instead the Democrat-led committee authorized spending $257,000 to hire a stimulus funds manager and an assistant who would serve in the office of state Controller Kim Wallin, who also is a Democrat.

Democratic legislators said having Wallin oversee the expenditures would provide a good check and balance to ensure funds are spent as the federal government intended.

That decision angered Gibbons, who ordered state agency directors not to meet with Wallin at a meeting earlier this week and prompted his decision to call the Friday news conference.

The state, local governments and taxpayers are scheduled to receive $2.2 billion in stimulus funds, of which about $500 million already has been received.

Reached at a conference in Michigan, Wallin said she still intends to hire the two employees, perhaps as early as next week. She will wait and see whether the governor and his stimulus director cooperate with her office on stimulus matters.

"My goal is to make sure all rules of the economic recovery act are done in a timely manner and the agencies report correctly to the federal government," Wallin said.

She added, "I don't know what Washington is going to think when they see all of this stuff."

As the constitutional officer who oversees state spending, Wallin said she worked in a cooperative relationship for months with Mendy Elliott, whom she called "Gibbons' stimulus czar." She said she hopes whoever the governor names will act in the same manner.

Elliott was removed in July as Gibbons' deputy chief of staff and now works for another state agency.

During the news conference, Gibbons said the Recovery and Reinvestment Act gives him control of stimulus funds and the legislative actions "usurped my authority." The governor is a lawyer.

Lorne Malkiewich, administrator of the Legislative Counsel Bureau, agreed that federal law gives governors authority over the funds, but added that the law ends with the clause "unless state law provides otherwise."

"State law does provide otherwise," Malkiewich said.

Malkiewich said Nevada governors by law must go through the Interim Finance Committee for approval of changes to programs and for acceptance of all grants.

But that is not how Gibbons sees it, according to state Budget Director Andrew Clinger.

"The governor's office is telling me, based on the federal legislation, that we don't need IFC approval," Clinger said.

Clinger said he will give information to the controller's office, but Gibbons' funds manager, not the controller, will oversee that state agencies file the appropriate reports with federal agencies.

"I am done with partisan politics," Gibbons said during the news conference.

He said the stimulus law permits 5 percent of the allocations to be spent on administrative costs. He said he would use some of that money to hire the funds director.

Contact reporter Ed Vogel at evogel@reviewjournal.com or 775-687-3901.

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