EDITORIAL: McDonald cannot continue as state GOP chairman

It’s a wonder Michael McDonald hasn’t landed on the Las Vegas Strip as headliner, or at least as a magic show’s opening act. No political figure in the state has dived eagerly, head-first, into so many ethical swamps and pulled off escape after Houdini-worthy escape. Scandals that have landed other local elected officials in prison, or at least driven them out of public life, have allowed the state Republican Party chairman to walk away and plot all-new ways to enrich himself. Despite the slime that covers McDonald and trails his every step, someone is always happy to shake his hand and be part of his next self-serving deal.

But new allegations against McDonald, a former Las Vegas City Councilman and Las Vegas police officer whose line-crossing behavior is well-known to those who’ve lived in the valley a decade or more, should be more than enough to push him out of politics again. As impotent as the state GOP has been under McDonald’s charge, it has a central role in Nevada’s first-in-the-West presidential caucus. To have the party helmed by someone so disgraceful is an embarrassment to Nevada, one that could taint the 2016 caucuses as something far worse than an amateur-hour sideshow — and damage its eventual winner.

As reported over the past two months by Review-Journal columnist John L. Smith, McDonald is a key figure in a lawsuit filed by Miracle Flights for Kids, a charity that loaned $2.2 million to medical bill collection company Med Lien Management in 2013. Med Lien defaulted on that loan the next year without paying down a dime in principal and still owing more than $1 million in interest. Miracle Flights for Kids, through its attorney Peter Christiansen, claims Med Lien Management was a fraud scheme, and it’s easy to see why.

McDonald, no stranger to reaping benefits from serving two masters, was on the board of the charity while it was finalizing the loan and, according to documents, was a secret partner in the medical lien company.

It was a staggering conflict of interest. It was vintage McDonald.

McDonald says he didn’t know who introduced the charity to the business; he didn’t influence the awarding of the loan because he disclosed his friendship with Med Lien Management partner Brad Esposito to the charity’s board; he didn’t vote on the loan, because he wasn’t a partner in the company at the time of the loan; and he didn’t directly benefit from the loan. But documents and testimony in the lawsuit show otherwise.

Med Lien Management partner Lincoln Lee, who declared bankruptcy this year as a result of the debt to Miracle Flights for Kids, said in a deposition that McDonald was a 33 percent partner in the business and had received a $200,000 finder’s fee for scoring the loan. And a ledger obtained by Mr. Christiansen shows McDonald received a $140,000 “shareholder loan” from the company in 2014, less than two months after he resigned from the Miracle Flights for Kids board. McDonald says he didn’t receive a loan. He claims he began doing government affairs work for the business after leaving the charity board and reported the money on his federal tax return as income.

Longtime Las Vegans will recall that McDonald provided similar “consulting” services to Michael Galardi and Rick Rizzolo, former strip club owners who ultimately landed in federal prison, while he was a sitting councilman.

Among McDonald’s tamer transgressions as a councilman: brokering a huge monopoly contract extension for a Republic Services predecessor run by his friends; dating an employee of that trash hauler, allegedly at the time of the vote; and lobbying public officials to buy a financially troubled city recreation facility leased by one of his private “employers,” Larry Scheffler.

Guess who was president of the Miracle Flights for Kids board when it signed off on the loan to Med Lien Management? Scheffler. Guess where Med Lien moved its offices once the company had blown through the loan? Into the Nevada Republican Party headquarters, where Esposito worked as fundraising director and senior adviser to McDonald.

McDonald, who served nearly a decade on the City Council before being fired by voters in 2003, has survived as state party chairman since 2012 because the organization is so dysfunctional and incompetent. Think of Disney’s “The Lion King,” when Scar takes over the pride lands with the help of hyenas. The state party has no influence and no relationship with the state’s top elected Republicans. McDonald and his cronies deserve each other.

But it’s alarming to see this clown show counting down the days until they put on the state’s Feb. 20 presidential caucuses, an event that will put Nevada in the national spotlight for weeks. And McDonald will be shaking every candidate’s hand.

At the top of the state party’s website is a red button that reads “$ DONATE,” just above McDonald’s name. Donors would have to be stupid or ignorant to send McDonald their money.

McDonald should resign, but that’s not how he rolls. There are too many suckers in this town for him to play. So it’s up to Republicans to starve his outfit until he quits.

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