MINUTES

of the meeting of the

State of Nevada Commission on Ethics

Thursday, February 13, 2003

9:00 a.m.

Office of the Nevada Commission on Ethics

3476 Executive Pointe Way, Suite 16

Carson City, Nevada 89706

(via telephonic conference)

These minutes constitute a summary of the above proceedings of the Nevada Commission on Ethics.  A verbatim transcript of the proceedings, prepared by a certified court reporter, is available for inspection at the Commission office.

Commission Members Present:  Todd Russell, Chairman; William Flangas, P.E., Vice Chairman; Merle Berman; Lizzie Hatcher, Esq.; Rick Hsu, Esq.; Jim Kosinski, Esq.; Thomas R. Sheets, Esq.;

Commission Staff Present:  Stacy M. Jennings, Executive Director; Nancy Lee Varnum, Commission Counsel; Beverly L. Amundson, Administrative Assistant

Parties Attending in Carson City:  Carolyn A. Bauer, Greg Miller, Jackie A. Holmgren, Marianne Stevens, Dennis Gomez, Doug Brozyna, Daniel Nightingale, David Holmgren, Merritt K. Yochum

Parties Attending via telephone:  Boyd Ballard, Daniel Cook, Christopher Hansen, Joshua Hansen, Jesse Harris, Sheila Nightingale, Justin Ramsaier, Sarah Weckerly, Joel Hansen, Esq.

Others Attending in Carson City:  David Schumann, Janine Hansen, Kenneth L. Bauer, Cy Ryan, Las Vegas Sun

Others Attending via telephone:  Lance Hinton

Chairman Todd Russell called the meeting to order at 9:00 a.m., Thursday, February 13, 2003.

Agenda Item 1 – Approve the Minutes of the January 16, 2003 Commission meeting.

In open session, the Commission discussed the minutes of the January 16, 2003 Commission meeting. A motion was made by Commissioner Sheets and seconded by Commissioner Berman to approve the minutes. The motion was put to a vote and passed unanimously.

Agenda Item 2 – Executive Director’s report on the status of 2002 candidates who filed with Commission information other than the specific information required under the financial disclosure requirements of NRS 281.561 and NRS 281.571.

In open session, the Commission discussed status of 2002 candidates who filed with Commission information other than the specific information required under the financial disclosure requirements of NRS 281.561 and NRS 281.571 for the following candidates:

Chairman Russell requested that the candidates listed above state if they were present and the public office for which they were a candidate.

Joel Hansen, Esq. and Christopher Hansen expressed concern regarding Commissioner Berman voting on Agenda Item 2. Chairman Russell affirmed that the concern would be duly noted.

It was confirmed that “good cause” as stated in Christopher Hansen’s statement and email would be included in the minutes as Exhibit 1. Each candidate was afforded the opportunity to testify before the Commission. Testimony proceeded with Joel Hansen, Esq. and Christopher Hansen reading into the record Exhibit 1. Merritt K. Yochum read Exhibit 2 into the record. Testimony continued with the following individuals continuing to read Exhibit 1 into the record: Doug Brozyna stated that he was relinquishing his time to Christopher Hansen, Carolyn Bauer, Greg Miller, Jackie Holmgren, and Daniel Nightingale. David Schumann, not a party to the matter, was afforded the opportunity to make public comment. Testimony continued with the following individuals continuing to read Exhibit 1 into the record: Dennis Gomez, David Holmgren echoed comments made by his wife, and statements made by Christopher Hansen and Merritt Yochum. Lance Hinton, not a party to the matter, was afforded the opportunity to make public comment via telephone. Daniel Cook and Sheila Nightingale made personal statements regarding their candidacy and provided the Commission with letters. Jesse Harris made personal statements to the Commission.

As a procedural matter letters from John Nightingale, Christopher Hansen, Dan Cook, Mark Holloman, and Patricia Saye were admitted into the record. (Exhibits 3, 4, 5, 6, and 7)

Joshua Hansen and Boyd Ballard made personal statements to the Commission.

Sarah Weckerly asked about the letters sent by her and her mother, Sheila Nightingale. Chairman Russell apologized and stated that they would be added to the record as well. (Exhibits 8 and 9)

Commissioner Kosinski commented: I don’t believe there is a jurisdictional issue.

I don’t believe that NRS 281.465 is intended to be exclusive. I think it merely relates to those issues that encompass the power of the Commission to issue opinions to either first person or third person opinions. The mandate from the Legislature to the Commission is clear.

I reviewed the constitutional issues that have been brought up by those requesting the waivers. I do not believe there is a First Amendment problem. I also do not believe there is a Fifth Amendment problem. There are no sanctions for filing the form. The sanctions are for the failure to file the form. And I don’t think that the Fifth Amendment is an issue.

I don’t feel I’m passing the buck, as somebody said, to a court. I believe the court may find me wrong some day, but today I believe that the statutes are constitutional.

I don’t believe good cause is an issue in this case because the persons who are before us today did not file a disclosure statement. If they had filed one, we might be wondering what good cause is in trying to make our determination as to whether or not to waive the penalty. But they have failed to file the forms, and for that reason, I would not agree to a waiver of the penalty.

Commissioner Hsu commented: I have looked at this again, and I hope that the legislators who are attending this meeting have noticed that and maybe can clean up some of the statutory language. I disagree probably with most of the Commissioners here that the candidates were not non-filers. I believe when the majority of them filed on May 30th a statement in response to financial disclosure statement and indicated that they were taking the Fifth, that that was proper, and in terms of that was what they could file and the public could look at it and they could make their own determination of whether or not this is a candidate who is worthy or not.

In my view, if they filed that type of statement on March 31st of the statutory deadline, there would not be any type of penalty to be imposed. When you look at the objectives of the financial disclosure statutes, it is not completely clear but other cases have said that it is to provide the public with information from which they can make informed voting decisions and predict and/or identify potential conflicts of interest.

If the candidate chooses not to take the Fifth and fill out that and file that with the Commission on Ethics, I think that’s a public record that someone can make comment on. That is the information that they have chosen to put out, and that’s something that the candidate’s opponent can bring up, and then it may or may not affect the election process.

I don’t see anything in our statutes that have the ability to determine the accuracy of the financial disclosure statements, the content or any type of other audit like functions. So there could be some candidate who completely lies on the statement and files it on March 31st and that would be deemed to have been filed.

The correction was made that the filing date for candidates was May 30th.

Commissioner Hsu continued: If the statutory deadline was May 30th, I think that they have a right to file a disclosure statement or statement in lieu of stating that they take the Fifth, and because we do not have those audit powers and we did not have the power to determine accuracy of this, and really we shouldn’t have that power, we don’t have the staff to do that, that is sufficient enough to comply with the statutes that the Commission has been required to enforce.

I could make the motion that for those four candidates who did not make the deadline, that we impose the statutory penalty based on their failure or untimeliness in filing, that there be no reductions because I don’t see good cause found. For the others, I do believe they filed it before the statutory deadline, and that there would be no penalty to be imposed.

Commissioner Flangas commented that he completely agreed with Commissioner Kosinki’s excellent recap on the position of the Commission. He also made the disclosure that Jim Barrier is his son’s client. Commissioner Flangas has never met him, and had no knowledge of his activities and said he would participate in the discussions because he could make a fair judgment.

Commissioner Sheets commented: I find some of what Commissioner Hsu has said to resonate with me, and it deals with an issue that I have struggled with as well, and that’s whether materials that were filed with the Commission constitute a filing or something else. I come down to a belief similar to Commissioner Hsu’s that in content they are different than other filings that we receive, but they are filings nonetheless. I’m inclined to agree with a substantial amount of the analysis of Commissioner Hsu.

Chairman Russell asked Commissioner Berman if she felt she could properly participate in this matter. She replied that she could properly participate.

Commissioner Hatcher commented: I believe that we definitely have jurisdiction in this matter. I believe that the statutes are constitutional. There was a question raised about good cause. I believe that the issue of good cause applies if one files late.

Commissioner Hsu, I differ with you. I don’t believe that what the candidates filed can be deemed to be a filing, and as such I don’t think they have an argument regarding good cause.

Chairman Russell commented: I have struggled with this matter, as have Commission Sheets and Commissioner Hsu. It has always bothered me from the standpoint that a filing has been made. When a filing has been made, the extent of the filing is what concerns me.

The statute is very clear in regards to what’s required to be contained in those financial disclosure statements, but what concerns me is the fact of whether or not the mere filing of them constitutes filing. If I filed the financial disclosure statement, have I met the statutory requirements and does the good cause provisions then require a determination for waiver of those particular penalties in regards to these individuals.

I think it’s a very confusing issue. I don’t think it’s clear-cut. My inclination has been this was the first time that we have ever looked into going after people who are candidates for office. I felt and believed throughout this process that our inclination was not try to preclude people from running for office, which I think that assessing huge fines would do. I don’t think that was ever the intent of the Legislature in regards to these particular matters.

Because these were first-time filings in regards to these individuals, and because of the fact that they did file, although they didn’t file the correct information, my inclination has always been that maybe the determination is that these individuals should go back, have an opportunity possibly to correctly file financial disclosure statements. If they choose not do so, then it would be a period of time in which they were given to do so, and that no fines would be assessed against any of them provided that these financial disclosure statements were properly filed and re-filed under the terms of the statute.

If they choose not do so, then the statutory provisions would apply. Although this doesn’t deal with the situation like Commissioner Hsu is raising that it is not up to us to determine what you file or don’t file.

I believe the statute is clear. I believe we have jurisdiction. I also believe that is has always been my reluctance to fine anybody who has made an effort or who at lease feels and believes that they are properly trying to comply with the statutes.

A motion was made by Commissioner Hsu and seconded by Commissioner Sheets that statements filed by May 30, 2002, even though the information wasn’t fully completed in those statements, be treated as filed on time and that no penalties be assessed against those individuals, but those individuals who did not file those statements until after that date would not be considered in the motion. The motion was put to a vote and failed 4-3; Commissioners Flangas, Kosinski, Hatcher and Russell opposed. Commissioner Kosinski commented that he believed the statutes require at least substantial compliance and he didn’t believe those filings are in substantial compliance. Commissioner Hatcher concurred.

A second motion was made by Chairman Russell and seconded by Commissioner Flangas that the filings in lieu of the financial disclosure statements that were made prior to May 30, 2002, be treated as a partial filing to the effect that the Commission acknowledge that an attempt was made by the individuals to file prior to the filing date; that those individuals not be assessed any fine provided that substantial compliance with the financial disclosure statements are filed and presented to the Commission within 30 days with the information required under NRS 281.571. The motion was put to a vote and failed 4-3; Commissioners Hatcher, Hsu, Kosinski and Sheets opposed.

Commissioner Kosinski stated his concern that the Commission may find themselves in an administrative nightmare. Commissioner Hsu agreed with Commissioner Kosinski.  

A third motion was made by Commissioner Sheets and seconded by Commissioner Hsu to direct Commission Counsel to institute a declaratory judgment action in the State District Court for Carson City to seek the Court’s construction of NRS 281.581 with respect to the requirements set forth in NRS 281.571. The motion was put to a vote and passed unanimously.  

Agenda Item 3 – Consider, deliberate, and decide an appeal of the Commission’s action with regard to a request for waiver or reduction of civil penalty for failure to timely file a candidate financial disclosure statement pursuant to NRS 281.561.

In open session, the Executive Director provided information to the Commission regarding the request of Lloyd A. Hargis for waiver or reduction of civil penalty for failure to timely file a candidate financial disclosure statement pursuant to NRS 281.561 by Lloyd A. Hargis.  

A motion was made by Commissioner Flangas and seconded by Commissioner Hatcher to waive the civil penalty imposed on Lloyd A. Hargis. The motion was put to a vote and passed unanimously.  

Agenda Item 4 – Executive Director’s Status Report of Legislative Issues.

In open session the Executive Director presented a report on issues concerning the Commission pending before the 2003 Nevada Legislature. She reported that the Legislature was not receptive to the idea of transferring the Commission’s budget into the Office of the Attorney General. It was reported that the bill concerning the Commission was ready for introduction to the Senate Committee on Government Affairs.

Agenda Item 5 -- Public Comment.

No public comment was made.

Chairman Russell adjourned the meeting at 11:21 a.m.

Minutes approved by the Commission on April 10, 2003.

By:  /s/ Todd Russell, Chairman