Barbwire by Barbano: Joe vs. the volcano and explosive nuclear follytix

CARSON CITY - On Oct. 9, Sen. Joe Neal, D-North Las Vegas, traveled to Carson City to face down the most powerful man in Nevada.

I was surprised to see Las Vegas casino mogul Steve Wynn show up in person. The wealthy usually send their minions to do the dirty work. The king is only supposed to come down from the counting house to collect tribute after certain victory.

Wynn walked away with nothing, smoked by a lone wolf populist liberal. Mr. Wynn tried to show the Nevada Tax Commission the error of its ways. That body is charged with implementing a tax break Wynn juiced through the 1997 legislature over Neal's strenuous objections.

The tax commission voted in August that if Mr. Wynn wants to take advantage of several multi-million dollar loopholes for his $300 million tourist attraction art collection, he must admit the public free for at least 20 hours per week, 35 weeks a year.

The tax break never would have passed had not such "educational" display hours been added as a late maneuver. If Nevada school children are going to lose tax revenue to subsidize casino Van Goghs, the law says they should occasionally get to see what they've paid for.

What really fried Wynn's fritters this time was a submission Sen. Neal made for the record. It contained a quote from an item by veteran southern Nevada journalist Ken Ward in the Sept. 2 Reno News & Review.

"Steve Wynn...recently said 'Every museum in the world charges admission in order to survive.'

"That statement," Ward wrote, "might have impressed the Nevada Tax Commission and a handful of readers in southern Nevada. But there's a problem: It's total balderdash.

"Fact is, major art museums coast to coast are free to the public. The Metropolitan Museum of Art in New York has never charged admission. Los Angeles' new Getty Museum doesn't, either. And, last time we checked, none of them had a money-making casino attached."

Wynn was livid. He took the microphone to trash both Ward and Neal for misrepresenting reality. He said he could not understand why Neal "constantly disseminated false information...Why this turned into a populist 'Don't let the rich guy get away with something' is inexplicable to me," Wynn said.

Should you ever need to define moral obtuseness, save that quote.

Wynn could not resist a political potshot, intimating that Neal's real intent was to bolster his "abortive campaign for governor." (Apparently, no one has informed Mr. Wynn that the Sept. 1 primary election is over and Sen. Neal lost.)

Only one commissioner sided with Wynn last August. On Oct. 9, when they voted 5-3 to reconsider their admission fee decision, I thought Neal was toast. When they finally decided 5-3 to preserve the free admission under the law, I was shocked.

Joe Neal had fought and won against the explosive personality who built his own volcano in Las Vegas.

Perhaps the commissioners became uncomfortable when faced with answering one question posed by a nondescript citizen: What has changed between August and October which causes you to reconsider?

Wynn railed against what he called "unbridled admission," but unbridled ambition was the order of the day. It did not carry the day.

A miffed casino magnate afterward announced that he would nonetheless charge $10 a head when his new Bellagio megaresort opens in mid-October. He can still get his millions in tax breaks if he implements a few free hours for the public, but seems reluctant to do so.

Last August, he said he wanted to charge "because I don't want to cheapen the experience."

Wynn learned an expensive lesson at the hands of Joe Neal. In order to maintain political power, don't get into a fight you haven't fixed upfront. Otherwise, people might begin to doubt your clout.

SPIN THE BOTTLE UPDATE (Oct. 18) - Right after Mr. Wynn's August defeat at the tax commission hearing in Las Vegas, the Mirage myth-making machine went into overdrive. Wynn himself traveled to Reno to meet with the editorial board of the Reno Gazette-Journal.

Several newspapers got sucked in by Mr. Wynnderful's spin. First to fall were the estimable Reno and Las Vegas alternative weeklies. An extensive article entitled "Monet Grubber" by longtime southern Nevada reporter Steve Sebelius appeared in both Las Vegas City Life and the Reno News & Review.

Here are the opening lines: "Let's get one thing straight about the tax break law for fine art passed during the 1997 Nevada Legislature at the behest of Mirage Resorts Chairman Steve Wynn: It doesn't apply to him.

"Wynn and his company have registered with the state as art dealers, which means they're automatically exempt from paying any sales tax on the inventory, as long as it's for sale, the same way car dealers aren't taxed on their unsold fleets," Mr. Sebelius reported.

It ain't necessarily so. Wynn's status as an art dealer is still up in the air. On Oct. 8, the Reno Gazette-Journal reported that the Nevada Tax Commission was commencing a two-month investigation to determine "if Steve Wynn actually is an art dealer."

Underlying the investigation is Wynn's desire to lease some of his art collection to his gambling properties.

Last July, the Nevada Tax Commission held a workshop on the art tax issue in Carson City.

Mr. Wynn's lawyer argued for extra-legal expansion of the law by the regulatory body. Because the law is silent with respect to admission fees and leasing, Wynn attorney Jeff Conway said "if it is not prohibited, then it is permitted."

Wrong.

I interviewed a district judge on that subject a couple of years ago. He agreed with Sen. Neal's position: If if it's not in the law, it is not permitted.

At the July workshop, deputy attorney general John Bartlett noted that the law allows tax exemptions only for art purchased for display and re-sale. Art purchased for lease falls outside the law and is thus not exempt from sales, use and personal property taxes, Bartlett said.

Mr. Wynn failed to include leased art in the bill he pushed through the last legislative session.

Thus, a waiver of sales/use tax and personal property tax would certainly apply personally to him as lessor of high-priced art to his gambling clubs.

Nonetheless, Mr. Wynn continues to push the idea that he's exempt. In that same Oct. 8 Reno Gazette-Journal article, he continued to spin the idea that he's already beyond his own law.

"Wynn said he intends on charging $10 (admission) anyway, explaining that he's an art dealer, therefore making his collection exempt from any Nevada sales taxes," longtime reporter Bill O'Driscoll wrote.

Use tax is the flip side of the sales tax coin. It applies to property USED to make money, rather than re-sold. The Nevada Dept. of Taxation says a use tax, calculated in the same manner as applicable sales tax, must be paid on "merchandise, equipment or other tangible personal property purchased without the payment of a Nevada tax and used by you rather than being resold."

If Mr. Wynn follows through on his oft-reported plan to lease some of his art work to his corporate parts, the taxes discussed in his own law would certainly seem to apply to him according to state tax counsel Bartlett.

Mr. Sebelius' article even noted that Wynn is "also making an additional $4.8 million per year by leasing some of his personal collection to the Bellagio."

The king's sins of omission should be corrected in future reports.

(For a complete background on the art tax loophole controversy, go to http://www.neal98.org See references, below,* for news coverage of the Oct. 6 hearing and aftermath.)

ATTENTION ANY RAILROAD WORKER OR RETIREE WITH A LONG MEMORY: Please contact me. I am looking for old timers to interview about the railroad people who built Sparks as the Rail City. I want folks who might remember when there was little to the town but the tracks and the future.

BUY LOTS OF COPIES of the October 20 edition of "Woman's World" magazine, available for just a buck and a quarter at any grocery checkout until Tuesday, Oct. 20, when the next edition comes out. The national magazine carries a full page story about Rosalind Clarke, the California visitor who saved Assemblyman Bob Price's (D-North Las Vegas) life at the Reno airport earlier this year. The magazine used a photo which first appeared with this column last April 5.

NUKANOVICH RETURNS: Former Congresswoman Barbara Vucanovich, R-Nev., has tried to defend the nuclear waste voting record of her former colleague, Rep. John Ensign, R-Las Vegas.

U.S. Sen. Harry Reid, D-Nev., Ensign's current opponent, has pointed out that Ensign voted for a May 18, 1995, measure calling for high level nuclear waste storage at the Nevada Nuclear Test Site.

Vucanovich "said Nevada has kept nuclear waste out of the state because the congressional delegation has been united," the Carson City Nevada Appeal reported.

"Harry Reid is threatening that unity with his claims about John Ensign," she said.

The facts are otherwise. In 1983, Vucanovich's boss, Sen. Paul Laxalt, R-Nev., ordered his freshman subordinates, Vucanovich and Sen. Chic Hecht, R-Nev., to adopt a "wait and see" attitude on nuke waste. Washington read that as a reflecting a softening of Silver State public opinion. The nuclear train soon started coming our way.

Vucanovich has a long record of decrying Nevada nuclear waste storage while at the same time helping it along.

On May 23, 1991, in an interview with Reno KRNV TV-4 reporter Victoria Campbell, Vucanovich announced her support for temporary ("50 years or something") high level storage� in Nevada. (See this column of June 23 and 24, 1991, for a verbatim transcript of Campbell's reports. It can be accessed at any library housing the Daily Sparks Tribune on microfilm.)

Vucanovich nonetheless told the Carson City paper on Oct. 9 that "having fought the nuclear power industry myself, I could not sit quietly by and watch (Reid) mislead people about John Ensign."

What fight? In their first year in office, Vucanovich and Hecht both made Ralph Nader's top 10 of those taking the most nuke money while most consistently voting the nuclear lobby's way. Vucanovich even took $1,000 from the main front group promoting the Nevada dumpsite.

For a full history of Laxalt-Vucanovich nuclear support, see this column of April 13, 1997.

Mr. Ensign would do well to look for a more credible defender.

Be well. Raise hell.

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* For news coverage of the tax commission hearing, go to the Associated Press, the Las Vegas Sun or the Las Vegas Review-Journal.

On Oct. 8, the Carson City Nevada Appeal joined the Sun, Review-Journal, the Daily Sparks Tribune, City Life, the Reno News & Review and several Nevada small county newspapers in severely criticizing the Wynn loopholes.

"The fallacy of the exempt-art legislation strikes home when one remembers that the same Legislature wouldn't exempt hearing aids from sales tax.

"Hearing aids.

"If there's new legislation to be heard next year, it should be to repeal the sales-tax exemption on art," the capital city editors concluded.
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