June 29, 2007 - 9:00 pm
Former Clark County Commissioner Erin Kenny, who complained last year that she was serving a sentence in a "public jail," revealed Thursday that Rhodes Ranch developer Jim Rhodes has been paying her $16,800 a month to work as a consultant.
Rhodes, one of Nevada’s largest homebuilders, offered Kenny a job in January 2003, after she surrendered her seat on the commission to embark on an unsuccessful bid for lieutenant governor. Rhodes initially paid Kenny $15,000 a month, according to her testimony.
After Kenny pleaded guilty to accepting bribes from strip club owner Michael Galardi and began cooperating with federal authorities in 2003, Rhodes upped her pay to $201,600 a year.
Kenny, who is awaiting sentencing, said she works on projects for Rhodes and provides him with advice on government services.
Kenny, 46, disclosed her payments from the prominent developer during her testimony as a witness for the prosecution in the corruption trial of real estate consultant Donald Davidson. Davidson is charged with paying Kenny $200,000 cash for pushing through a zone change and special use permit allowing for a CVS Pharmacy.
The federal government also charged him with delivering $3,000 a month to Kenny for three years after she lobbied in favor of a casino in the Spring Valley neighborhood.
Earlier Thursday, Kenny’s former accountant and campaign finance manager, Daniel Geiger, testified that Davidson wasn’t the only person from whom Kenny received payments. Geiger told jurors that Kenny also received $100,000 from Rhodes.
Geiger testified that Kenny withdrew money from her campaign coffers for her personal expenses. He explained that since Kenny began that illegal practice in 1998, he had reduced the amount of contributions to balance the books.
But at the end of 2001, Kenny’s campaign contribution report was off by $100,000.
"I told Erin, ‘At some point we’re going to have to deal with the fact that funds came out of the campaign,’" Geiger testified. "I told her I was short."
Geiger said Kenny called upon Rhodes, her most generous campaign contributor.
"She called Rhodes and said not all of his contributions were going to show up on the contributions report," Geiger said.
The matter wasn’t delved into further in court because Davidson’s lawyer Dominic Gentile objected to additional testimony as hearsay.
Kenny’s relationship with Rhodes was controversial when she was a county commissioner, from 1995 through 2002.
In 1997, Kenny and her chiropractor husband purchased a home in Rhodes Ranch. Throughout her term, her votes consistently favored the developer, and she once appeared at a county staff meeting to lobby in favor of a Rhodes project. Staff members told the media they believed the unusual move was an intimidation tactic.
Prosecutors did not question Kenny about her relationship with Rhodes, but they contend Kenny and Davidson forged an illicit relationship in about 2001.
Davidson was the vice president of Triple Five Nevada Development Corp., a company seeking to build a casino in the Spring Valley neighborhood.
After Kenny successfully lobbied for the project in January 2000, she said Eskander Ghermezian, a Canadian billionaire, visited her and explained he owed her "a life debt." Kenny said in about April of that year, she began creating brochures for Triple Five.
Davidson delivered $3,000 a month to her, even though she worked only about three hours a month, she said. She soon became ill and suffered from vertigo, which she later said has caused memory loss. She was bedridden for months.
"I became ill and didn’t work, but he didn’t stop paying me," Kenny said of Davidson.
From mid-2000 through 2002, Kenny and Davidson met monthly for coffee or breakfast, she said. Each time, he quietly slid an envelope full of cash across the table.
In 2001, Davidson sought a zoning change on five acres at Buffalo Drive and Desert Inn Road on behalf of land broker Tommy Fehrman.
Commercial zoning was critical to Fehrman, who stood to make $1.5 million in a sale of 1.5 acres to CVS Pharmacy.
Fehrman offered Davidson a total of $500,000 in incentives to lobby for the zoning change and a special use permit allowing for larger signs and a driveway off a residential street.
A 2006 indictment charges Davidson with paying Kenny $200,000 for her assistance in pushing through the zoning change. Kenny voted for the project without disclosing the payments she was receiving from Davidson.
During the Nov. 7, 2001, meeting where the zoning change was approved, Kenny chided opponents to the amendment. She spoke sarcastically about how some residents, who once objected to a new adjacent housing development, had joined forces with that very same group of homeowners.
Geiger told jurors Wednesday that he and Davidson’s son, Lawrence Davidson, established a trust account in the Cook Islands to hide the illegal payoff Kenny collected from the CVS zone change.
On Thursday, Kenny said she knew few details about that account.
In describing the account, Kenny spoke softly, displaying a demeanor far different from the feisty and sometimes arrogant attitude heard on the audio recording played in court.
"I didn’t want to know," she said of the off-shore account. "It was such a bad thing, I refused to look at it deeply. It wasn’t how I was raised and it wasn’t what I should have done."
Under Kenny’s plea agreement, she faces no more than five years in prison and must forfeit $70,000. Kenny, who pleaded guilty to wire fraud, bribery and conspiracy charges, testified last year that she has not paid taxes on the cash she pocketed. She never reported any of the illegal payments on her campaign finance disclosure forms, she said.
Last year, Kenny testified against her former colleagues Mary Kincaid-Chauncey and Dario Herrera, who were convicted of taking bribes from Galardi. Galardi and former commissioner Lance Malone, who served as Galardi’s bagman, signed plea deals.
Kincaid-Chauncey is serving 30 months in jail, Herrera is serving a 51-month term and Malone recently began a six-year prison term. Galardi, who received 30 months, is scheduled to turn himself in July 6.