Reid Land Deal

Senate Democratic leader Harry Reid paid cash for a $750,000 condo at the Ritz-Carlton where he lives. But when he gave Christmas bonuses to the doorman and other support staff, he used campaign donations instead of his own money.

Federal election law bars candidates from converting political
donations for personal use.

Questioned about the campaign expenditures by The Associated Press, Reid's office said Monday his lawyers had approved them but
he nonetheless was personally reimbursing his campaign for the $3,300 he had directed to the staff holiday fund at his residence. His office said he got the money to buy the Ritz condo from an earlier house sale.

Reid also announced he was amending his ethics reports to Congress to more fully account for a Las Vegas land deal - highlighted in an AP story last week - that allowed him to collect $1.1 million in 2004 for property he hadn't personally owned in three years.

In that matter, the senator hadn't disclosed to Congress that he first sold land to a friend's limited liability company back in 2001 and took an ownership stake in the company. He collected the seven-figure payout when the company sold the land again in 2004 to others.

Reid portrayed the 2004 sale as a personal sale of land, not mentioning the company's ownership or its role in the sale.

The senator said his amended ethics reports would list the 2001 sale and the company, called Patrick Lane LLC. He said the amended reports also would divulge two other, smaller land deals he had failed to report to Congress.

"I directed my staff to file amended financial disclosure forms noting that in 2001, I transferred title to the land to a Limited Liability Corporation," Reid said in a statement issued by his office.

He said he believed the 2001 sale did not alter his ownership of the land but he agreed to file the amended reports because "I believe in ensuring all facts come to light."

Reid labeled the AP story as the "latest attempt" by Republicans to affect the election. AP reported last week that it learned of the land deal from a former Reid adviser who had concerns about how it was reported to Congress.

On the Ritz-Carlton holiday donations, Reid gave $600 in 2002, then $1,200 in 2004 and $1,500 in 2005 from his re-election campaign to an entity listed as the REC Employee Holiday Fund. His campaign listed the expenses as campaign "salary" for two of the years and as a "contribution" one year.

Reid's office said the listing as salary was a "clerical error" and that the use of campaign money for the residential fund was approved by his lawyers. "I am reimbursing the campaign from my own pocket to prevent this issue from being used in the current campaign season to deflect attention from Republican failures," he said.

Residents and workers at the Ritz said the fund's full name is the Residents Executive Committee Holiday Fund and that it collects money each year from condominium residents to help provide Christmas gifts, bonuses and a party for the support staff.

Federal election law permits campaigns to provide "gifts of nominal value" but prohibits candidates from using political donations for personal expenses, such as mortgage, rent or utilities for "any part of any personal residence."

The law specifically defines prohibited personal use expenses as any "obligation or expense of any person that would exist irrespective of the candidate's campaign or duties as a federal officeholder."

Land deeds show Reid and his wife, Landra, purchased a condominium for their Washington residence at the hotel for $750,000 in March 2001. The holiday fund has existed for years at the condo, workers said.

Reid's office said he paid cash for the condo, tapping a money market fund worth between $500,000 and $1 million in proceeds from an earlier sale of a home. "Senator Reid purchased his home in Washington, DC, with the proceeds of the sale of his prior residence in McLean, Va.," the office said.

Reid said Monday he believed the holiday fund expenses were permissible but he nonetheless was reimbursing the campaign.

"These donations were made to thank the men and women who work
in the building for the extra work they do as a result of my political activities, and for helping the security officers assigned to me because of my Senate position," Reid said.

Larry Noble, the Federal Election Commission's former chief enforcement lawyer, said Reid's explanation is aimed at a "gray area" in the law by suggesting the donations were tied to his official Senate and political work.

"What makes this harder for the senator is that this is his personal residence and this looks like an event that everybody else at the residence is taking out of their personal money as they're living there," Noble said.

Conservative activists said Tuesday they were filing a complaint with the FEC alleging Reid violated campaign laws with the Ritz expenses.

Back in 2000, Congress rebuked powerful House Transportation Committee Chairman Bud Shuster, R-Pa., for among other things creating the appearance, through poor record-keeping, that campaign
committee expenditures were for personal rather than bona fide campaign uses.

More recently, Rep. Alan Mollohan, D-W.Va., reported his campaign spent political donations to pay for his $125 membership dues at a Washington country club and several thousand dollars on Christmas gifts. His spokesman was not immediately available for comment Tuesday.

On the land dealings, Reid announced Monday he had failed to disclose two other transactions on his prior ethics reports and would account for those on his amended reports along with the 2001sale.

The first, he said, involved the 2004 sale of about one-third acre of land he owned in his hometown of Searchlight, NV. And he said he had not reported his ownership since 1985 of a quarter acre of land his brother gave him in 1985.

Reid said the failure to disclose those transactions previously was due to "clerical errors" and they amounted to "two minor matters that were inadvertently left off my original disclosure forms."


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