With gold prices high and holding, the mining region of northeastern Nevada is in deep clover. Money is being tossed around.
Southeast of Elko sits the crossroads of Lamoille, lovely ranch country with good grass and striking views of the nearby snow-capped Ruby Mountains. There’s a minor land boom in Lamoille, as those who can afford to do it buy little parcels of that ranch land — 40 acres or so — with an eye toward a gracious retirement.
Former Nevada Judge Jerry Carr Whitehead — once thought of as state Supreme Court material, till he ran into a few legal complications of his own — owns a nice spread there. About a year ago Gov. Jim Gibbons and his now estranged wife Dawn bought 40 acres of the Whitehead ranch for the modest price of $575,000.
Once such land gets developed with million-dollar homes, property taxes can be substantial. If those who still use the land for agricultural purposes had to pay that same “residential” tax rate per acre, the taxes would essentially shut down the ranching business. So the law in its wisdom allows a lower property tax rate for land still kept in agricultural use. Gov. and Mrs. Gibbons may have believed that so long as their neighbor Judge Whitehead still kept a few steers on the land they could keep paying that low tax rate — about $40 per year — rather than the higher rate at which 40 acres are assessed as a residential lot — along the lines of $5,000 per year.
But that’s not the way Elko County Assessor Joe Aguirre reads the law. To make sure the agricultural tax break goes only to legitimate farm and ranch operations, the law requires that a piece of grazing land generate at least $5,000 per year in grazing income, and be large enough to supply at least half the feed required for the animals grazing on it.
The Gibbons were assessed at the higher rate.
Mr. Aguirre — a 17-year elected Republican in good standing — says he was approached by the governor personally, last fall, seeking the lower tax rate. Mr. Aguirre says he told the governor the parcel was much too small to qualify. Next, Mr. Aguirre heard from John E. Marvel, son of long-time Republican Battle Mountain Assemblyman John Marvel. Mr. Marvel was acting as the governor’s personal attorney, again seeking the tax break.
The only problem is, John E. Marvel also serves on the state Tax Commission, a body that has authority over assessors, including Mr. Aguirre.
Asked for proof that the land was producing $5,000 in annual revenue, Mr. Marvel provided Mr. Aguirre with checks from Judge Whitehead to Gov. Gibbons totaling about $5,700.
Thus instructed on the law by a state official who has authority over such matters, Mr. Aguirre finally granted the tax break, though he says Mr. Marvel’s involvement made him feel “uncomfortable.”
Now Travis Brock, executive director of the Nevada Democratic Party, has filed a complaint with the state Ethics Commission against Gov. Gibbons and Mr. Marvel, alleging the men used their high positions to place improper pressure on Mr. Aguirre to grant the tax break.
Grazing leases in the area generally produce about $250 per year per cow, Mr. Brock argues in his letter to the Ethics Commission. The property in question “could — perhaps, at a stretch — produce enough for a few head of cattle,” Mr. Brock argues.
“At the high end, therefore, Mr. Gibbons’ property might generate approximately $750 to $1,000 in grazing lease income over a whole year” — a far cry from the $5,700 which Mr. Whitehead apparently paid Mr. Gibbons over a mere five months.
“Jim Gibbons did the worst thing an elected official can do,” Mr. Brock charges. “It appears he used his position as governor for personal gain, to get a tax break he didn’t qualify for.”
The question now is whether Gov. Gibbons and Mr. Marvel sought to use their high positions of trust to pressure Mr. Aguirre to “see things their way.”
But beyond that, if those $5,700 worth of checks were ginned up to win the tax break — not pursuant to any previously executed grazing lease — fraud is a possibility, and fraud to avoid legitimate taxes is a crime.
Should Gov. Gibbons have structured his deal differently, perhaps acquiring an option on the land while leaving it part of the ranch at its former, lower tax rate? He may wish he had done so. But the governor must explain what he actually did, not what he “could have/should have done.”
The governor should be more than “barely within the law.” He should avoid even the appearance of seeking benefits from his office — he should go out of his way to avoid causing a public official in good standing such as Mr. Aguirre from sensing that he’s under a full-court press, from wondering what repercussions he might face from merely doing his duty in a way that obviously makes the governor unhappy.
Mr. Brock’s motives here are transparent. He is a fierce partisan, hoping to open a wound and draw blood from a sitting Republican governor. He joins other Democratic partisans who have barked themselves into a mouth-foaming frenzy “charging” the governor with such bizarre perceived “offenses” as keeping his solemn pledge not to raise taxes, contending he cannot execute his office because he and his wife are considering divorce, etc.
Most of that stuff has been utter malarkey, churned out and tossed at the wall to “see what might stick.” It would be tempting to wrap the matter of the tax on the Lamoille land into that same bundle.
But that would be wrong. These charges are credible and discouraging to those who hoped for a higher standard of behavior. The governor has some questions to answer.