Arberry’s sweet deal probably can’t shield him from IRS audit

Why isn't the Internal Revenue Service going after him?

That was one of the most asked questions after former Assemblyman Morse Arberry Jr. admitted in October that he put $121,545 in 2008 campaign funds into his personal bank account, which is against even Nevada's pathetic and impotent campaign finance laws.

The IRS probably will audit Arberry, whose attorneys negotiated a sweet deal. Six felonies were negotiated to a single misdemeanor because of the feeble laws weakened by legislators. His sentence: six months of probation, a $1,000 fine and paying restitution.

The same question came up after four Clark County commissioners were convicted in a political corruption case formally known as Operation Cat Call, in honor of the feline names of the topless clubs investigated (Cheetah's, Jaguars and Leopard Lounge) and the case's reliance on telephone calls.

The case involved $550,000 in bribes either paid or offered by topless club operator Michael Galardi to county commissioners to obtain favorable zoning for the clubs.

The Arberry question prompted me to look for liens in Clark County Recorder Debbie Conway's office.

Records confirmed the IRS audited former Clark County Commissioners Erin Kenny and Dario Herrera and their spouses.

Public documents showed tax liens totaling $381,109 were filed against John and Erin Kenny for the tax years 2005, 2006, 2008 and 2009. Her attorney Frank Cremen said that she told him those liens were not connected to the case and that they are business liens. Any IRS debt she owed in connection with the criminal case has been paid, he said.

That makes sense since the bribery occurred between 2001 and 2003.

IRS liens totaling $139,389 were filed against the Herreras for the years 2004, 2005 and 2006. The 2004 lien for $37,939 was released, meaning it was paid. Those liens also are identified as "small business/self employed."

On top of the IRS lien, Erin Kenny has a lien indicating she hasn't paid off the $130,041 she owes in fines and restitution as part of her federal sentence. Cremen said she is making monthly payments on that debt. She works without pay for her husband, a self-employed chiropractor.

A lien filed against Lance Malone, the county commissioner turned bribe-carrying bagman for Galardi, had been lifted. Apparently, Malone had $300,000 to pay his judgment. I found no IRS lien filed against Malone or former Commissioner Mary Kincaid-Chauncey, so either they didn't owe the IRS, or they paid up.

Kenny, Malone and Galardi all pleaded guilty, and jurors convicted Herrera and Kincaid-Chauncey.

The point is, if the IRS audits a taxpayer for not paying taxes and finds a debt owed and it's a civil action, it only becomes public if the taxpayer doesn't pay.

Back to Arberry. The IRS filed a lien against him for tax year 2006 when he owed $5,400. He paid it off, and the lien was released in November 2008, the year he misappropriated from his campaign account.

I'm sure it won't be the last action the IRS takes against Arberry. But we may not know details, just as we don't know the commissioners' details.

Another twist. Ask the U.S. attorney's office whether the fines have all been paid by the five defendants in Operation Cat Call and they know, but won't tell. Although it makes no sense to me, apparently an individual's right to privacy extends to whether they've paid their criminal fines.

The Reno Gazette-Journal challenged that, and in 2006 some federal judge named Brian Sandoval upheld that the names of those who pay or don't pay their fines are protected by federal privacy laws.

If their probation officer finds they have resources and aren't paying, the U.S. attorney's office can file a motion to revoke probation, which would be public.

That presumes someone looks for it.

Jane Ann Morrison's column appears Monday, Thursday and Saturday. Email her at Jane@reviewjournal.com or call her at (702) 383-0275. She also blogs at lvrj.com/blogs/Morrison