FBI Ends Nevada Lobbyist Probe

Federal Bureau of Investigation
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The FBI is dropping a preliminary inquiry into alleged improper lobbying tactics at the 2003 Legislature and the two special sessions that followed as lawmakers fought over higher taxes.

The FBI confirmed Oct. 9 that it had started the inquiry. The Associated Press learned the agency determined since then that there's insufficient evidence to continue.

The FBI reportedly was checking into complaints that Harrah's, Harveys and Caesars Tahoe hotel-casinos at Lake Tahoe quit buying Budweiser products from Capital Beverages because of owner Kurt Brown's stance on major elements of the tax plan.

Gary Thompson, a spokesman for Harrah's and Harveys, later revealed contents of a July 8 letter that Harrah's Chairman Phil Satre sent to Brown. Satre wrote that his Lake Tahoe casinos would "no longer do business with an entity whose actions support a course that is detrimental to Harrah's financial interest and the financial interests of the state."

Brown opposed the controversial 0.25 percent gross receipts tax backed by much of the gambling industry and Gov. Kenny Guinn. In the end, the Legislature approved a record $836 million tax increase that included a 0.7 percent tax on company payrolls but no gross receipts tax.

Thompson said his company is pleased the FBI will not take any further action.

"It just confirms our opinion that we as a business have a right to do business with whom we please," he said.

Caesars Tahoe spokesman Robert Stewart said his company would not comment.

Brown didn't immediately return calls Monday to his Carson City office.

State officials said last week they did not think the retaliation against the beer distributor violated any laws or lobbying regulations.

Legislative Counsel Bureau administrator Lorne Malkiewich said he knew of no laws that would be broken if businesses refuse to do business with someone whose political stance they oppose. Tom Sargent, a spokesman for the attorney general's office, said he also could find no law "that would apply" in such an instance.