Reid to amend his $1.1M land deal ethics report

updated 2:14 p.m. ET Oct. 16, 2006

WASHINGTON - Senate Democratic leader Harry Reid announced Monday he is amending his ethics reports to Congress to more fully account for a land deal that allowed him to collect $1.1 million for property he hadn't personally owned for three years.

Reid acted several days after The Associated Press reported the senator didn't disclose to Congress that he first sold the land to a friend's company back in 2001 and took an ownership stake in the company. He didn't collect the seven-figure payout until the company sold the land again in 2004 to others.

Reid said his amended ethics reports will list the 2001 sale.

"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.

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

Reid blamed the AP story as a "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 the way the deal was reported to Congress.

Reid also announced he failed to disclose two other land transactions on his prior ethics reports and would account for those on his amended reports.

Land deal background
From the start Reid has denied any wrongdoing in collecting the $1.1 million windfall, but had said he was willing to change his report on the transaction if the Senate Ethics Committee orders him to.

Reid hung up on an A-P reporter asking about the deal. He told a Las Vegas news conference today that everything he did was "transparent," that he "paid all the taxes" and that everything was "fully disclosed."

Aides to the senator say no money changed hands in 2001 when Reid got an ownership stake in a friend's company equal to the value of the land.

Disclosure concerns
In the process, Reid did not disclose to Congress an earlier sale in which he transferred his land to a company created by a friend and took a financial stake in that company, according to records and interviews.

The Nevada Democrat's deal was engineered by Jay Brown, a longtime friend and former casino lawyer whose name surfaced in a major political bribery trial this summer and in other prior organized crime investigations. He's never been charged with wrongdoing - except for a 1981 federal securities complaint that was settled out of court.

Land deeds obtained by The Associated Press during a review of Reid's business dealings show:

-The deal began in 1998 when Reid bought undeveloped residential property on Las Vegas' booming outskirts for about $400,000. Reid bought one lot outright and a second parcel jointly with Brown. One of the sellers was a developer who was benefiting from a government land swap that Reid supported. The seller never talked to Reid.

-In 2001, Reid sold the land for the same price to a limited liability corporation created by Brown. The senator didn't disclose the sale on his annual public ethics report or tell Congress he had any stake in Brown's company. He continued to report to Congress that he personally owned the land.

-After getting local officials to rezone the property for a shopping center, Brown's company sold the land in 2004 to other developers and Reid took $1.1 million of the proceeds, nearly tripling the senator's investment. Reid reported it to Congress as a personal land sale.

Reid hangs up
The complex dealings allowed Reid to transfer ownership, legal liability and some tax consequences to Brown's company without public knowledge, but still collect a seven-figure payoff nearly three years later.

Reid hung up the phone when questioned about the deal during an AP interview last week.

The senator's aides said no money changed hands in 2001 and that Reid instead got an ownership stake in Brown's company equal to the value of his land. Reid continued to pay taxes on the land and didn't disclose the deal because he considered it a "technical transfer," they said.

They also said they have no documents proving Reid's stake in the company because it was an informal understanding between friends.

The 1998 purchase "was a normal business transaction at market prices," Reid spokesman Jim Manley said. "There were several legal steps associated with the investment during those years that did not alter Senator Reid's actual ownership interest in the land."

Senate ethics rules require lawmakers to disclose on their annual ethics report all transactions involving investment properties - regardless of profit or loss - and to report any ownership stake in companies.

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