1998: “…appeared to solicit corruption of two county commissioners.” – UNLV ethicist Craig Walton
2011: “…pushed legislation or twisted the arms of federal regulators to pursue an agenda that is aligned with the business interests of her husband…”
2012: “Shelley Berkley faces formal ethics investigation”
(Las Vegas, NV) – Heller for Senate released a new ad today highlighting seven-term Congresswoman Shelley Berkley’s pattern of questionable ethics and public corruption. To view the ad now airing statewide, click here.
1) Fact: Shelley Berkley urged her boss to give money to judges and county commissioners to get special favors.
Documentation: “In one memo, Berkley, a lawyer and university regent, reportedly encouraged Adelson to contribute to the campaigns of judges, suggesting they tended to return the favor…Berkley also was overheard on the phone conversation discussing attempts to persuade Adelson to do favors for two county commissioners, Yvonne Atkinson Gates and Erin Kenny. She allegedly encouraged Adelson to give Gates a daiquiri concession and hire the uncle of Commissioner Erin Kenny at the $2 billion Venetian hotel-casino to help grease the way for construction of the megaresort.”
Citation: “Berkley apologizes for remarks,” Las Vegas Sun, June 9, 1998
2) Fact: She got fired.
Documentation: “But Berkley, in a memo she wrote while a Las Vegas Sands employee, and in a taped conversation just after she was fired, gives the impression that she doesn’t believe Las Vegas has grown up much at all. In fact, the memo and tape indicate Berkley believes Las Vegas remains a great rotten borough — to borrow the title of Gilman Ostrander’s 1966 book about Nevada — a town where juice is obtained with payoffs disguised as campaign contributions and where elected officials can be purchased with business ventures or jobs for relatives.”
Citation: Jon Ralston, “Comments raise ugly specters,” Las Vegas Review-Journal, June 4, 1998
3) Fact: Bipartisan House Ethics Committee has voted unanimously to investigate Berkley for using her office for personal gain.
Documentation: ”In a move that shakes up the U.S. Senate race in Nevada, the House Ethics Committee announced Monday it will investigate allegations that Rep. Shelley Berkley used her office wrongfully to advance health policies that benefited her husband, a prominent Las Vegas doctor. The committee’s leaders said the panel voted unanimously to establish a four-member subcommittee armed with subpoena powers to conduct the probe, a process expected to stretch through the summer and fall and cloud the Las Vegas Democrat as she campaigns for the U.S. Senate.”
Citation: Laura Myers, Steve Tetreault, “House panel to investigate allegations against Berkley,”
Las Vegas Review-Journal, July 9, 2012
4) Fact: Advocating corruption
Documentation: “University of Nevada, Las Vegas ethicist Craig Walton said Friday that Berkley needs to apologize to voters for offering advice that appeared to solicit corruption of two county commissioners. ‘Of course, anything resembling the use of office for any kind of gain or advantage is forbidden by the ethics in government law. To undertake to corrupt a person is certainly wrong,’ Walton said. ‘If (Berkley) is teaching newcomers to town (Adelson) that this is how we live around there, it’s bad advice.’”
Citation: “DA: Berkley’s suggestions broke no laws,” Las Vegas Review-Journal, June 6, 1998
5) Fact: Twisting arms
Documentation: “Ms. Berkley’s actions were among a series over the last five years in which she pushed legislation or twisted the arms of federal regulators to pursue an agenda that is aligned with the business interests of her husband, Dr. Larry Lehrner.”
Citation: “A Congresswoman’s Cause Is Often Her Husband’s Gain,” New York Times, Sept. 6, 2011
6) Fact: Taking care of herself
Documentation: “In a move that shakes up the U.S. Senate race in Nevada, the House
Ethics Committee announced Monday it will investigate allegations that Rep. Shelley
Berkley used her office wrongfully to advance health policies that benefited her husband, a
prominent Las Vegas doctor.”
Citation: “House panel to investigate allegations against Berkley,” Las Vegas Review-
Journal, July 9, 2012
Las Vegas Sun
Berkley apologizes for remarks
Tuesday, June 9, 1998
Congressional candidate Shelley Berkley apologized Monday for her “bad judgment” in conveying the impression that business is conducted in Las Vegas by doing favors for politicians.
“I am very sorry for what happened,” Berkley said in an interview with the Sun. “I’m sorry for the words and expressions I used and the ideas those words conveyed. I’m embarrassed, and I know I’ve disappointed people. But most of all, I’ve disappointed myself.
Berkley, the leading Democrat in the 1st Congressional District, said she believes she “inadvertently contributed to the cynicism that permeates the political process.”
Her thoughts about Southern Nevada politics reportedly were expressed in a May 1997 telephone conversation secretly recorded by a friend, and in private 1996 memos to her former boss, Las Vegas Sands Inc. Chairman Sheldon Adelson.
The existence of the tape and the memos were disclosed in news reports last week.
In one memo, Berkley, a lawyer and university regent, reportedly encouraged Adelson to contribute to the campaigns of judges, suggesting they tended to return the favor. Adelson wrote back chastising her for making that comment.
Berkley also was overheard on the phone conversation discussing attempts to persuade Adelson to do favors for two county commissioners, Yvonne Atkinson Gates and Erin Kenny.
She allegedly encouraged Adelson to give Gates a daiquiri concession and hire the uncle of Commissioner Erin Kenny at the $2 billion Venetian hotel-casino to help grease the way for construction of the megaresort.
But Adelson was said to have refused to help the commissioners.
He has since been backing a campaign to recall Gates from office over her aborted attempts to start up the daiquiri business.
Adelson was out of town Tuesday and could not be reached for comment.
Las Vegas Sands President William Weidner, who has called Berkley’s words “offensive,” did not return phone calls.
Berkley insisted she was only doing her job, as a political and legal adviser, when she recommended the favors for Gates and Kenny.
“At no time did I ever offer anything to an elected official to get their vote,” she said. “And neither did any elected official make such a request of me.
Berkley, who said she never meant to hurt anyone, apologized directly last week to Gates and Kenny, whom she considers good friends.
She has learned from this experience to more carefully weigh her words before she speaks, she said.
Berkley has never been given an opportunity to hear the tape and doesn’t know for sure who was on the other end of the conversation, she said.
“The truly scary thing about this is it could be somebody who is still pretending to be my friend,” she said.
Berkley surmised that the conversation was illegally recorded a couple of days after Adelson, a prominent Republican Party donor, fired her as his vice president of government relations.
“I was angry. I was hurt,” Berkley said. “I was very blunt and candid, and I was speaking to someone I trusted who I thought was a friend.”
Berkley said she was concerned that a person was willing to commit a crime to hurt her political career.
It is a felony in Nevada to tape a phone conversation without the knowledge or consent of the other party.
“Someone is trying to keep me out of Congress and silence my voice on important issues,” Berkley said. “This just makes me fight harder for what I believe in.”
Berkley said the controversy has energized her campaign.
About 400 supporters, she said, attended a campaign fund-raiser for her over the weekend.
“The outpouring of support from my volunteers and people in the community has been extraordinary over the last several days,” she said.
“This attack is designed to take everybody’s attention away from the important issues that affect working men and women in this community. I’m not going to let that happen.”
Her campaign manager, Gary Gray, suggested word of the secret taping has created a “climate of fear” within the political world.
“If all of this starts with somebody committing a felony to obtain a tape, what’s going to follow?” he asked. “What person running for office is going to feel comfortable talking on the phone with a friend after last week?”
When discussing the memo to Adelson about the judges last week, Berkley suggested that her former boss had set her up.
This week, she declined to elaborate.
But she said: “Only two people had the memo, and I didn’t leak it. You can draw your own conclusion.”
Adelson is known to be supporting one, maybe two, Republicans in the congressional race.
One of the Republicans is said to be former District Judge Don Chairez, who filed for office on the final day of last month’s two-week filing period.
Chairez did not return phone calls.
Berkley intends to continue talking about the issues and get past this “little bump in the road.
“I’m going to work harder to prove that I deserve to be in Washington,” she said.
Las Vegas Review-Journal
Comments raise ugly specters
June 4, 1998
In her stump speech, Democratic congressional candidate Shelley Berkley likes to tell audiences that she ‘didn’t just grow up in Las Vegas … I grew up with Las Vegas.’
But Berkley, in a memo she wrote while a Las Vegas Sands employee, and in a taped conversation just after she was fired, gives the impression that she doesn’t believe Las Vegas has grown up much at all. In fact, the memo and tape indicate Berkley believes Las Vegas remains a great rotten borough _ to borrow the title of Gilman Ostrander’s 1966 book about Nevada _ a town where juice is obtained with payoffs disguised as campaign contributions and where elected officials can be purchased with business ventures or jobs for relatives.
What that says about the university regent and longtime Democratic Party activist, the voters will decide come November. This is a heck of a self-inflicted wound, but $ 600,000 in campaign money can buy a heck of a large Band-Aid. What she has done, however, despite a hard-earned reputation for integrity and forthrightness, is give her arch-enemy and former boss, Sheldon Adelson, as well as her GOP opponents, a pulverizing issue.
The memo she wrote to Adelson on Sept. 24, 1996, speaks for itself. She follows up a recitation about how some judges had been, among other things, ‘instrumental in dismissing tickets’ for Sands employees by declaring: ‘Judges, like all candidates, rely on campaign contributions. Since they are also human, they tend to help those (who) have helped them. If we want to be able to continue contacting the judges when we need to, I strongly urge that we donate to the judges I recommended.’ So give to a judge and, as she puts it on the tape, ‘instead of a $ 500 fine, you pay a $ 20 fine.’
Berkley downplayed the memo’s verbiage Wednesday and insisted she was just acting at Adelson’s behest. But she was not just following orders _ she was advocating Adelson play the game, which he apparently refused to do.
Berkley essentially said in the memo and the tape _ and hardly backed away from it on Wednesday _ that Adelson had incinerated his relationship with many elected officials and powerful Las Vegans with his fiery anti-unionism and antagonism toward the convention authority. And the remedy she proposed was to reclaim the Democratic county commissioners (Erin Kenny and Yvonne Atkinson Gates) by helping them in their non-elected lives. They could have ‘gotten Erin’ by giving her uncle a $ 30,000-a-year job. And Gates ‘wants money’ so they could have curried favor by giving her a daiquiri kiosk.
The problem for Berkley is not only that this is so inflammatory, even explosive. But what she said appears to contradict her testimony before the state Ethics Commission during the investigation of Gatesgate.
The reactions will be multifarious. Some will question Berkley’s judgment in writing the memo. Others will say they knew her loquaciousness would someday land her in a jackpot. Others will lambaste Adelson for a vendetta.
For some, her comments about Las Vegas will ring all too true _ especially with Atkinson Gates’ ‘everybody does it’ defense on her daiquiri plan and the Cronyism Central now being exposed at the airport. Others will fret that she has set back whatever maturity the town has reached by her inveterate cynicism.
On Wednesday, Berkley continually invoked her own reputation for rectitude and contrasted it with the sleazy political hit she was absorbing. But she will have a tough time playing the martyr when she was advocating odious political tactics.
She also raised the issues of appointing judges and public campaign financing as two good ideas to inoculate politics against corruption. But there is no vaccine for venality. And Las Vegas _ and Shelley Berkley _ have either grown up or they haven’t.
Jon Ralston publishes The Ralston Report, a political newsletter. His column appears Sunday, Tuesday and Thursday.
Las Vegas Review-Journal
House panel to investigate allegations against Berkley
Steve Tetreault and Laura Myers
Updated July 10, 2012
WASHINGTON – In a move that shakes up the U.S. Senate race in Nevada, the House Ethics Committee announced Monday it will investigate allegations that Rep. Shelley Berkley used her office wrongfully to advance health policies that benefited her husband, a prominent Las Vegas doctor.
The committee’s leaders said the panel voted unanimously to establish a four-member subcommittee armed with subpoena powers to conduct the probe, a process expected to stretch through the summer and fall and cloud the Las Vegas Democrat as she campaigns for the U.S. Senate.
Berkley, a seven-term U.S. House member, has been working on Capitol Hill and on the campaign trail since late last summer under the shadow of questions about possible ethical conflicts, which she has denied repeatedly.
The race between Berkley and U.S. Sen. Dean Heller, R-Nev., is one of the closest Senate contests in the nation and could determine whether Democrats and their leader, U.S. Sen. Harry Reid, D-Nev., maintain control after 2012.
Jennifer Duffy, an analyst with the Cook Political Report, said the ethics probe is a blow to Berkley, giving Republicans stronger ammunition against her and probably keeping the matter open all the way to Election Day.
“The issue stays alive through the campaign, and Republicans got a little bit more juice behind it with the unanimous vote” from five Democrats and five Republicans on the panel, Duffy said.
“And they get to keep talking about it. And I think she’s more on the defensive now. In a race where everything counts, this is not something that Berkley needs hanging over her head. In a close race, everything matters.”
In a front-page story Sept. 6, The New York Times reported on intersections between Berkley’s advocacy on kidney care matters and the Las Vegas nephrology practice of her husband, Dr. Larry Lehrner.
The paper reported that in 2008, Berkley lobbied the federal Centers for Medicare and Medicaid Services to withdraw an order that would have revoked certification of the kidney transplant unit at University Medical Center, where her husband’s practice, Kidney Specialists of Southern Nevada, directed kidney services.
It also reported that Berkley, a member of the House Ways and Means Committee, sponsored at least six bills to expand federal payments and other assistance to kidney doctors, wrote letters to block federal regulations and appeared at fundraisers sponsored by a professional group that had an association with her spouse.
The news story triggered a complaint to Congress from the Nevada Republican Party charging Berkley “used her office to enrich herself,” in violation of House rules that forbid lawmakers from using their official positions for personal gain.
BERKLEY CAMPAIGN RESPONDS
Berkley’s campaign said Monday it was “pleased with the committee’s decision to conduct a full and fair investigation, which will ensure all the facts are reviewed.”
“We are confident that ultimately it will be clear that Congresswoman Berkley’s one and only concern was for the health and well-being of Nevada’s patients,” said campaign manager Jessica Mackler.
Democrats publicly rallied. Guy Cecil, executive director of the Democratic Senatorial Campaign Committee, said the organization’s support for Berkley’s Senate bid “remains as strong as ever.”
Reid said Berkley will fight through the investigation.
“Nevadans want a senator who will fight for them and Shelley has made it clear that no one will fight harder than her,” Reid said in a statement. “She is a strong advocate for Nevada’s middle class and will work to put Nevadans back to work.”
Heller, whom Berkley is trying to unseat in November, declined to comment.
Republican surrogates noted that the Ethics Committee’s decision to launch a full investigation was unanimous among its five Democrats and five Republicans, suggesting there may be more than has been made public.
“It speaks volumes that even Shelley Berkley’s Democrat colleagues unanimously voted to move forward investigating Berkley’s use of her office to enrich her and her husband,” said Rob Jesmer, executive director of the National Republican Senatorial Committee.
INITIAL REVIEW LEADS TO REFERRAL
In a preliminary review, the Office of Congressional Ethics found “substantial reason to believe” there were violations and recommended the full Ethics Committee take up the case.
The Berkley matter is the first referral the committee has accepted for a full investigation out of 13 preliminary recommendations in this Congress.
Berkley has defended her actions, saying they were motivated by her desire to help Nevada patients and not to line her husband’s pockets. Her wedding to Lehrner in 1999 propelled her to the upper levels of wealth among House lawmakers, with assets in 2010 valued at between $9.7 million and $21.2 million, according to the Center for Responsive Politics.
Berkley told the Las Vegas Review-Journal in an interview last month that she did not believe her Senate race against Heller would pivot on ethics, but rather “what are we going to do to get people back to work.”
Her advisers say they believe she can campaign effectively while under investigation. Berkley has portrayed herself as a friend of middle-class Nevadans, Latinos, women, veterans and other key voting blocs. She also is counting on the state’s Reid-erected Democratic machine, along with whatever coattails President Barack Obama generates, to forge a victory.
While Heller will remain above the fray, “the Republican outside groups will keep this going,” said David Damore, a political science professor at t
REPUBLICAN PAC PROMISES MORE ADS
The American Crossroads PAC spent $300,000 last month to run a television ad in Nevada reminding viewers of the allegations against Berkley. She aired a rebuttal the next day.
American Crossroads spokesman Nate Hodson suggested more to come.
“No ad up in Nevada at the moment, but as you know we raised the issue in ads first with a hefty buy,” Hodson said in an email. “The unanimous decision by the House ethics committee points to the fact that Shelley Berkley was more interested in enriching her family than working to fix the broken economy.”
Dan Hart, a Democratic operative not associated with Berkley’s campaign, seemed surprised that the Democrats on the panel had joined in opening an investigation. In his view, “there was no convincing evidence to move forward.”
The Berkley campaign was “going to have to deal with it no matter what happened today because the political ads were going to make an issue of it,” Hart said. “It’s not the best outcome, but it’s not the worst outcome. They could have delivered some sort of reprimand. But when you’re in a campaign, you want to leave this stuff behind you and get a result.”
Robert Uithoven, a GOP operative not involved in the Heller campaign, said Congress rarely investigates its members, and so the news coming less than four months from Nov. 6 is particularly bad, with implications for Berkley’s fundraising through the slow summer and her efforts to talk about issues that play to her strengths.
“I think everything becomes more complicated for her,” Uithoven said. “It’s tough to spin this in any positive way. It’s not only a distraction of time, it’s a distraction of resources.
“I don’t think it affects the Democratic or Republicans voters, but it could affect the huge number of independent voters in this state,” he added, explaining that independent voters “are probably more sick of Washington than any of the partisan voters are.”
The committee’s vote was taken June 29, the last day before the House members recessed for a weeklong holiday. The decision was announced Monday, their first day back, by the committee chairman, Rep. Jo Bonner, R-Ala., and the ranking Democrat, Rep Linda Sanchez of California.
In a four-paragraph statement, they said the investigative subcommittee would determine whether Berkley violated the House code of conduct or any other rules or laws “with respect to alleged communications and activities with or on behalf of entities in which Representative Berkley’s husband had a financial interest.”
The investigation will be led by Rep. Mike Conaway, a four-term Republican from Texas, and Rep. Donna Edwards, a three-term Democrat from Maryland. The other two members are Reps. Bob Latta, R-Ohio, and Adam Schiff, D-Calif.
HOUSE ETHICS MANUAL DEFINES RULE
The U.S. House code generally allows lawmakers to act on matters that affect a large class of people even if the individual “may stand to derive some incidental benefit along with others in the same class,” according to its ethics manual. For instance, it is permissible for lawmakers who are farmers to act on agriculture matters.
“Only when members’ actions would serve their own narrow, financial interests as distinct from those of their constituents should the Members refrain,” the manual states.
Punishment could range from expulsion, the most serious, to censure or reprimand, and possibly suspension.
Melanie Sloan, a former federal prosecutor who heads an ethics watchdog group, said there often is some amount of negotiating between the ethics committee and lawmakers accused of wrongdoing, with the goal to avoid having to convene a full investigation.
“There is so much strategy involved,” said Sloan, executive director of Citizens for Responsibility and Ethics in Washington. “They may have talked about resolving it with some kind of letter, but it may also be Berkley made a calculation of refusing to resolve it with a letter, thinking that would hurt her more.”
Sloan, who emphasized that she did not have inside information, said the Berkley case could widen the definition of what constitutes a conflict of interest for House members.
BERKLEY MAKES HER CASE
In fighting accusations that she pulled strings to save the UMC kidney transplant program, Berkley has pointed out that Nevada’s two other U.S. House members – Republican Reps. Jon Porter and then-Rep. Heller – joined in pressing federal officials to reconsider penalties against the hospital. Shutting down the kidney transplant unit would have cut off local care to more than 200 patients.
Berkley has said her sponsorship of bills that would have benefited kidney doctors were nothing out of the ordinary among more than 100 health-related pieces of legislation she has sponsored or co-sponsored.
“I wasn’t thinking about the politics of it, and I wasn’t worrying about the politics of it. It did not occur to me,” she said last month in an interview on the “Face to Face” news program. “My only concern was to provide good health care in the state of Nevada for the people that live here.”
Las Vegas Review-Journal
DA: Berkley’s suggestions broke no laws
June 06, 1998
By Jane Ann Morrison
Nothing he saw in a memo authored by congressional candidate Shelley Berkley advocating campaign contributions for judges in exchange for favors would constitute a crime, District Attorney Stewart Bell said Friday.
“It’s not a crime for people to believe that by making contributions to persons in authority that they can curry favor,” he said. “The important thing is for the elected officials to have the integrity that that not be a reality.”
However, some attorneys are questioning whether her legal advice crossed the boundaries of legal ethics, and a university ethics professor said she appeared to solicit public corruption and needs to apologize.
Berkley had told her bosses at the Sands hotel that it was important to give campaign donations to judges in order to be able to continue asking them for help with tickets and citations issued to hotel employees.
She also urged Las Vegas Sands Inc. Chairman Sheldon Adelson to give a job to County Commissioner Erin Kenny’s uncle and a daiquiri concession to County Commissioner Yvonne Atkinson Gates in order to get their needed votes for his new hotel, The Venetian. Adelson refused.
Bell said he didn’t know enough about the facts of those two suggestions to comment.
Mary Boetsch, chairwoman of the Nevada Ethics Commission, also declined to comment on Berkley’s statements. She cited the commission’s pending investigation of three county commissioners — Atkinson Gates, Lance Malone and Myrna Williams — about whether they should have disclosed personal relationships they had with people they voted to give lucrative airport concessions.
Berkley was giving her advice to Adelson in her role as Sands’ attorney and vice president of governmental and legal affairs.
State Bar counsel Rob Bare said he couldn’t speculate as to whether Berkley’s legal advice to her Sands bosses constituted any kind of violation of the code of ethics for attorneys.
One Las Vegas attorney, who asked to remain anonymous, said Berkley is walking close to an ethical violation.
“Offering someone a job and then saying essentially that we have them in our pocket, that’s very, very close,” the attorney said. But as to the judicial campaign contributions, he said, “She put down in writing what everybody does. The ones that are discreet don’t put anything in writing.”
University of Nevada, Las Vegas ethicist Craig Walton said Friday that Berkley needs to apologize to voters for offering advice that appeared to solicit corruption of two county commissioners.
“Of course, anything resembling the use of office for any kind of gain or advantage is forbidden by the ethics in government law. To undertake to corrupt a person is certainly wrong,” Walton said. “If (Berkley) is teaching newcomers to town (Adelson) that this is how we live around there, it’s bad advice.”
Berkley couldn’t be reached late Friday, but her campaign manager Gary Gray said “clearly she regrets some of this. She’s expressed that regret to a number of people. Shelley Berkley has already acknowledged to many that she had erred in her judgment, but it’s not really prudent to comment until we can see and listen to this tape that we’ve never been allowed to listen to.”
Gray declined to say who Berkley has apologized to, but Atkinson Gates said Berkley has apologized to her for saying in a tape-recorded conversation in 1997 with an acquaintance that the commissioner “wants money.” She also said Kenny’s vote could be obtained by hiring her uncle.
In an interview Wednesday, Berkley did not back away from her advice to Adelson, saying he could win approval for his project and the two commissioners’ votes if he did as she urged. She said while she wouldn’t have personally condoned her advice, she would give it again.
As the head of UNLV’s Institute for Ethics and Policy Studies, Walton said he is familiar with the code of ethics for attorneys.
Walton said as an officer of the court, “Your first duty is to the laws of the United States, and the laws of Nevada, then you serve the client. You don’t serve the client first and get around to the laws afterward.”
Walton said her memo that judges needed contributions before she could call them for help suggested corruption.
“It sounds like you make these contributions and you will be rewarded in a way other people are not allowed to. I wish she would make a clarification or even an apology,” Walton said.
Walton speculated that the Ethics Commission may want to look at some of the apparent contradictions between her January testimony and her candid telephone comments.
“The commission doesn’t want to leave the impression you can testify one way and if other information comes to light later that doesn’t matter,” Walton said. “It’s good for everyone to know that testifying is serious.”
He attended the January hearings over Atkinson Gates’ daiquiri proposal where both Berkley and Adelson testified.
“I saw they couldn’t both be telling the truth,” he said. “And the Ethics Commission didn’t pursue that much.”
He believes there will be political damage for Berkley “if she sort of stonewalls this.” He suggested she apologize and reject her views that giving campaign contributions and jobs for commissioners and their relatives is the routine way to do business in Las Vegas.
“She needs to say, `If you send me to Washington, I won’t do these kinds of things,’ then the campaign can go forward,” Walton said.
But he acknowledged if she reverses herself now, voters would wonder, “Which one of the Shelleys do I believe?
“But if she takes the approach that `the Sands and Adelson are after me and the tape is faked,’ that will alienate the voters,” Walton said.
Southern Nevada voters, particularly the influx of new people, “don’t like this idea that everybody is for sale and the public office is a public trough.”
New York Times
A Congresswoman’s Cause Is Often Her Husband’s Gain
September 5, 2011
LAS VEGAS — At the University Medical Center here, alarms were set off three years ago — kidney transplants were failing at unusually high rates, and some patients were even dying.
Federal regulators moved to shut down the kidney transplant program, but the proposed penalty brought a rebuke from Representative Shelley Berkley, Democrat of Nevada, who helped lead a successful effort to get the officials from Washington to back down.
In pleading for a reprieve, Ms. Berkley and other members of Nevada’s Congressional delegation said they were acting on behalf of the state’s families, citing dire health consequences if the program was halted. But the congresswoman’s efforts also benefited her husband, a physician whose nephrology practice directs medical services at the hospital’s kidney care department — an arrangement that expanded after her intervention and is now reflected in a $738,000-a-year contract with the hospital.
Ms. Berkley’s actions were among a series over the last five years in which she pushed legislation or twisted the arms of federal regulators to pursue an agenda that is aligned with the business interests of her husband, Dr. Larry Lehrner. In addition to the hospital contract, he operates a dozen dialysis centers in Nevada and has played a central role in an industry campaign to lobby members of Congress — including his wife — on behalf of kidney care providers.
Dr. Lehrner helped build a political action committee that has regularly turned to Ms. Berkley to champion its causes. She has co-sponsored at least five House bills that would expand federal reimbursements or other assistance for kidney care, written letters to regulators to block enforcing rules or ease the flow of money to kidney care centers and appeared regularly at fund-raising events sponsored by a professional organization her husband has helped run.
“This is a very serious conflict of interest,” said James A. Thurber, a former Congressional aide who has helped revise ethics rules and is now director of the Center for Congressional and Presidential Studies at American University. “There is an official use of power here to help him and the family — and I think that is unethical.”
Ms. Berkley declined an interview request for this article. But in a statement, she said she was an advocate for a broad range of health care causes and had never acted specifically to help her husband’s practice.
“I won’t stop fighting to give Nevadans access to affordable health care just because my husband is a doctor, just like I won’t stop standing up for veterans because my father served in World War II,” she said.
Dr. Lehrner, though, said he was unabashed about pressing his wife on issues that were important to his practice.
“She is definitely aware of my positions, and the R.P.A.’s positions,” he said in an interview, referring to the Renal Physicians Association, the trade group he has helped run. “We talk politics all the time. We talk medicine.”
Congressional ethics rules are murky — lawmakers can take steps that financially benefit a spouse as long as the benefit is broadly available and there is no “improper exercise of official influence.” Lobbying of lawmakers by their spouses is prohibited, but there is no ban on spouses’ informally acting as industry advocates, like Dr. Lehrner, who is not a registered lobbyist.
The intermingling of Ms. Berkley’s public and private life, though, is striking even among her peers on Capitol Hill, and surfaced in an examination by The New York Times of how lawmakers forge particularly close ties to industries with an agenda in Washington.
As Ms. Berkley has pushed the cause of kidney care in Congress, her husband’s practice has boomed, thanks in part to his joint ownership of dialysis centers with DaVita, a giant in the industry and one of Ms. Berkley’s biggest campaign contributors. She is one of the richest members of Congress, as she or her husband hold assets valued from $7 million to $23 million, according to her most recent financial disclosure forms.
Now running for the Senate seat held by John Ensign until his resignation this spring amid an ethics scandal, Ms. Berkley drives around Nevada in a white Ford Fusion (“United States Congresswoman 1” reads her license plate, referring to her Congressional district).
She often talks about her modest upbringing, in which she ate at Taco Bell while scraping by as a cocktail waitress at a casino resort hotel here. She also frequently mentions her husband’s work — she delivered a “certificate of Congressional recognition” at the ribbon cutting of his latest dialysis center last year — and cites his experiences as evidence for why Congress must act to change federal laws or policy.
“I’m sure he didn’t think in medical school that in his 60s he still would be taking calls on the weekends, but that’s the reality of the situation when you don’t have enough nephrologists to care for the population that you’re living in,” Ms. Berkley said at a House hearing in 2009, at which she pushed for higher federal reimbursements for medical specialists like her husband.
Concerns About Care
Shawn Rowlett, 40, showed up at the University Medical Center with his wife, pale and weak, four days after he had been discharged from the hospital’s transplant center with a new kidney in February 2008. But now he was hemorrhaging, medical records show.
After seeing the hospital’s chief transplant surgeon, Mr. Rowlett was left in the emergency room for five hours before being admitted, according to his wife, Dionne Rowlett. He died less than two hours later, court records show.
“The care was just horrible,” Ms. Rowlett said in a recent interview, shortly after the hospital settled a malpractice suit for $77,500 — the maximum amount allowed in Nevada because of a cap on malpractice payments from public hospitals. (Dr. Lehrner and his practice were not named in the lawsuit.)
Mr. Rowlett’s death and four recent others in the first year after the surgery, as well as 10 transplant failures, were part of a troubling pattern — the death and failure rates were more than twice the expected level. That led the federal Centers for Medicare and Medicaid Services to issue an order to revoke the certification for the hospital’s transplant program — which does about 50 transplants a year — and cut off Medicare financing, effectively shutting the program down.
Brian G. Brannman, the medical center’s chief executive, acknowledged that the program was in disarray back then. In a recent interview, he said the hospital was mostly to blame, as its lone transplant surgeon had not been provided with a sufficient support system. Federal regulators also questioned the qualifications of the physician whom Dr. Lehrner and his partners had assigned to help screen transplant patients, leading the hospital to acknowledge in writing that he “was not formally trained in transplantation.”
Desperate for a second chance, hospital officials appealed to members of the Nevada Congressional delegation. Ms. Berkley sent a letter, signed by two other lawmakers, warning that cutting off money would “jeopardize the health of hundreds” of constituents. She and the other lawmakers helped set up a series of conference calls between hospital and Medicare officials.
Soon after, the Centers for Medicare and Medicaid Services, for the first time, agreed to override provisions that would have required decertifying the program. In exchange, the hospital promised to remedy the problems.
“I spoke to the head of C.M.S. yesterday,” Ms. Berkley told local television reporters in announcing the breakthrough. “When I got off the phone, I had a good-faith belief that we were going to come up with a compromise that works for everybody.”
Kerry Weems, then the agency’s acting administrator, said he recalled speaking with Ms. Berkley and Jon Porter, then a Republican House member from Nevada, about the program. Mr. Weems could not recall if Ms. Berkley mentioned her husband’s ties to the hospital. But he said he would have approved the agreement anyway.
“You want to find a way to ‘yes’ — not based on any individual stake that a Congress person might have,” said Mr. Weems, who recently left the agency. “But this really was the only transplant center in Nevada.”
Part of the deal involved significantly expanding the staff of kidney specialists. The hospital turned to Ms. Berkley’s husband to recruit two transplant nephrologists, who, Mr. Brannman said, work more directly with the hospital’s new transplant surgeon.
Mr. Brannman said the selection of Dr. Lehrner’s practice — it was the sole bidder for the contract renewed in December 2010, which increased annual fees by 25 percent — had nothing to do with Ms. Berkley, whom he said he did not know well. The various staffing changes have significantly improved the transplant program’s performance in recent years, according to Mr. Brannman and federal officials.
Jessica Mackler, Ms. Berkley’s campaign manager, said the congresswoman had no conflict of interest when she intervened, because the money the hospital uses to pay her husband does not directly come from the federal government, and other members of the state’s Congressional delegation were involved in the effort to save the transplant program.
“There really is no issue here,” Ms. Mackler said.
But Mr. Reems, the former Medicare official, is not so sure, given Ms. Berkley’s record of interventions on kidney care issues.
“You never want questions being raised,” he said, “and that means you need to try to avoid any move that makes you seem anything less than an impartial public servant.”
At the annual conference of the Renal Physicians Association in Austin, Tex., in 2008, Dr. Lehrner showed a slide of a smiley-faced doctor with a screw being forced into his mouth, and then ticked off a list of steps the group could take to fight cost control efforts in Washington.
“We have been screwed by our policy makers for 20 years,” he told the crowd. “Only you can prevent the destruction of our profession.”
The doctors, he said, could donate money directly to members of Congress, volunteer on their campaigns, contribute to the political action committee that he had helped build at the Renal Physicians Association and travel to Washington to personally appeal to lawmakers, as he himself does.
Dr. Lehrner added one more option to the list. “Marry an elected official,” he said, evoking laughter.
He may have been joking, but Ms. Berkley, 60, who was first elected in 1998 — a year before she and Dr. Lehrner married — has been largely sympathetic to the doctors’ cause.
The Medicare system spends an estimated $27 billion a year, or about 6 percent of overall Medicare spending, to help some of the approximately 550,000 Americans who have so-called end-stage kidney disease. It is the only chronic disease in which the most severely ill patients get nearly free care, regardless of age.
But Congress and federal regulators, alarmed over the surging costs, have sought to control spending in recent years, provoking protests from Dr. Lehrner and the physicians’ association, as well as the drug companies and dialysis operators that dominate the industry.
When Dr. Lehrner assumed a series of leadership roles at the renal physicians group, Ms. Berkley’s agenda in Washington started to overlap with her husband’s. He became the single biggest contributor to the association’s political action committee, while also serving as its chairman. And she has received the largest share of its contributions, totaling $7,000 since 2007. Over all, kidney care doctors, companies and lobbyists have donated at least $140,000 to Ms. Berkley’s Congressional campaigns.
Dr. Lehrner’s flourishing practice now includes 21 doctors who work out of seven offices in the Las Vegas area, as well as 11 dialysis centers, 10 of them run in a joint venture, started in 2003, with DaVita. He is a paid national speaker for and has received research grants from Amgen, a major supplier of drugs to dialysis centers.
The activities of these interest groups are closely aligned at times.
In early February 2008, for example, Ms. Berkley received a series of campaign contributions, first $1,000 from Amgen, then $2,000 from Kidney Care Partners, a trade group backed by Amgen and DaVita, then $3,000 from DaVita, and then $1,000 from Dr. Lehrner’s group, the Renal Physicians.
The day that two of those checks were delivered, Ms. Berkley sent a letter to Representative Pete Stark, Democrat of California, then chairman of the House Ways and Means subcommittee with jurisdiction over Medicare, warning him to move carefully in considering changes in compensating doctors who provided dialysis treatments. Echoing concerns raised by the industry, the congresswoman said she worried that patient access to care could be affected.
“While I support initiatives to improve quality and efficiency in Medicare, I do not believe that these efficiencies should come at the cost of patient well being,” Ms. Berkley wrote, without mentioning her husband’s interest in the matter.
Regulators moved ahead with the new reimbursement system, although it was adjusted in a way that the dialysis and drug companies ultimately embraced. This year, after Medicaid threatened to cut 3.1 percent of the money for dialysis — to save an estimated $250 million annually — Ms. Berkley led an effort in the House to oppose the cut.
Less than a month later, the agency reversed its position, winning Ms. Berkley a personal thanks from industry leaders in press releases and new campaign donations.
“She is highly knowledgeable about this complicated and critical area of health care that impacts millions of Americans,” Skip Thurman, a DaVita spokesman said in a written statement, of the company’s donations — which have accelerated as Ms. Berkley runs for the Senate. “The kidney community’s support of her is entirely appropriate.”
Shelley Berkley faces formal ethics investigation
July 9, 2012
By Ed O’Keefe
Rep. Shelley Berkley (D-Nev.), photographed at the U.S. Capitol on June 5. (Bill Clark – CQ Roll Call
The House Ethics Committee has voted unanimously to launch a formal investigation into allegations that Rep. Shelley Berkley (D-Nev.) used her position to benefit the financial interests of her husband — a blow to her candidacy in one of the nation’s most competitive Senate contests.
The ethics panel said Monday that it will probe “alleged communications and activities with or on behalf of entities in which Representative Berkley’s husband had a financial interest.”
News reports last fall detailed moves made by Berkley to sponsor legislation or influence federal regulators in ways that favored the business interests of her husband, Larry Lehrner, who operates dialysis centers in Nevada and has actively lobbied lawmakers to help kidney care providers
Berkley, 61, is a seven-term Las Vegas congresswoman and candidate in a closely watched Senate race against Sen. Dean Heller (R-Nev.) that observers believe could be a pickup for Democrats.
In a statement, Berkley’s campaign manager, Jessica Mackler, said: “We are pleased with the committee’s decision to conduct a full and fair investigation, which will ensure all the facts are reviewed. We are confident that ultimately it will be clear that Congresswoman Berkley’s one and only concern was for the health and well being of Nevada’s patients.”
The campaign’s statement noted that Berkley worked with other members of the Nevada congressional delegation, including Heller, to save the dialysis centers that were assisting more than 200 Nevadans seeking kidney transplants. Campaign aides suggested that closing the transplant centers ultimately would have decreased the quality of local health-care services, increased Medicare costs and would have boosted Lehrner’s income because he would have needed to provide more care to patients.
But the ethics committee’s decision signals that it agreed with the conclusions of the Office of Congressional Ethics, which prepared a report on the allegations. Under House rules, the ethics panel isn’t required to release the OCE’s full report until the committee closes its investigation or the end of the current congressional session.
The ethics panel first announced in March that it planned to launch an initial inquiry into unspecified allegations against Berkley.
This is the first time the ethics panel has empaneled a formal investigative subcommittee based on an OCE report since October 2009, when it agreed to probe allegations against Reps. Maxine Waters (D-Calif.) and Laura Richardson (D-Calif). In recent years, the committee also has launched formal investigations against Rep. Charles E. Rangel (D-N.Y.).
Since its inception in 2008, the OCE has conducted 92 preliminary reviews of allegations against lawmakers. Of those, the OCE has referred 32 cases to the ethics committee for further review.