Judge says attorney general can’t prosecute case

A judge has disqualified the state attorney general's office from prosecuting Lt. Gov. Brian Krolicki on felony charges that he misappropriated state funds while serving as treasurer.

District Judge Elissa Cadish ruled Tuesday that the attorney general's office can't prosecute Krolicki because it would create an appearance of unfairness and impropriety.

This is an "extreme case ... where disqualification of the entire Attorney General's office is warranted," she stated.

Nevada Attorney General Catherine Cortez Masto said she disagreed with Cadish's decision and is reviewing appeal options.

In a statement, she said the judge's decision now limits the powers of the attorney general.

"The Court's order decrees that my office can no longer prosecute public officers who commit offenses while in office," she stated. "This is a fundamental change to the laws of this state."

Cadish scheduled a June 3 hearing to decide what agency will prosecute Krolicki.

Krolicki on Wednesday said he was grateful to the judge for what he called the right decision.

"I'm extremely pleased that she ruled the attorney general's involvement was improper and certainly unfair," he said.

Krolicki is accused of misappropriating about $6 million in fees earned by the state's college savings program by not depositing it in state accounts, as required by law. His chief of staff, Kathy Besser, is also facing charges related to the college savings program.

The funds have been accounted for and Krolicki is not accused of embezzlement.

With the attorney general off the case, the district attorney's office could take over prosecution of the lieutenant governor, said Bill Terry, a prominent defense attorney and legal expert in Las Vegas. He has no direct involvement in Krolicki's case.

If the district attorney's office can't prosecute Krolicki, then a special prosecutor can be chosen to pursue the charges, he said.

In her eight-page ruling Cadish found there was a conflict, in part, because the agency's civil division had previously advised Krolicki on the very contracts in dispute. The attorney general's criminal division was prosecuting him.

Cadish stated that even the attorney general's office saw a potential conflict because it built a "Chinese Wall" between prosecuting attorneys and non-criminal attorneys who conducted a civil investigation into the college saving programs at the heart of the felony charges.

A "Chinese Wall" is typically an information barrier put between people making decisions at the same company or agency to prevent conflicts of interests.

Cadish said because of this setup the attorney general might not be able to provide to Krolicki's defense all the material it had.

A grand jury indicted Krolicki on two counts of misappropriation and falsification of accounts by a public officer and two counts of misappropriation by a treasurer.

Besser also was charged with being a principal to misappropriation and falsification of accounts and being a principal to misappropriation by a treasurer.

Besser served as Krolicki's chief of staff while he was treasurer. She is still his chief of staff. Cadish's ruling applies to her as well.

Both have maintained their innocence. Krolicki has said that the treasurer's office followed state law in how it administered the college savings fees. His attorneys argued that the attorney general's office advised the treasurer's office when the program was created.

Krolicki said he hopes the next person appointed to review the case "recognizes that the college savings program was carried out in accordance with the law and helped thousands of families."

Contact reporter David Kihara at dkihara@reviewjournal.com or 702-380-1039.