Nevada gets F grade in 2015 State Integrity Investigation

Gambling with voters' trust in the Silver State

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It seemed like a simple rule: don't get involved in a political campaign while serving on Nevada's Ethics Commission. After all, legislators created the commission as the main safeguard against misconduct by candidates and elected officials. To run for office while policing others would seem to be a clear conflict of interest.

But in 2014, no fewer than three of the commission's decision-makers decided to do just that, seemingly flouting the law and raising the question: who watches the watchdogs?

The controversy left many political observers in the state dismayed, but not necessarily surprised. Nevada's "anything goes" mentality extends beyond the glittering lights and dinging slot machines of Sin City. While the population has skyrocketed and become more diverse in recent decades, politics here continue to reflect the state's Wild West roots, with a strong libertarian streak and a part-time legislature that meets for just a few months every two years.

Key decisions about everything from budgets to pension oversight are made in unannounced, late-night meetings of legislators or by citizen board members and commissioners who earn only token pay and face little accountability.

The Silver State has made strides in putting government records online, and passed strong laws protecting whistleblowers and cracking down on lobbyists' wining and dining of lawmakers. But with a lax attitude toward verifying information provided by candidates and elected officials, a crippled ethics enforcement system and a legislature that basically polices itself, Nevada earns a score of 57, or F, in the State Integrity Investigation, placing it 46th among the 50 states. The investigation is a data-driven assessment of state government accountability and transparency by the Center for Public Integrity and Global Integrity.

Big business, small-time Legislature

Nevada's Legislature governs a state with a $120 billion economy that includes the epicenters of the country's gaming and gold-mining industries and one of its most-visited tourist destinations. Yet lawmakers are not subject to the same open meetings law that applies to local school boards and city councils.

With all of the state's business crammed into one biennial spring session, the pace of decision-making can become frenetic as deadlines approach. Lawmakers sometimes hold meetings without providing advance notice or agendas to the public, while exhausted legislative staffers struggle to keep up. Budget decisions between sessions are made with little fanfare by a small group of legislators.

"It's almost impossible to think about, with a part-time citizen legislature … how you could possibly get a good grade in managing the budget," said David Byerman, former secretary of the state Senate.

The legislature employs an auditor to dig into the finances of the executive and judicial branches, who has ferreted out safety problems at the state's juvenile detention centers and investigated long-hauling of tourists by state-regulated taxi drivers. But no one audits the legislature itself.

And while Nevada recently banned all gifts to lawmakers from the state's powerful lobbyists, those lobbyists still aren't required to report on their activities between sessions. The disclosures they do file aren't checked for accuracy, just one detail that helped earn the state a ranking of dead last in the category of lobbying oversight.

Nevadans value the freedom they enjoy under a limited government. There's no state income tax. You can buy medical marijuana in Las Vegas and canoodle with a prostitute in Pahrump.

But transparency advocates argue it's possible to retain much of that freedom while modernizing a legislature they describe as a relic of an earlier time.

"It's all the small Western states that have low population levels that have not been able to move from the 19th century into the 21st century," said Sondra Cosgrove, president of the League of Women Voters of Las Vegas Valley and a history professor at the College of Southern Nevada. "It benefits the people who actually run this state, the gaming industry and some of the political players, to have a part-time legislature and not have things work, because then they can control everything."

Under the radar

When Gary Lambert applied for a grant for his nonprofit, Nevada Trail Stewards, from the state's Commission on Off-Highway Vehicles in 2014, he might have thought it was a lock — Lambert was also the commission's vice-chair. But when he argued in favor of the application to his fellow commissioners, he did so without fully disclosing his relationship to the nonprofit, a violation of state ethics laws, according to a complaint filed with the Ethics Commission.

Lambert admitted to the violation and agreed to take state-provided ethics training, commission records show. Lambert couldn't be reached for comment. But current Nevada Trail Stewards chairman Scott Gerz said other commissioners were already aware of Lambert's interest in the nonprofit, and that he wasn't the only one to push for a pet project.

The commission has since updated its grant-making rules. But it's impossible to tell how many similar cases are out there, because Nevada does not require members of most of the state's dozens of boards and commissions to disclose their financial ties.

The Ethics Commission, which is responsible for monitoring these public servants, struggles with limited resources in addition to its own ethical problems. While former Executive Director Caren Cafferata-Jenkins resigned after her judicial campaign drew scrutiny last year, two commissioners who ran for office in apparent violation of state law continue to hold their seats.

One of them is John Carpenter, a former rancher who ran for the Elko County Commission, who said he didn't see any conflict of interest — even though state law says ethics commissioners may not "be actively involved in the work of any political party or political campaign."

"If I had got elected then I would've resigned immediately," Carpenter said. "The ethics commission is sort of a stand-alone commission and I don't think they are involved in politics like some other parts of government are. And I told people from the ethics commission that I was going to run for county commissioner and nobody said, 'You should not do this.' "

The Ethics Commission has only one investigator, and the commission's own 2014 annual report said current law makes it "nearly impossible" for it to cite offenders with the kind of willful violations that lead to fines.

"The Commission sees our mission first and foremost as education," said Executive Director Yvonne Nevarez-Goodson. "It's not our goal to be prosecutors and go out there and catch wrongdoing."

No-Bid Contracts

Decades may have passed since mobsters like Bugsy Siegel and Meyer Lansky built casinos up and down the Las Vegas Strip, but these days it's corporations that are making the state of Nevada an offer it can't refuse.

From administering healthcare programs to updating computer systems, companies won $1.7 billion in no-bid contracts with Nevada from 2011 to 2015, according to a Las Vegas Sun investigation. That's 27 percent of the total contracts the state awarded — thanks to legal loopholes that allow officials to bypass the state's normal competitive bidding process.

Even accusations of fraud and poor performance don't always prevent companies from receiving contracts. In November 2013, Nevada's Department of Health and Human Services signed a $130 million contract with McKesson Health Solutions to create a care management system for Medicaid recipients. The decision came a week after the company's parent corporation, McKesson Corp., had agreed to pay the state of Wisconsin $14 million to settle a lawsuit alleging that it had fraudulently inflated prescription drug costs.

Xerox Corp. lost its contract to manage the state's health care exchange website in May 2014, after the site was found to contain hundreds of glitches. Yet the company continued to receive state contracts, including a $7.8 million deal to audit unclaimed property.

"Especially if [a company] has long-standing ties to the state, one complete screw-up doesn't negate them getting another [contract]," said Kyle Roerink, the Sun reporter who covered the no-bid deals.

Some steps forward

Nevada has shined a brighter light on some government workings since 2012, when the state earned a 60, or D-, in the first State Integrity Investigation. (The two scores are not directly comparable, due to changes made to improve and update the project and methodology, such as eliminating the category for redistricting.)

Political candidates are now required to file their campaign finance reports online. A new cooling-off period, imposed by the Legislature in 2015, will slow the revolving door of former lawmakers returning as lobbyists.

Nevada ranks in the top half of states for executive accountability and the state budget process. Citizens can access an easy-to-navigate website that provides budget information down to the line-item level.

Technology has driven many of the improvements, with social media giving more Nevada residents an inside look at what goes on in the state's capital, Carson City, while the secretary of state's searchable campaign finance record database makes journalists' work easier.

Further progress, however, may depend on Nevadans' willingness to mobilize and demand more information about their government.

"This state is a good-old-boy network," said Michael Green, an associate professor of history at the University of Nevada, Las Vegas, and political columnist for Vegas Seven magazine. "They're going to be as transparent as they have to be, but not more transparent than they need to."

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