Jun.07, 2010

A former professional gambler, a taxi company magnate, a telecommunications lobbyist, and a giant tobacco company are among the top lifetime givers to Senate Majority Leader Harry Reid, 70, of Nevada, who faces the toughest re-election race of his political career.

Those are the results of the Center for Public Integrity’s review of CQ MoneyLine information on Reid’s contribution history for campaign accounts and leadership PACs, dating back to his first successful congressional campaign in 1982. The Center’s inquiry marks the first in a series of stories on the top donors to Congressional leadership. Future articles will analyze the fundraising records of Senate Minority Leader Mitch McConnell, House Speaker Nancy Pelosi and House Minority Leader John Boehner.

In Nevada’s rough-and-tumble politics, Reid’s top backers include a heavy dose of the Nevada business community, especially in the casino and land development areas, and the telecommunications industry. Those business interests are balanced by sizable support from organized labor and trial lawyers.

That 1982 campaign for the House cost Reid just over $500,000. How times have changed. With a hotly contested re-election battle on the horizon this November, Reid’s campaign committee spent more than eight times that amount in 2009 alone.

All told, Reid has raised more than $42 million over nearly three decades, including more than $6.5 million for the federal version of his leadership PAC, the Searchlight Leadership Fund. Representing a swing state like Nevada — in four of the last five presidential elections the state has been won by a margin of less than four points — Reid has needed almost every penny. The former middleweight boxer is currently in the political fight of his life, trailing in virtually every public poll when matched up against his likely November opponents.

But he has also earned the appreciation of his Senate Democratic caucus colleagues by spreading his wealth around; he has helped ensure their loyalty and a majority by giving contributions from the Searchlight Leadership Fund or his campaign account to all but one of his 56 caucus colleagues with past or current Senate campaigns. Indeed, the only candidate not to receive a contribution from Reid was millionaire Herb Kohl of Wisconsin, who almost entirely self-funds his campaigns.

Of Reid’s $42 million-plus in fundraising, more than $25 million came from individuals.

INDIVIDUALS

David B. Krone, 43, is the top individual donor to Reid with at least $35,000 in contributions. A former telecommunications executive and lobbyist, Krone has been a full time senior advisor to the majority leader since December 2008. Before that, Krone was described by Roll Call as one of a “remarkably small core” of insiders close to Reid. Krone joined Comcast Corp. as senior vice president of corporate affairs in 2007 after serving as executive vice president of the National Cable and Telecommunications Association (NCTA), the principal trade association of the cable industry, for five years. Krone lobbied on a number of bills for the industry, including a 2001 broadband access measure, which Reid cosponsored. In 2001, while working for lobbying firm Ryan, Phillips, Utrecht & MacKinnon, Krone was listed as a lobbyist for Duke Energy Corp. on two bills that Reid sponsored. One was an energy appropriations measure, which included an earmark for a geothermal energy project at the University of Nevada-Reno, and the other bill sought to establish a national commission on energy and climate change. Neither bill came to a vote. Through a spokesman, Krone denied ever lobbying for Duke Energy, but confirmed that he had lobbied on telecom issues while at the firm. Krone’s biggest contribution to Reid, however, may be the steep pay cut he took to work in the leader’s office. According to LegiStorm.com, his personal financial disclosure noted more than $5 million in salary, severance, and living reimbursements for 2008, before he joined Reid’s office. His salary as an aide to Reid: about $165,000 per year. Jim Manley, a spokesman for Reid, said that Krone “believes strongly in [Reid] and the causes he fights for.”

Reid’s second biggest contributor, with at least $31,300 in donations, is lobbyist Rita M. Lewis, 49, senior vice president of government relations for the same National Cable and Telecommunications Association (NCTA). Prior to joining NCTA, Lewis was a partner and top Senate Democratic lobbyist at The Washington Group and was political director for the Democratic Senatorial Campaign Committee. She also worked nine years as a key aide to Reid’s close friend and predecessor as Senate Democratic Leader, Tom Daschle of South Dakota. As a lobbyist, Lewis worked for a wide range of clients including Delta Air Lines Inc. and Freddie Mac, and at least one bill she lobbied on, the Comprehensive Immigration Reform Act of 2007, was sponsored by Reid. Lewis lobbied for Motorola Inc., in support of a portion of the proposed immigration legislation which would have increased the number of visas for highly-educated workers. The legislation was not enacted. In February 2009, while Lewis was at NCTA, the association wrote to Reid in support of measures in the economic stimulus legislation to promote broadband adoption, specifically advocating for National Telecommunications and Information Administration oversight of broadband funds. Lewis also lobbied on several broadband initiatives, including one to provide affordable broadband services throughout the country, which passed unanimously in the Senate and was signed into law in October 2008. Reid later joined with Commerce Secretary Gary Locke in March 2010 to announce a $4.7 million broadband expansion project that would bring computer centers to Clark County, Nevada. Lewis did not respond to a request for comment.

Phyllis Frias, 74, the widow of Las Vegas cab executive Charles Frias, ranks third with at least $31,000 in contributions. Ms. Frias has led Frias Holding Co., the largest operator of taxicabs in Nevada and owner of a limousine service, since her husband’s 2006 death. She also created A Cowboy’s Dream, an Alamo, Nevada, luxury bed and breakfast. Reid has long supported Nevada tourism, and was a vocal backer of the Travel Promotion Act of 2009, which he called a “great boon for Nevada” and for other U.S. tourism destinations. The new law created a nonprofit corporation to attract more overseas tourists to the United States. The corporation will be funded by a $10 fee on foreign travelers who do not need a visa to visit beginning later this year and by up to $100 million from the U.S. tourism industry. In a 2009 Senate speech, Reid honored Charles and Phyllis Frias, saying “Whether through their business endeavors or their philanthropy, the Friases have sought to improve their community and make life a little easier for their fellow Nevadans.” In the speech, he made multiple references to A Cowboy’s Dream, saying its future was “as bright as the neon Vegas Vic cowboy sign.” Frias did not respond to a request for comment.

In fourth, with at least $30,600 in contributions, is former professional gambler and used car salesman William T. Walters, 63, CEO and founder of The Walters Group, a real estate firm in Las Vegas. Now a golf course developer, Walters has been indicted three times for money laundering. In each instance, the indictment was dismissed before trial. A bipartisan spender, Walters donated to both Hillary Clinton and John McCain’s presidential bids. Walters has been criticized for close ties to city officials in Las Vegas. While Walters was under indictment, Reid joined a group of local politicians at a charity event Walters sponsored at his country club. In a report on Walters, the Nevada attorney general concluded that “There has been a consistent pattern of political and financial favoritism granted to Mr. Walters’s business entities by the City of Las Vegas.” The plain-spoken businessman once called Las Vegas City Council member Lois Tarkanian “dumber than a road lizard” for voting against his offer to buy land development rights from the city. It’s a comment Tarkanian’s son, Danny, is unlikely to forget, especially as he seeks the Republican nomination to run against Reid in November. Walters did not return calls to his office.

Reid’s fifth-highest individual donor, with at least $27,000 in contributions, is Fatih Ozmen, 52, the chief executive of Sierra Nevada Corp., a defense contractor based in Sparks, Nevada. Ozmen joined Sierra Nevada in 1981 and acquired the company in 1994 with his wife Eren, who is now company president. The firm has come under intense scrutiny for seeking no-bid contracts and spending upwards of $500,000 on lobbying efforts in its peak year of 2007. Most of its lobbying expenditures have gone to the PMA Group, the now-defunct lobbying firm at the center of recent pay-to-play allegations involving the House Appropriations Defense Subcommittee. Reid has consistently worked to secure funding for Nevada companies in the defense appropriations process, Sierra Nevada among them. In December 2009, Reid praised the enactment of an appropriations bill that included a $3.2-million project for Sierra Nevada to develop a system for unmanned military aircraft to avoid collisions. Reid also secured $9.5 million for Sierra Nevada projects in the FY 2007 defense budget. “Defense funding is crucial to protect the people of Nevada,” Reid announced in a 2006 statement. “This money will be used to develop new programs and continue current projects that keep our state and country safe.” Ozmen did not respond to requests for comment.

These five donors combined for more than $154,000, or 0.7 percent of Reid’s total all-time contributions from individuals.

PACs

Reid’s most generous backer over the years, with at least $133,650 in contributions, is AT&T Inc. This includes contributions from the corporate PACs of companies now part of AT&T, such as BellSouth, Cingular, and SBC. The telecommunications giant has good reason to like the Senate majority leader. In 1996, Reid, one of a small number of senators who had opposed the initial 1995 version, voted for final passage of the landmark Telecommunications Act. The bill’s deregulatory provisions allowed AT&T to return to the local telephone service market for the first time in decades. Common Cause decried the industry for “buying” the legislation. Reid also bucked the wishes of many in his own party by using his power as Senate Majority Leader to bring a controversial 2008 surveillance bill up for a vote. Reid claimed to oppose a key provision in the bill granting immunity to companies — including AT&T — that were being sued for aiding the George W. Bush administration’s warrantless anti-terrorism surveillance, but he was vital to its success. Though Reid voted against the provision and the overall legislation, the bill received a vote — and ultimately become law — because he chose to bring it to the floor. Through a spokesman, AT&T declined to comment for this piece.

In second place, with at least $110,450 in contributions, is the Laborers’ International union, which represents construction workers and public service employees. A major priority for the group is immigration reform, and its views closely match Reid’s, who authored an unsuccessful comprehensive reform bill in 2007 and supports a pathway to legalization for illegal immigrants. The Laborers opposed the 1993 implementation of the North American Free Trade Agreement; Reid was one of 38 senators to vote against it. The union claims NAFTA hurt its members and “further impoverished much of the developing world.” Additionally, Reid has worked to steer funding for school construction to Nevada, which he noted would “create jobs, especially in the hard hit construction industry.” Many of those jobs would undoubtedly go to Laborers’ International members, who have urged Congress to make “rebuilding America a national priority.” Laborers’ International did not respond to requests for comment.

With at least $104,000, the 1.6 million-member union American Federation of State, County and Municipal Employees (AFSCME) is Reid’s third biggest backer. Over his career, Reid has voted with AFSCME’s legislative positions more than 91 percent of the time, according to the union, and has backed it on every single vote since becoming majority leader. He has promoted the union’s agenda by supporting a minimum wage increase, increasing collective bargaining rights through the proposed Employee Free Choice Act, and expanding pay discrimination protections through the Lilly Ledbetter Fair Pay Act, which became law in 2009. He also authored unsuccessful 2007 legislation, backed by AFSCME, to allow the federal government’s Medicare program to negotiate with pharmaceutical companies for cheaper prescription drugs. In an interview with the Center, Chuck Loveless, AFSCME’s chief legislative director called Reid “a very strong friend of working people,” citing the senator’s support for health care reform and aid to state and local governments. “He has had a very solid voting record on the great majority of the issues we care about,” Loveless added, “and we stand with him.”

The American Bankers Association (ABA), with $102,896 or more in donations, is Reid’s fourth most generous supporter, but his record on issues of interest to the group is a mixed bag. The Democratic leader was a key force in passing the banking industry bailout of 2008, which the association strongly backed as “a constructive solution to the crisis we face.” Republican President George W. Bush thanked Reid by name for having “worked across the aisle to make vital improvements to the rescue package.” The ABA was less enthusiastic, however, about a credit card reform law enacted last year. Though the group told Reid in a letter it believed the bill would “necessitate reductions in available credit,” Reid joined 89 Senate colleagues in backing the bill. He said the bill “cleans up the fine print so consumers can’t get blind-sided by their credit card companies.” ABA spokesman Peter Garuccio told the Center that his group gives “to members on both sides of the political aisle, and that’s a matter of public record.”

Fifth place on the list belongs to the MGM Mirage, with $95,000 or more in contributions. The gaming, hospitality, and entertainment company owns several hotels and casinos in Las Vegas. Though his Mormon beliefs preclude gambling, Reid has been a staunch defender of the gaming industry — at least, in Nevada. “Gambling is a personal choice,” Reid said in a 1998 Salt Lake Tribune interview, “Gaming is a very difficult thing to control, and I have some misgivings about the spread of gaming. I do everything I can to protect Nevada’s No. 1 industry, but I have no obligation to protect gambling in other places.” MGM Mirage also co-owns CityCenter, a massive urban development in downtown Las Vegas, with Infinity World Development Corp., a subsidiary of Dubai World. When funding for the $8.5 billion project became imperiled, Reid came to the aid of his fifth-biggest PAC donor to ensure bank backing; his efforts earned not only continued PAC contributions but also a powerful endorsement. The CEO of MGM Mirage, James J. Murren, appeared in an October TV ad for Reid’s 2010 re-election relaying the story of Reid’s intervention. “That man called every CEO of every bank that I know and said, ‘look, this is important to my state; get it done,’” Murren says in the spot. “Now we’re going to open up CityCenter in December. We’re going to employ over 12,000 people. They would not have jobs today if not for Sen. Reid.” Reid also appears in the ad, saying “Some said I shouldn’t have pushed so hard. But with [thousands of] jobs at stake, I’d do it all over again.” Alan Feldman, MGM Mirage’s senior vice president for public affairs, said in an interview with the Center that the company is the largest employer and taxpayer in Nevada, and so it’s not surprising that MGM is a major supporter of state politicians. In regards to CityCenter specifically, Feldman said that Reid, along with the other members of Nevada’s delegation, helped contact banks when they would not return MGM’s calls and the project funding was in danger. “If [CityCenter] failed, it was way more than just MGM Mirage failing — it could have bankrupted the whole state. … How could [Reid] not make those calls?” Recent news reports have noted that MGM Mirage is facing new financial challenges as CityCenter apparently lost roughly $255 million in the first quarter of 2010.

In sixth place with at least $93,900 in lifetime donations is Altria Group Inc. The tobacco giant and parent of Philip Morris USA was one of more than a dozen co-sponsors that shelled out $25,000 each for an Indiana Jones-themed party honoring Reid and senior House Democrat Steny Hoyer during the 2004 national party convention. Altria also backed the Family Smoking Prevention and Tobacco Control Act in 2009, which Reid co-sponsored in the Senate. The bill, which gave the FDA the power to regulate tobacco products, was opposed by other tobacco companies who claimed Altria supported it in a move to lock up market share. The majority of Altria’s money has come since Reid became Senate Democratic Leader following the 2004 elections. Altria declined to comment for this story.

Seventh place belongs to Harrah’s Entertainment Inc., a Nevada institution that runs 15 casinos in the state. The gambling giant, along with the PACs from its properties such as Caesar’s Palace and Bally’s, has kicked in a minimum of $93,500 to Reid over his career. A 2002 inductee of the Casino Legends Hall of Fame, Reid served as chairman of the Nevada Gaming Commission from 1977 to 1982. In 2002, Reid joined forces with several gaming industry leaders, including Harrah’s chairman Phil Satre, to fight a federal government plan to turn Yucca Mountain into a repository for nuclear waste. The waste repository project has stalled since the Obama administration froze spending on the effort in early 2009; several lawsuits by other states and businesses are challenging the legality of the decision. In the wake of Hurricane Katrina, the House and Senate passed an $8 billion relief package of tax incentives that excluded casinos, among other “sin industries,” from receiving the benefits — including Harrah’s, which lost four Gulf Coast-based casinos in the storm. Reid attempted to block the legislation for singling out casinos, but “reluctantly supported” the unanimous consent agreement that passed the package. More recently, the economic stimulus bill championed by Reid had a major impact on his home state, and especially Harrah’s, which took advantage of a provision allowing the company to cut its debt by $3 billion while deferring capital gains taxes. In an interview with the Center, Jan Jones, a senior vice president of Harrah’s Entertainment, described Reid as “extraordinarily effective,” “sensitive to the industry,” and “very focused on Nevada.” Jones specifically mentioned Reid’s leadership on the Yucca Mountain issue (“the person who at the end of the day stopped Yucca Mountain was Harry Reid”) and the debt swap provision in the stimulus bill (“he kept thousands of Harrah’s Entertainment employees employed by restructuring the debt”). “There’s a lot of elected officials who are at different levels of how they deliver to their constituents,” Jones added, “and Harry Reid is at the very top of the list.”

The eighth-place donor is the Brotherhood of Maintenance of Way Employees – IBT (BMWE), a nearly 60,000-member transportation workers union and a division of the Teamsters, with at least $89,000 in contributions. Reid has been a vocal supporter of transportation-related development and says improving transportation infrastructure is one of his “top priorities.” Last year, Reid helped secure an agreement to extend high-speed rail service from Los Angeles to Nevada. Said Reid at the time: “High-speed rail not only … will reduce congestion on I-15, but it will also create jobs at a time when Nevada needs them the most, increase tourism and reduce our reliance on foreign oil.” Union spokesman David White told the Center the BMWE “contributes to Sen. Harry Reid’s campaign because of his strong support for working families, creating good jobs and progressive agenda in the Senate.”

In ninth is the International Association of Machinists, which contributed at least $88,250 to Reid’s committees. The 720,000-member labor union lists Reid as voting with them on 48 of 51 scored votes since March 1999, ranging from trade agreements with Peru to the Lilly Ledbetter Fair Pay Act, which lengthened the statute of limitations for pay discrimination complaints. Spokesman Matt McKinnon told the Center that Reid has “been with us on a lot of things.”

Finally, in tenth place is the American Association for Justice (AAJ), formerly known as the Association of Trial Lawyers of America, with $82,000 in contributions. A lawyer and committed foe of tort reform, Reid has been under fire for defending trial lawyers — so much so that in 2003 independent groups targeted him in a series of pro-reform ads. In 2009 the AAJ reportedly sought a tax break to allow plaintiff’s lawyers to deduct expenses up front for a case, rather than at the end; Reid reportedly supported the unsuccessful efforts. Reid isn’t entirely lockstep against tort reform; he co-sponsored a bill with then-Majority Whip Mitch McConnell to ban lawsuits brought by citizens against restaurants they claim made them obese. AAJ communications director Ray De Lorenzi said the bill “hasn’t been a major priority” for the organization. De Lorenzi added that the association “supports candidates that are committed to strengthening our civil justice system so that people can get justice in the courtroom and ensure wrongdoers are held accountable.”

More than $14 million of Reid’s overall fundraising came from political committees. Nearly $1 million of that came from just these ten donors, or almost 7 percent of his all-time total.

Jim Manley, a spokesman for Reid, declined to comment for this story, beyond his statement on Krone’s behalf.