Rory Reid’s gubernatorial campaign circumvented contribution limits, created 91 shell PACs to infuse $750,000 into campaign

Steve Marcus

Democratic gubernatorial candidate Rory Reid gives a concession speech during a Democratic election party Tuesday, Nov. 3, 2010, at Aria.

By Jon Ralston · March 4, 2011 · 10:25 AM

(MOD edit)

In one of the most brazen schemes in Nevada history, gubernatorial candidate Rory Reid’s campaign formed 91 shell political action committees that were used to funnel three quarters of a million dollars into his campaign, circumventing contribution limits and violating at least the spirit – and maybe the letter – of the laws governing elections.

Reid, who was fully aware of what was done, essentially received more than $750,000 from one PAC – 75 times the legal limit -- after his team created dozens of smaller PACS that had no other purpose other than to serve as conduits from a larger entity that the candidate funded by asking large donors for money. Indeed, the shell PACs were formed in the fall and dissolved on Dec. 31, after they had served their short-term function, which was to help the candidate evade campaign contribution laws.

Reid solicited donations for the Economic Leadership PAC, which raised more than $800,000 over a five-month period – donations that were then disbursed in $10,000 increments to dozens of other PACS, which quickly funneled the money back to the candidate’s campaign account.

Records show many of the PACS had names implying rural provenance –such as the Douglas County Committee for Change and Lyon County Leadership Fund – but they all had the same Las Vegas residential address before being quietly dissolved after the election. The money laundered through these PACS often resided there only for a couple of days, a transaction that was needed to, they believed, comply with contribution limits on a technicality. The Reid campaign could then quickly make use of the money in a futile attempt to salvage his faltering gubernatorial bid.

Reid told me today that he cleared what he did with his legal counsel – Paul Larsen – and the secretary of state’s office. “What we did was fully disclosed and complied with the law,â€