LVRJ outsources its Reid attacks to Dick Morris


The Las Vegas Review-Journal published a lengthy excerpt from Dick Morris' and Eileen McGann's book 2010: Take Back America: A Battle Plan that uses numerous falsehoods and distortions to attack Senate Majority Leader Harry Reid.

Morris misleadingly claims Reid gave Landrieu a "300 million gift for her state"

Morris: "Reid handed [Landrieu] a $300 million gift for her state." Morris and McGann write:

In running the Senate, money has been no object for Reid. It's the means to keeping his team in line and rewarding his friends. When Sen. Mary Landrieu of Louisiana was wavering about voting for the health care bill, for example, Reid handed her a $300 million gift for her state. She wasn't at all undecided after that.

Money in health care law to correct shortfall in Louisiana Medicaid caused by Katrina. Several media outlets noted that Landrieu had secured funding to increase federal contributions to Medicaid as part of the Senate version of the health care reform bill worth hundreds of millions of dollars. Landrieu described the provision in a press release announcing her support for the health reform legislation, stating that it was necessary to deal with the fact that Louisiana's "per capita income was abnormally inflated" due to "one-time recovery dollars" given to Louisiana as a result of Hurricanes Katrina and Rita:

Finally, I was also proud to work with Leader Reid and Finance Committee Chairman Max Baucus to address an inequity in the formula that determines the federal match of Medicaid dollars. As we all know, in 2005 Hurricanes Katrina and Rita ravaged the Gulf Coast and destroyed homes, neighborhoods, and even full communities throughout South Louisiana. In an effort to aid the recovery, Congress approved a much-needed aid package for Louisianans that infused grant dollars and direct assistance to speed our recovery.

Some necessary one-time recovery dollars, in addition to labor and wage costs going up because there was a constriction in the market, were calculated into our State's per capita income. The result has been that Louisiana's per capita income was abnormally inflated, and put us in a category with richer states like Connecticut, Massachusetts and Maryland.

The result is that our federal match for Medicaid dropped pretty dramatically. I worked with my colleagues to correct this formula. I never asked for special treatment for Louisiana, but only for understanding of the unintended consequences of our state's unique situation. We only wanted to be treated fairly and not to get penalized because we have been forced to rebuild following the worst natural disaster in the United States' history. Our federal Medicaid match rates should reflect the reality on the ground in Louisiana, not the cold calculations of inflexible federal formulas.

Louisiana Republican Sen. Vitter reportedly said there are "legitimate arguments in favor of the Louisiana hurricane-Medicaid fix." From a January 28 article in the Baton Rouge Advocate:

Sen. David Vitter, R-La., said Landrieu's actions and the controversy that followed it hurt the merits and prospects of state congressional members to securing future federal Medicaid dollars.

"I'm afraid that legitimate arguments in favor of the Louisiana hurricane-Medicaid fix will never be focused on now because of the deal-making over the Obama health-care bill," Vitter said.

AP: Jindal's administration has "publicly sought a fix to the temporary drop in federal Medicaid match money for Louisiana." From a January 20 Associated Press article:

Without Landrieu's language, Louisiana's federal assistance for Medicaid will be cut because the state's post-Hurricane Katrina economic surge temporarily drove up average income in the state because of government aid and high-paying reconstruction jobs. The federal share of Medicaid aid is higher for states with lower average incomes. State officials have argued the state shouldn't be penalized for an artificial, temporary per-capita income boost.

"Louisiana only asked to stay where we were; to have the same payment schedule that we've always had," Landrieu said.

Republican Gov. Bobby Jindal's administration and much of the state congressional delegation have publicly sought a fix to the temporary drop in federal Medicaid match money for Louisiana, though Jindal and most of the state's congressmen oppose the Democrat's health care bill.

Times-Picayune: Jindal health secretary says people should be "grateful that Landrieu used her leverage" to try to get health care fix. A November 20, 2009, article in the New Orleans Times-Picayune reported (via Nexis):

While the Republican National Committee immediately charged that Landrieu has made a "backroom deal with (Senate Majority Leader) Harry Reid for her support of the government takeover of our health care system,'' Alan Levine, Louisiana secretary of health and hospitals in the Jindal administration, said that even those who oppose the bill ought to be grateful that Landrieu used her leverage to try to fix the state's so-called "FMAP'' problem.

"Look,'' said Levine, who has been lobbying the administration and Congress on the FMAP issue for eight months, "it's good to have a senator in a position to be able to make demands like that.''

"While I don't support the bill, she is doing the best she can to help the state, and she should be applauded,'' he said.

Morris revives false claim that Reid bribed Dodd with hospital funding

Morris claims Reid "tossed out another $100 million to his friend" Dodd. Morris and McGann write:

And Reid also tossed out another $100 million to his friend and fellow ObamaCare advocate, Chris Dodd, for a $100 million new medical facility in Connecticut -- a state that already has the prestigious Yale University and UConn medical centers to cover its 3 million people. What are the odds that the soon-to-be-former-Sen. Dodd finds his name on the new facility? But, hey, what are friends for?

In fact, Connecticut would reportedly have to compete for the hospital funds. The Hartford Courant reported that Connecticut would have to compete for the funds. Also, Dodd reportedly said that at least 14 other states could apply for the grant.

Funding for health care facilities would be decided by Health and Human Services secretary. The text of the Senate health care bill as passed states that the $100 million grant for "infrastructure to expand access to health care" "may only be made available by the Secretary of Health and Human Services upon the receipt of an application from the Governor of a State" that meets certain requirements:

(b) REQUIREMENT.-Amount appropriated under subsection (a) may only be made available by the Secretary of Health and Human Services upon the receipt of an application from the Governor of a State that certifies that-

(1) the new health care facility is critical for the provision of greater access to health care within the State;

(2) such facility is essential for the continued financial viability of the State's sole public medical and dental school and its academic health center;

(3) the request for Federal support represents not more than 40 percent of the total cost of the proposed new facility; and

(4) the State has established a dedicated funding mechanism to provide all remaining funds necessary to complete the construction or renovation of the proposed facility.

Proposed UConn hospital part of Republican Gov. Rell's health care proposal. Connecticut Gov. M. Jodi Rell, a Republican, has reportedly proposed a $352 million University of Connecticut Health Center that would rely on $100 million in federal funds that Connecticut would have to compete for under the provision inserted by Dodd.

Morris invokes Abramoff to falsely suggest Reid was bribed

Morris cites flawed AP article to suggest Reid was bribed. Morris and McGann write:

It wasn't just the gambling interests that connected Reid and Abramoff's firm. The lobbying office's billing records documented 21 other contacts with Reid's office about another client -- the Northern Mariana Islands, a U.S. territory. Dozens of phone calls and meetings with Reid's office about the extension of the minimum wage to the island were detailed:

Reid, along with his Senate counsel, Jim Ryan, met with Abramoff deputy Ronald Platt on June 5, 2001, "to discuss timing on minimum wage legislation," according to an invoice that Greenberg Traurig -- Abramoff's firm -- sent to the Marianas. Three weeks before the meeting, Greenberg Traurig's political action committee donated $1,000 to Reid's Senate re-election committee. Three weeks after the meeting, Platt himself donated $1,000 to Reid.

A Reid representative confirmed Platt had regular contacts with the senator's office, calling them part of the "routine checking in" by lobbyists who work Capitol Hill. As for the timing of donations, Manley said, "There is no connection. This is just a typical part of lawful fundraising."

Unfortunately, he's right -- it is very typical. That's what's wrong with Washington.

AP article -- and Morris -- leave out that Reid co-sponsored bill against Abramoff firm's interests. The AP article Morris cites failed to report that Reid did not take action on behalf of Abramoff's interests. Rather than working with Abramoff to defeat legislation that would raise the minimum wage in the Northern Marianas Islands, Reid was in fact a co-sponsor of the legislation. Reid also supported the bill's passage in a May 6, 2002, speech on the Senate floor:

REID: The Fair Minimum Wage Act would increase the Federal minimum wage by $1.50 over 2 years. We are not asking it be kept up with inflation from when it was first established. About 80,000 Nevadans and about 9 million Americans would get a raise up to $6.65 during the next 2 years. This modest proposal would bring the real value of the minimum wage within a penny of the value it had in the 1980s.

Abramoff aide: "I didn't ask Reid to intervene. ... I'm sure he didn't." The Abramoff aide that Reid met with to discuss the minimum wage bill in 2001, Ronald Platt, contends that the purpose of the meeting was not to discuss Reid's position on the legislation. In response to the AP article, blogger Joshua Micah Marshall contacted Platt about whether Reid had taken any action against the minimum wage bill following their meeting, to which Platt responded, "I'm sure he didn't":

According to Platt, the purpose of his contacts was to see what information he could get about the timing and status of the legislation. Reid's position on the minimum wage issue was well known and there would have been no point trying to get his help blocking it. That's what Platt says. "I didn't ask Reid to intervene," said Platt. "I wouldn't have asked him to intervene. I don't think anyone else would have asked. And I'm sure he didn't."

Morris selectively cites LA Times to baselessly claim Reid benefited from special earmark for bridge

Morris cites LA Times to claim Reid "sponsored an amendment that would increase the value of his own land." In their book 2010: Take Back America: A Battle Plan, Morris and McGann cite a November 13, 2006, Los Angeles Times article to support claims that Reid sponsored an amendment to a 2006 transportation bill that would increase the value of property he owned: They write:

In 2005, Reid sponsored an earmark to the 2006 transportation bill that provided $18 million in federal funds to build a bridge over the Colorado River to connect Laughlin with Bullhead City, Ariz. Laughlin is a casino town, but most of its workers live across the river in Bullhead. Also located in Bullhead -- just a few miles from the bridge site -- is a 160-acre parcel of land owned by Sen. Harry Reid.

So did Reid sponsor an amendment that would increase the value of his own land? Looks like the answer is yes.

In 2006, some local officials predicted that the construction of the new bridge would "undoubtedly hike land values in an already-booming commuter town, where speculators are snapping up undeveloped land for housing developments and other projects."

Same LA Times article reports local property owners disputed that bridge would raise property values. Morris and McGann do not note that, according to the same November 13, 2006, Los Angeles Times article, there was disagreement over whether or not the bridge would raise land values:

Some other local real estate owners, however, question whether the bridge would increase land values.

Reid's office referred inquiries about land values to developer Robert Bilbray, a Reid supporter who works in the Laughlin-Bullhead City area.

Bilbray disputed the notion that Reid could stand to gain from the bridge construction.

Site plans have not been finalized, he said, and some proposed locations could decrease Reid's property value.

"The concept that Sen. Reid's property in Bullhead City, Ariz., will gain in value from another bridge between Bullhead City and Laughlin is ludicrous," he said.

Local leaders reportedly said bridge was needed because traffic overwhelmed existing bridge. On November 13, 2006, the Los Angeles Times reported that local leaders had argued a second bridge spanning the river between Bullhead City and Laughlin "was needed because traffic on the existing connector bridge, on the northern edge of Bullhead City, had become overwhelming." Republican House members Rep. Trent Franks (R-AZ) and Rep. Jon Porter (R-NV) reportedly worked to secure funding of the bridge. According to the Los Angeles Times, Franks and Porter "got $2 million for the bridge inserted into the House version of the transportation bill."

Morris smears Reid with baseless questions over land purchase

Morris suggests Reid got a special deal on some of his Bullhead City land. Morris and McGann write:

Reid bought the property more than 20 years ago, paying $150,000 for 100 acres; his friend Clair Haycock, the owner of Haycock Petroleum in Las Vegas, bought an additional 60 acres for $90,000. At one point in the 1990s, Reid and his partner sold the land for $1.3 million, but the buyer defaulted on the note and the land returned to the partners. Haycock sold his interest to Reid for $10,000 in 2002, even though the property was assessed at more than $2,000 an acre.

So why didn't Haycock charge Reid $120,000 (60 acres at $2,000 per acre)?

"The low price resulted from Haycock's need to sell and Reid's lack of interest in buying, the two men said."

What's that supposed to mean? Presumably, if Hancock needed to sell, he needed the cash. But even if he did, why would he settle for less than 10 percent of his land's value?

Years earlier, they'd been offered more than $1 million for the property. So the sale price makes no sense. Meanwhile, property prices began to jump after the bridge proposal. According to the Los Angeles Times, one California businessman bought property near the Reid property in 2006, "paying $240,000 for 37.52 acres, an average of $6,396 an acre."

Yet, strangely enough, Sen. Reid has indicated a decrease, not an increase, in the value of the property. From 2001 to 2005, Reid disclosed that the property was worth $500,000 to $1,000,000. Then, in 2006, after the earmark for the bridge went into effect, he indicated that the entire 160-acre property was worth only $150,000. That same year, another nearby purchaser paid over $6,000 an acre. In 2007 and 2008, Reid valued the asset at $250,000 to $500,000.

Is Reid's property the only one in town that's decreasing in value? Or has he failed to disclose the true value? And was the property a gift from his oil company pal?

Reid's office says price reflected Reid's disinterest in land. In a January 28, 2007 article, The Los Angeles Times reported:

In 2001, Haycock Distributing Co. decided to convert its existing pension fund into a 401(k) retirement program. In liquidating its assets, the firm decided that the plan must quickly sell its share of the property.

Lawyers advised the Haycocks that the family could not buy it from the pension fund, so Clair Haycock approached Reid. At first, Reid said "he and his wife were not interested due to the property's past history," Haycock wrote in a letter to The Times.

"Eventually, he gave me $10,000 for my share," Clair Haycock wrote. "I was just happy to have been able to liquidate the property from my pension plan." Reid's office said the senator and his wife purchased it reluctantly. "Because it had minimal value to them, they were willing to pay only a minimal price," a Reid staffer wrote in response to questions.

Reid tried unsuccessfully to give away land. The Los Angeles Times reported:

In 1999, according to Reid's office, the senator began working without success with developer Craig Johnson on a plan for the property. At some point, Reid's office said, he offered to give the land to Johnson, who declined. Johnson has confirmed that offer. In a statement Reid's office provided, Johnson described the listless market and the property's challenges.

Morris invents "ethical issue" surrounding land sale

Morris suggests "ethical issue" with Reid land sale. Morris and McGann write:

The Land Grab: One More Ethical Issue

In 2004, Reid received a windfall profit of $1.1 million from the sale of Nevada property he hadn't personally owned for at least three years before the sale. Reid and his wife bought the property for $400,000 in 1998, but they sold it in 2001 for the same price. When Reid submitted his financial disclosure form to the Senate for that year, he failed to divulge the transfer of the property to a limited liability company he owned with a friend, Jay Brown, a former casino lawyer "whose name [has] surfaced in a major political bribery trial ... and in organized crime investigations," according to USA Today.

In 2004, after a change in zoning, Brown sold the land -- and Reid made $1.1 million.

After John Solomon reported the 2001 transaction, Reid suddenly amended his 2001 disclosure form to reflect the sale. Although Reid claimed he was a part-owner of the limited liability corporation, public records don't list him as a shareholder. Must have been another clerical error.

It's nice to triple your money on an investment. So why didn't Reid disclose it?

In fact, Morris' allegation of "ethical issue" is wildly misleading. From an October 11, 2006, post on TPM Muckraker:

Reid made a $700,000 profit on the sale, not $1.1 million. Also, the story, by the AP's John Solomon, makes it sound as if Reid got money for land he didn't own. But that's not the case.


Yet, as Solomon obliquely acknowledges, Reid, who had bought the land along with a friend in 1998, transferred his ownership in the land to a limited liability company in 2001. The company, which was composed solely of this land owned by Reid and his friend, in turn sold the land in 2004. That's when Reid collected his $1.1 million share of the sale. Since Reid had originally put down $400,000 on the sale, his profit was $700,000, not the full $1.1 million, as Solomon states in his lead.

Solomon persists in straightforwardly describing the 2001 land transfer as a sale, even though no money changed hands; Reid's share of the land after the transfer was the same as before. In his financial disclosure forms, Reid did not disclose his transfer of the land to the LLC, although he did continue to disclose his ownership of the land through 2004, when it was sold.

So what's the story here? Well, it's not clear that Reid broke any ethical rules -- let alone any laws. Solomon cites one expert as saying that Reid should have disclosed the transfer to the LLC, because "[w]hether you make a profit or a loss you've got to put that transaction down so the public, voters, can see exactly what kind of money is moving to or from a member of Congress." The thing is, of course, that no money moved in the LLC transaction. Reid still owned the same amount of land - it was just under the cover of the LLC.

Posted In
Government, Ethics, The Senate
Dick Morris, Eileen McGann
Las Vegas Review-Journal
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