Nevada controller hires woman suing governor to oversee spending of stimulus funds

CARSON CITY — A former state budget auditor who has filed a federal lawsuit against Gov. Jim Gibbons was hired today by state Controller Kim Wallin to serve as a watchdog over how the governor spends federal stimulus funds.

Mary Keating was hired for a $102,000 annual salary to serve as Wallin’s reporting and accountability officer for American Recovery and Reinvestment Act funds.

Wallin said Keating, a 27-year certified public accountant, will make sure that the $2.2 billion in stimulus funds the state is receiving is spent as directed by the federal government.

“She will serve as a check and balance to Charles Harvey (Gibbons’ stimulus coordinator),” Wallin said. “Our office will ensure the information reported to the federal government is accurate.”

Wallin, a Democrat, said the hiring was not because of any desire to retaliate against Gibbons, a Republican who is seeking re-election, but because Keating was the best qualified person for the job.

Because Keating will oversee the work of Harvey and state and local agencies that receive money, Wallin said, her job is not duplicating Harvey’s work.

Keating last year filed a federal lawsuit against Gibbons over her dismissal as head of the Department of Administration division that audits the governor’s office.

She alleged in the lawsuit that she was let go by Budget Director Andrew Clinger because Gibbons believed she leaked information to the press that the governor had sent more than 800 text messages to a female friend.

That friend, Kathy Karrash, and Gibbons both have said their 15-year relationship was platonic, although in divorce documents, first lady Dawn Gibbons accuses them of an affair. The governor and first lady face a Dec. 28-31 divorce trial.

Some of the text messages sent by Gibbons to Karrash were made at 2 a.m. when he and Dawn Gibbons were living together in the Governor’s Mansion.

Gibbons also has been in a dispute with Wallin and the Legislature over the oversight of federal stimulus funds. He issued an executive order to hire former Clark County Assistant Recorder Harvey as his stimulus funds coordinator. Gibbons also directed state agency heads not to meet with Wallin.

The Legislature, however, authorized Wallin, who oversees all state expenditures, to hire her own stimulus funds manager.

The attorney general’s office issued an opinion that requires Wallin to release any stimulus funds as long as Gibbons deems an emergency exists and funds are needed to protect property. He has been making those declarations.

The Gibbons administration did not criticize Wallin’s decision to hire Keating.

“What other people do is other people’s business,” said Daniel Burns, Gibbons’ communications director. “The federal government says the stimulus program will be run through the governor’s office. We are singularly focused on improving the economy, in creating jobs.”

The administration has maintained that Keating was not fired but transferred to another state agency. She was working with the Department of Health and Human Services at the time she was hired by Wallin.

Only last Friday the federal government reported that Nevada has created or saved 5,667 jobs through stimulus funds.

The information the federal government relied on was sent by state agencies and local government. Wallin said Keating will review whether the information they sent was correct.

“I am very happy Mary Keating has agreed to accept the position of the ARRA Reporting & Accountability Officer,” Wallin said, “Her background and wealth of knowledge in grants management, financial reporting, analysis, auditing, budgeting, internal controls and cost allocation will allow her to hit the ground running in helping the state to report and accurately account for the ARRA funds.”

Contact Capital Bureau Chief Ed Vogel at or 775-687-3901.


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