Assemblyman backdated documents in Med Lein loan

David Gardner hasn't been an attorney long, but he's already making a name for himself in the local legal community.

He's also enjoyed political success, winning the Assembly District 9 seat as part of the Republican Party's drubbing of the Democrats in 2014. Political junkies may remember Gardner as the voice of sound legal opinion as a guest on fellow Republican Assembly member Michele Fiore's fiery radio talk show, "Walk the Talk."

But these days Gardner finds himself walking a fine line, talking under oath, and answering ethically sticky questions in a litigation brought by attorneys for a local children's charity against a sketchy medical lien company owned in part by Nevada Republican Party Chairman Michael McDonald.

Court documents produced on behalf of the Miracle Flights for Kids nonprofit by attorney Peter Christiansen show McDonald was secretly involved in Med Lien Management while also serving on the charity's board when it voted to approve the $2.2 million loan.

McDonald said he paid taxes on all money received from the lien company and abstained from voting to approve the loan. He denied influencing the vote or introducing the company to the charity. The loan went into default in 2014.

Gardner has represented the company in a limited capacity. In a deposition taken Tuesday, he described crafting and backdating three Med Lien documents at a time the company had spent the loan proceeds, was failing to make interest payments to the charity, and was tanking financially.

There's no evidence Gardner knew of the company's financial condition, but if he was curious, all he had to do was ask others the Pengilly firm, which has represented Med Lien since before he was hired.

As long as the purpose isn't meant to defraud or deceive, a State Bar of Nevada attorney spokesman explained Thursday, it's not illegal or necessarily unethical for a lawyer to backdate documents. Complicating matters for Gardner is the fact his deposition was take as part of an expanding civil case alleging fraud by the lien company.

Gardner was hired by the Pengilly law firm in January 2014 as he ramped up his Assembly campaign. Gardner celebrated victory that November. By December, according to his deposition, he began working for Med Lien. Although he admitted he'd performed unspecified legal work for McDonald before, from December 2014 through January 2015, Gardner's role was to make final documents that separated part-owner Lincoln Lee from the company and transferred his one-third interest to McDonald and Brad Esposito.

Instead of accurately filing the company operating paperwork, Lee's $326,000 loan agreement and promissory note in December 2014, Gardner backdated the documents to Nov. 1, 2013.

"It's done quite a bit in civil actions, where you're writing a contract," he said Friday. "... You can't do it for a fraud. You can't do it for some kind of criminal action."

But legal websites also warn that backdating is "tricky business" and can have unintended consequences if it facilitates advantages that wouldn't have occurred otherwise. In many cases, uslegal.com warns, "Backdating in most circumstances is considered fraudulent and illegal. Sometimes, it is taken as legal and beneficial."

In a Friday interview, Gardner said he cooperated as fully as his role allowed, adding "Med Lien, Brad Esposito and Michael McDonald have claimed their attorney-client privilege."

It's also true that attorneys for Med Lien, Esposito and Lee have admitted in court documents they are in breach of the agreement and owe the charity more than $3 million. It's Miracle Flights' attorneys job to find it.

Gardner, who began practicing law in late 2011, may have been nothing but professional, but he appreciates the perception McDonald's connection to the litigation has created.

"In politics, appearance is everything," he said. "Two years down the road is two years too late in politics. I think politics is a story of now, and we won't know for sure what happened for a minimum of six-plus months. I would be surprised if it happened before then.

"... Perception is reality in politics. Who knows what's going to be the perception?"

Complicating that perception is McDonald's behavior as the state's party's leader, and Esposito's crowing in a letter to Med Lien investors dated January 25, 2014, that he was moving the company to State Republican Party headquarters and was also serving as "Fundraising Director and Senior Advisor to the Chairman." In addition, it was reported last week that McDonald's worked since July a "senior deputy" to state Treasurer Dan Schwartz at a annual salary of approximately $95,000. Schwartz is McDonald's former financial director.

"I don't think there will be any kind of special fallout for me," Gardner said. "I just happen to be the only elected official."

Perhaps. But it's hard to imagine McDonald's Med Lien mess being good for Gardner's legal or political career.

John L. Smith's column appears Sunday, Tuesday, Wednesday, Friday, and Saturday. Reach him at 702 383-0295, or jsmith@reviewjournal.com. On Twitter: @jlnevadasmith.