Real Clear Politics:
Last month, as the Senate was busy negotiating the final details of its Ukraine aid package, Majority Leader Harry Reid became temporarily distracted with a campaign finance issue. Since winning re-election in 2010, Reid’s campaign had purchased gifts for supporters and donors from vendors like Bed Bath & Beyond, Amazon, Nordstrom, and the Senate gift shop, among others. But one round of spending was directed to a less recognizable firm: Ryan Elisabeth, a jewelry line.
In 2012 and 2013, the campaign spent $31,267 purchasing gifts from the company, which is owned by Reid’s granddaughter, Ryan Elisabeth Reid. All told, she took in nearly seven times more cash than all vendors of donor gifts combined during that period of time.
Veteran Nevada political journalist Jon Ralston first reported the news after receiving a tip about the expenditures. (Ryan Elisabeth’s last name did not appear on the FEC reports, and the senator’s office initially failed to confirm her identity.) While Sen. Reid does not appear to have broken the law, he understood that the purchases created a perception of favoritism. Lamenting the unwanted attention heaped on his granddaughter, he decided after the news broke that “it would be best to pay for her work out of my own pocket.”
This was not the first time that Reid had mixed family and politics — or potentially run afoul of ethics rules.
Harry Reid has spent more than 40 years in government, starting as a small city’s attorney and eventually becoming the most powerful senator in the country. He has raised tens of millions of dollars in political contributions, established himself as an institution in Nevada politics along the way, and made himself a very wealthy man. His humble roots — from growing up in a remote desert town to working six days a week as a Capitol police officer while in law school — are legend in Washington and Nevada. Reid exhibits the toughness of a once destitute boy who completely transformed his life through determination, hard work — and good luck.
Contrary to popular belief, Reid arrived in Washington wealthy; he had a net worth of at least — and likely more than — $1 million, according to the Las Vegas Review-Journal. Although Reid had spent most of the previous 15 years in public office, or pursuing public office, he still proved to be a robust earner. After his term as lieutenant governor ended in 1975, he would not return to public office full time until 1983. (The Gaming Commission is only part-time work.) That left Reid approximately eight years to work as a private-practice attorney.
As a former public official with strong political connections, he found lucrative work in Las Vegas. It appears his personal boom was simply part of the broader expansion of Nevada’s economy. Some attorneys at the time, particularly those with political networks, would occasionally receive payment in the form of real estate. Given Nevada’s rapid growth, such payments would become extremely valuable over time. It’s unclear if Reid received land as compensation then, but he certainly made good money and invested in real estate early on.
Theoretically, working as a lawmaker should have severely limited Reid’s earning potential. In the early 1980s, members of Congress received a salary of about $70,000 per year. Though pay has generally risen — and Reid receives more than most lawmakers because of his leadership position — he has never earned more than $200,000 per year in salary.
Yet, his estimated net worth peaked at around $10 million just a few years ago, and he has remained consistently wealthier than when he entered Congress. (Reid reported that his net worth in 2012 was somewhere between $2.8 million and $6.3 million. His 2013 financial disclosures will be released later this year.) As of 2012, real estate composed about one-third of his portfolio. The rest was made up of government bonds; stakes in energy, electronics, pharmaceutical, and chemical companies; and other investments. He also possesses significant mining claims potentially worth hundreds of thousands of dollars.
How did Reid manage to grow his net worth so significantly while raising a large family, on a public official’s salary, and incurring the expenses associated with maintaining two residences on opposite sides of the country? Reid has lived frugally — before buying a house in recent years, he kept just a trailer in his hometown of Searchlight — and he has made undeniably savvy investments. More significantly, however, is his willingness to enter political and ethical gray areas to make money.
Reid has walked a fine line over the years, occasionally breaking rules or engaging in brazenly unseemly behavior during his pursuit of wealth. Further, he has also used his position to save money in ways that the general public can’t — a practice that creates public relations issues and raises questions about the senator’s ethics. As for any illegal behavior or obvious wrongdoing, Jon Ralston told RCP, “There’s been some smoke but there’s never any fire on that.”
There is quite a bit of smoke.
There’s a bunch more and you should go read it.
The real problem isn’t Harry Reid. Even if every dollar he made was earned legally, the whole system is corrupt. There are all kinds of ways to payoff politicians, including speaking fees, book deals, jobs for family members, jobs when they leave office, sweetheart land deals, insider trading . . . the list goes on and on.
The ones who get in trouble are the ones who get sloppy and greedy. The honest ones get corrupted. Literally “everyone” does it. Ask yourself this: How did Bill and Hillary Clinton accumulate more than $100 million dollars AFTER he left office? When he first left office Bill was making $1 million a speech. That’s a lot of money just to listen to Bubba talk.
As long as paying off politicians is a good investment, people with money will pay off politicians. The bigger and more powerful government is, the more incentive there is to bribe government officials.
That’s why I support smaller government, with more power at the state and local levels. That won’t end corruption, but it will spread it out and reduce the scale.