Why do Gopers keep getting away with corrunption?

Vegas firm factors in Ensign inquiry By: John Bresnahan and Manu Raju March 26, 2010 05:04 AM EDT

R&R Partners is famous for creating the Las Vegas slogan “What happens here stays here.” But it’s the firm’s Washington connections — and its deep ties to scandal-plagued Sen. John Ensign (R-Nev.) — that have drawn it into a Senate Ethics Committee investigation and, potentially, a Department of Justice inquiry. A top R&R executive, Pete Ernaut, has been subpoenaed by the Ethics Committee as part of its investigation into Ensign’s extramarital affair with Cindy Hampton, his former campaign treasurer. John Lopez, Ensign’s former chief of staff, who now lobbies for R&R, has been subpoenaed by the Ethics Committee as well. The $40 million-per-year company is a power player on the political scene, with connections to virtually every major politician in Nevada. CEO Billy Vassiliadis — or Billy V., as he’s known in Nevada — has close relationships with Senate Majority Leader Harry Reid (D-Nev.) and his son, gubernatorial candidate Rory Reid, and was a senior adviser to Barack Obama’s Nevada campaign in 2008. But it’s the Ensign connections that are bringing unwelcome scrutiny. The Ethics Committee and the Justice Department are conducting parallel probes into the senator’s efforts to steer lobbying work to Doug Hampton, a former top Ensign aide married to Cindy Hampton, after both Hamptons left Ensign’s office in April 2008. The Department of Justice is also reportedly reviewing allegations that Ensign offered to help Nevada credit card companies derail pending legislation in return for donations to the National Republican Senatorial Committee, which he chaired in 2007-08. Ernaut, a former state assemblyman who served as campaign manager for Ensign’s 2000 and 2006 Senate races, said R&R received a subpoena from the Ethics Committee late last month, demanding that it turn over a “broad brush” of documents to the panel by March 31. R&R has represented NV Energy, Nevada’s biggest utility company, on the federal level since May 2008, although there are much longer ties at the state level. Doug Hampton also lobbied for NV Energy while working for November Inc., a company run by two top political operatives for Ensign, Mike and Lindsey Slanker. Hampton never formally registered as a lobbyist. Ernaut has also worked closely with the Slankers on Nevada political campaigns, according to a source tied to the firm. R&R has not yet been contacted by the Justice Department, Ernaut said last week. Ernaut said that while R&R is “disappointed in the entire situation,” it has acted ethically and is cooperating fully with Senate investigators. Federal investigators and the Senate Ethics Committee are likely to focus their attention heavily on Lopez, whom Ensign reportedly asked to serve as a middleman between the senator and Doug Hampton. Lopez, like Ensign, has denied any wrongdoing in his dealings with Hampton. Lopez’s lawyer, Robert Kelner, declined to say whether Lopez had been subpoenaed by the DoJ, though FBI agents sought to interview the ex-Ensign aide back in January. R&R also discussed working with Allegiant Air — another Las Vegas company that Doug Hampton unofficially lobbied for while working for November Inc. — to represent its interests in Washington, according to sources familiar with the talks. R&R has not registered Allegiant as a federal lobbying client at this time. Maurice Gallagher, Allegiant’s CEO, has been a major financial backer of Ensign’s. “Certainly, when you have a company in the public eye, these types of things are always possible,” Ernaut said of R&R’s connection to the Ensign investigation. Ernaut’s background is typical of the background of the high-profile political players who run R&R. Whichever Nevada candidate or party wins office, he or she typically has close ties to R&R even before being sworn in. “It doesn’t matter who holds office in Nevada, R&R is always on the winning side,” said a source familiar with the firm’s operations. This source added: “There is no conflict of interest when you already control everything.” Ernaut is a “prominent political player in the state,” said Jon Ralston, a well-regarded political commentator in Las Vegas. Ralston called R&R “powerful,” noting its ties to many companies and politicians throughout the Silver State. Ernaut attended the University of Nevada at Reno with Brian Sandoval, the former state attorney general and federal judge now seeking the governor’s mansion, and Sandoval’s wife. Ernaut later served in the state Assembly with Sandoval, and now he’s a top adviser for Sandoval’s campaign for the GOP gubernatorial nomination. In 1984, Ernaut transferred to the University of Southern California, where he was a fraternity brother of Nevada GOP Rep. Dean Heller, who may run for Ensign’s seat in 2012. Ernaut, who was a campaign manager and chief of staff to former Nevada GOP Gov. Kenny Guinn, first met Ensign during his successful run for a House seat in 1994. Ernaut managed Ensign’s 2000 and 2006 Senate campaigns. Before the sex scandal broke last summer, Ernaut remained close to Ensign; the two attended social events together and played golf when the senator was back home in Nevada. Ernaut said he met Doug Hampton, a longtime Ensign friend, some five years ago, when Hampton moved to Las Vegas. Doug and Cindy Hampton went to work for Ensign in late 2006 — Cindy as campaign treasurer and Doug as deputy chief of staff, with Lopez as his boss. But Ernaut said he had no clue about the senator’s affair until Ensign called him the day before he publicly disclosed it in mid-June, a call that Ernaut said “made me sick to my stomach.” Ernaut said he hasn’t spoken frequently to either Ensign or Doug Hampton since last year, adding that the controversy “certainly strained the relationship.” Ernaut said he has been close to Lopez for some 25 years and that he had tried to woo Lopez to join R&R over the past decade. Lopez left Ensign’s office in late July. Even though Ernaut is receiving more scrutiny because of his ties to Ensign, Vassiliadis has also been questioned in the Ensign case. Vassiliadis’s ties to Washington run as deep as Ernaut’s. Rep. Dina Titus (D-Nev.) was Vassiliadis’s political science professor when he attended the University of Nevada at Las Vegas. “It’s a small state. I have to tell you, if there was an issue that had to [do] with tourism, gaming, travel — although Billy is much more knowledgeable than just on those issues — I wouldn’t hesitate a minute to pick up the phone and ask him what he thought,” said Rep. Shelley Berkley, the Las Vegas-area Democratic congresswoman, who has known Vassiliadis for some 30 years. Vassiliadis, even though he’s a Democrat, aided Ensign during his 2000 Senate campaign, just two years after Ensign and Reid were engaged in a bitter contest that Reid won by only 428 votes. He has also donated to Republican candidates and incumbents. He said his firm will continue to have deep connections to Nevada politics. In a recent interview, Vassiliadis said that R&R “encourage[s] our people to get involved in politics. It’s part of who we are.”

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