Legislator makes a statement with indictment joke

CARSON CITY — A Republican assemblyman joked Thursday that legislators should indict a top member of state Attorney General Catherine Cortez Masto’s staff because a legislative audit found the office committed minor violations of Nevada laws.

"We’ll indict Mr. Munro," quipped Assemblyman John Marvel, R-Battle Mountain, after a legislative auditor said the attorney general’s office had written off $8 million in debts without required approval of the state Board of Examiners. Keith Munro is the assistant secretary of state.

Marvel made his comments during a meeting in which the Legislature’s Audit Subcommittee reviewed audits of the attorney general’s office and other state agencies.

After the hearing, Marvel said he was joking, but wanted to make a point that he believes the recent indictment of Republican Lt. Gov. Brian Krolicki was politically motivated.

The attorney general’s office sought the Clark County Grand Jury indictment of Krolicki after an investigation spawned by a May 2007 legislative audit. That audit found that as state treasurer Krolicki, broke state law by allowing private contractors to retain $6 million in state fees earned on the Nevada College Savings Program.

While the contractors apparently spent the money on program expenses as Krolicki directed, laws required that the funds remain within the state accounting system.

Marvel pointed out that Krolicki has not been accused of converting any money to his personal use.

In an interview, Marvel said legislative auditors often find legal violations in their audits of state agencies, including the attorney general’s office, and yet no one else has been indicted on criminal charges.

"In every audit we review, there are legal violations," he said. "It’s difficult to comply with all our state statutes. The turnover (in state agencies) kills you."

Before he was indicted, Krolicki had complained that the move to punish him had been orchestrated by U.S. Senate Majority Leader Harry Reid, D-Nev., with Masto’s help.

Both denied his allegations.

Legislative auditors found the attorney general’s office has "substantially complied" with state laws, but needs to exert better control over financial activities.

In particular, the audit found the office failed to provide information on bad debts caused by extraditions as required by law in quarterly reports to the state controller.

Munro said the $8 million in bad debts are owed by criminal suspects who have been brought back to Nevada from other states since the 1980s.

"They are felons we are sending to prison," he said. "We have no mechanism to get the money from the folks."

Even if a law were passed to let them collect from these prisoners, Munro said, "You are trying to get money from people who have no money. It is a no-win process."

But an auditor said the attorney general’s office had written off bad debts without the required legal approval of the state Board of Examiners — on which the attorney general, governor and secretary of state serve.

In a written response, Masto accepted that finding and eight other recommendations from auditors. She promised new procedures on handling accounts receivable would be completed within six months.

Assemblywoman Sheila Leslie, D-Reno, said legislative audits are given to the attorney general and it is up to that office to determine whether legal action should be taken because of violations.

Marvel, a 30-year Assembly member, lost a bid for re-election on Nov. 4 to Assemblyman Don Gustavson, R-Sparks.

He is permitted by law to serve on the subcommittee until the next regular legislative session in February. The meeting has no other meeting planned before then.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.