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Schneiderfreude: How to Cash in Big as an Elected Official

A Democrat state senator from Las Vegas has a history of drafting legislation that he could/would benefit from financially in a major way…not, apparently, that there’s anything wrong with that. At least, not in Nevada.

“Sen. Mike Schneider, chairman of the committee on energy, transportation and infrastructure, has proposed a bill to begin the process of bringing light rail to Southern Nevada,” reported the Las Vegas Sun last March 5.

Sounds innocuous enough, right? But as the Sun story exposed, Schneider owns a “five-acre parcel close to the proposed light rail line, just north of its end point.” And “in other cities that have built light rail systems…values near rail stations have increased, often significantly.”

Cha-ching!!

When caught trying to use his public office to potentially line his own pockets, Schneider responded in the most eloquent of manners: “We are a citizen Legislature, and if you don’t want me to own anything, and you want dumb shits up here, we can find them.”

Maybe it’s just me, but I think I might prefer an ethical dumb shit to an unethical smart ass. In any event, Schneider’s light rail scheme went up in smoke and down in flames.

Which brings us to last week and a brand-spanking new Las Vegas Sun story shining light on more Schneideranigans involving the senator’s undeveloped 5-acre property for which he reportedly paid about $1.1 million dollars when the Vegas real estate market was red hot.

Indeed, Schneider estimates the land was worth $7.5 million…until the market crashed in 2008. At which point he found himself stuck holding onto pretty much worthless desert land and $1.65 million in debt he’d racked up buying it.

Which might certainly be one explanation for why he tried to situate a taxpayer-funded light rail station near the property, thereby increasing the value of his land enough to maybe attract a buyer. But with the light rail scheme derailed, Schneider moved on to find another way to use his experience in public office to save his financial bacon.

“As chairman of the Senate Energy, Infrastructure and Transportation Committee and vice chairman of the Commerce Committee, (Schneider) is versed in the arcane world of government financing for low-income housing,” reports Anjeanette Damon. “Schneider also sits on the subcommittee tasked with ensuring the state spends its share of the $787 billion federal stimulus efficiently and appropriately.”

Uh-oh.

“Drawing on that expertise and his access to the state officials who run the programs he needed to piece together the money for his project,” Damon continues, “Schneider developed a sustainable condominium project for low-income senior citizens.”

In other words, it looks like Schneider used some of Barack Obama’s “stimulus” money to build government housing on his otherwise pretty much worthless land, thus bailing himself out.

According to the story, Schneider formed a partnership with another developer and the partnership paid Schneider $2 million for the land – “$400,000 more than the value determined by an appraisal a year ago.”

The end result: Schneider’s debt on the land is now paid off and he anticipates pocketing some $350,000 in cold hard cash from the deal.

Oh, and once the project is turning a profit – with the help of “stimulus money, federal loans, state and local grants, tax exempt bonds and tax credits administered through state agencies” – his new partnership is expected to rake in a cool $1 million a year for 15 years.

As Lynyrd Skynyrd would say: “Ooo-ooo, that smell. Can’t you smell that smell?”

Don’t worry. It gets worse.

“Nearly all of the government financing for the project must be paid back by the development at very low or no interest,” Damon reports. “The project is taking advantage of about $5 million in tax credits that don’t have to be paid back and a $350,000 energy grant from the state for a solar collector to power the common areas.”

Ah, “free” money. It’s good ta be da king!

Yet Schneider claims – with a straight face, I assume – that he took “care not to let his position as an elected official influence the process” through which he turned his crap farm into a rose bed. In fact, he even went so far as to suggest his vaunted position as a state legislator HURT his ability to turn his lemon into champagne, claiming it was tough to find potential investors.

“Everyone has this thing about crooked politicians.”

His words, not mine.

In Schneider’s mind – the mind of a liberal Democrat, by the way – he took a bath on this deal because, although he didn’t lose his ass and will profit nicely in the midst of the worst real estate market in the universe, he didn’t sell at the top of the market before Humpty Dumpty fell off the wall.

In any event, an objective assessment of the deal to see just how “badly” Schneider has suffered from this bailout isn’t possible because Schneider and his partner “refused to provide (Damon) a copy of the new sales agreement.” Hmmm.

As to his laughable claim that he didn’t benefit from his position as a state legislator in cobbling together this sweet deal, Damon notes that “housing division staff, which regularly appear before Schneider’s legislative committee” and “who underwrote the tax exempt bonds and who judged the criteria for awarding the stimulus money…were aware of Schneider’s involvement in the project.”

Those folks certainly know where their bread is buttered. In fact, “Housing division Director Charles Horsey also said he personally briefed Schneider on the various financing programs available through the division about two years ago.”

Still not completely revolted by this story? Get this: Schneider “didn’t disclose his involvement (in the project) during a stimulus oversight committee meeting in October.”

The senator claims he told committee chairwoman Debbie Smith about the project in a private conversation, but “Smith said she wasn’t aware of the project that came before the committee” and noted that “a private conversation with the chairwoman of a committee doesn’t constitute a public disclosure.”

Schneider notes that his deal was cleared by Nevada’s worthless Ethics Commission, “which found the deal doesn’t violate laws restricting when lawmakers can enter into a contract with the state because it involves federal money.” However, Schneider “didn’t mention that stimulus funding would be part of the project’s financing when he approached the Ethics Commission.”

Hang on. We still haven’t reached the bottom of this muck pit, but we’re close.

Schneider “openly admits he worked to hide his involvement when the project went before the Nevada Board of Finance, which is headed by Gov. Jim Gibbons and approved the bonding,” saying that “If (Gibbons) knew it was my deal, the son of a bitch would kill it. They didn’t know. There was no reason for them to know.”

Mama Mia! If this isn’t government corruption by a greedy, crooked politician….then we must be in Nevada.

The only thing that makes this stench even worse is the fact that, to the best of my knowledge, not a peep has been heard from the Nevada Republican Party or Schneider’s GOP senate colleagues who ought to be screaming bloody murder about this from atop Boundary Peak.

Their silence is deafening….and shameful. Almost as shameful as Schneider himself.