Last December, more than a month before the 2013 legislative session began, Gov. Brian Sandoval decided he would support a tax increase.
The decision surprised many in political circles and for good reason. Sandoval governs on the fundamental premise that higher taxes would halt the economic recovery.
He justified his early support for increased tax revenue to hire more cops in Clark County as sound public policy — going against the advice of his own policy director, according to emails obtained by the Sun.
In this instance, Sandoval adopted advice from two outside political advisers, one of whom argued that personal and political relationships also should be determining factors in the governor’s decision, according to the emails.
The emails offer a rare glimpse into who holds sway at the governor’s office, including the role of the two lobbyists and close personal friends of Sandoval’s who talked him into running for governor in the first place — and who have agendas of their own.
The December email exchange details a heated debate among Sandoval’s senior staff in the governor’s office and his political advisers — including lobbyists Pete Ernaut and Greg Ferraro — over how to frame Sandoval’s decision to support the “More Cops” tax.
The proposed law wasn’t an outright tax increase. Voters supported the measure in 2004, and the law gave authority to the county commission to increase the sales tax.
Still, Sandoval has been consistent in his opposition to tax increases.
Ultimately, according to the emails, the two political consultants prevailed in persuading Sandoval to issue an explicit declaration of support for the measure, overcoming objections by the governor’s chief of staff and policy director who argued for a position reflective of Sandoval’s blanket opposition to tax increases.
Ernaut disagreed with the staff and wrote in a lengthy email: “First, Sheriff (Doug) Gillespie is a good man, a popular sheriff, and our friend. Second, the police union stepped out against the grain and was one of the only public employee unions to support the governor in his last election as well as his election as (attorney general).”
The fact that Gillespie and the police union are political allies “is not justification to blindly support the measure,” Ernaut wrote — but it was still good reason to give the tax talk a fair hearing, he said.
Ernaut ended his argument with a simple declaration to Sandoval’s senior staff: “Opposing this, in my opinion, would be a big mistake.”
At the time, Sandoval’s senior staff did not know that Ernaut, president of government affairs at R&R Partners, was a paid lobbyist for the Las Vegas Police Protective Association, the labor association for rank-and-file police, which would benefit from more money to hire police officers.
LVPPA director Chris Collins said R&R Partners was hired as a backup lobbying team to help the union’s new in-house lobbyist build relationships and keep tabs on the many bills before the Legislature, not to help them push through the More Cops bill.
But the More Cops bill ended up as one of the most hotly contested measures before the Legislature this year before being passed in an early-morning special session — and it was R&R Partners that drove the final frenzied negotiations that resulted in the bill’s success.
Ernaut and Ferraro, president of the Ferraro Group, maintain there is nothing surprising about their involvement in working with staffers to craft Sandoval’s official position statements on policy issues. And they stress Sandoval had already made the initial decision to support the tax before the email exchange took place.
“It’s no secret the governor and I are close friends; we’ve been friends since college,” Ernaut said. “He asks for my advice from time to time, and I give it to him. Sometimes he agrees, sometimes he disagrees.”
Ferraro said: “I think the governor gets opinions from lots of different people. Sometimes they are in agreement, sometimes they’re not. But he makes the final decision. If the governor or his staff ask for my viewpoint, I’ll offer it.”
Sandoval’s chief of staff, Gerald Gardner, who was involved in the email discussion, said he does not frequently involve the political advisers in matters of the governor’s office, but staffers and the governor ask them for advice from time to time.
“This is an example of an occasional conversation we may have with some of the governor’s most trusted personal friends, people he’s known 30-35 years,” Gardner said of the email exchange.
Gardner noted the exchange was not a debate about whether Sandoval should support the More Cops tax — a measure that allows the Clark County Commission to raise the sales tax from 8.1 percent to 8.25 percent.
Sandoval had already made that decision, personally offering his support to Gillespie before the email debate.
“We were engaged in the discussion to talk about communicating this issue,” Gardner said.
The email exchange was sparked by a question the Sun posed to Sandoval’s public information officer, Mary Sarah-Kinner, on Dec. 18: Would Sandoval support the bill to allow the county commission to raise the tax to hire more police officers?
Just before 9:30 p.m. that night, Sandoval’s top campaign consultant Mike Slanker, who is not a state employee, sent an email to the personal email accounts of the governor, Kinner, Sandoval’s policy director Lucas Foletta, Gardner and Ferraro, saying the “key to a statement on this is not opposing the voters’ will in Clark County.”
In 2004, voters gave the Legislature the authority to empower the commission to raise the tax to fund police hiring. Half of the tax increase was implemented. Gillespie is now asking for the second half.
Slanker’s email prompted Foletta to question whether Gillespie could effectively manage the department’s finances.
“It’s worth noting that Gillespie is not exactly knocking it out of the park as a financial manager,” Foletta wrote. “It was only three or four weeks ago when we were reading about a $40 million radio system that doesn’t work.
“I’m a little worried that (Commissioner Steve) Sisolak, who is on the police oversight panel that oversees Metro, knows these facts very well and could make us look like financial management isn’t important to us.”
Sisolak, a Democrat, has openly contemplated a run against Sandoval in 2014.
Slanker appeared to heed Foletta’s concerns.
“These are all great points if we actually have the political wiggle room here,” Slanker wrote. “I share fears about firefight(er) type stories down the road about the cops.”
Recently, firefighter pay, overtime benefits and retirement pay have been criticized for burdening taxpayers.
Unbeknownst to Foletta, Sandoval had already told Gillespie he’d support the More Cops measure.
“Are we already in on this deal with our statement to Gillespie?” Slanker asked.
Slanker then looped Ernaut into the chain. Ernaut’s reaction to Foletta’s skepticism was immediate.
“Whoa, everyone,” Ernaut wrote, adding to a growing string of email. “Many of the facts on the thread below are quite a bit off ... The cops are very important to us. Please do not rush to judgment on this or send any statement until we can thoroughly vet it.”
Gardner then assured Ernaut a statement wouldn’t go out until the next day.
At 1 a.m., Ernaut sent a lengthy email reminding the group that Gillespie and the police union are political allies and detailing the need for additional funding for police in the wake of the economic recession.
Ferraro then chimed in with “two more political points you need to consider”: Legislative leaders from both parties support the tax, as do the valley’s local governments.
In fact, the unanimous local government support hasn’t exactly materialized. The county commission, citing concerns from a public that has been inundated by troubling headlines involving the police department, decided this month to table the issue, raising questions about when and whether the measure will actually be passed.
The email debate continued into the next day, as the group wrestled over whether Sandoval should simply stay out of the way and let the Legislature decide the issue or whether he should actively support it.
In theory, Sandoval could have said he had no power to stand in the way of a two-thirds vote of the Legislature or that he wouldn’t oppose the measure.
Foletta worried that support of the More Cops tax would set a precedent and that Sandoval might next be called upon to support a sales tax to fund school construction in Washoe County.
Indeed, the Washoe schools tax bill was the top priority for lawmakers in Sandoval’s home county. The school district is on the cusp of running out of funds for construction and maintenance projects.
The governor’s early, explicit support of the More Cops bill, a measure that had yet to make it through the legislative process, was a departure from his typical stance of refusing to take a position on bills that hadn’t reached his desk.
It also differed from his stance on the bill to raise sales and property taxes in Washoe County to fund school maintenance projects. In its early form, that bill would have raised taxes outright rather than handing the decision to the county commission.
Sandoval voiced his opposition to the Washoe schools bill before it was amended to require a two-thirds vote of the county commission. He ultimately signed that measure.
But as the team debated the More Cops bill, an exasperated-sounding Foletta was not ready to back down.
“And not for nothing, but our position in opposing tax increases hasn’t exactly been about process — i.e., the governor is against state levied taxes — it’s been about the overall effect of taxes on the economy. We have spent two years talking about how we need to keep government spending where it is to allow ourselves to grow out of the recession, and now we’re saying that we won’t stand in the way of a tax that makes that more difficult.
“And we’re doing it to the benefit of a constituency that adds virtually no value to the state’s economic recovery and isn’t even popular with the people of Clark County.”
This wasn’t the only time Foletta tangled with Ernaut over a policy issue before the governor. In April, Foletta resigned from the governor’s office amid heated negotiations on a major piece of energy legislation backed by NV Energy.
Ernaut, who also is NV Energy’s chief lobbyist, pushed hard for Sandoval’s support of the energy measure in the early stages of negotiations, while Foletta and others urged Sandoval to remain neutral. Sandoval ultimately threw his support behind the measure.
Over Foletta’s objections on the More Cops question, the political advisers resumed debating the best wording of a statement of Sandoval’s support.
They settled on the statement that was printed in the Sun on Dec. 19: “Given the importance of public safety to Clark County’s economy and to the citizens of our state’s most populated county, I plan to support the decision of voters of Clark County and sign this measure if it passes the 2013 Legislature.”
At 12:24 p.m. Dec. 19, Sandoval — who had been copied on the back-and-forth emails — chimed in for the first and only time: “I am good w(ith) this. We need to move on.”
On all policy questions, Sandoval’s staff and political advisers maintain, the governor is the final decision-maker, even when the group spars over the issue.
“It comes down to the fact the governor is the decision-maker in this office,” Gardner said. “Anyone who thinks otherwise is wrong.”
Sandoval echoed that point in a statement for this story.
“I talk with a number of individuals on any given day,” Sandoval said. “Often these individuals have varying views and perspectives. Regardless of the discussion, the final decision rests with me.”
Foletta declined to comment for this story, as did Slanker.
It’s not unusual for governors to regularly consult political advisers for help devising strategy, crafting public statements or setting governing priorities. But for advisers to also be among the most powerful lobbyists in the state?
Ernaut and Gardner both shrug it off.
“Of course the governor knows who I do and don’t support,” Ernaut said. “I have been a proud advocate of More Cops and Metro for almost all of my career. In this particular instance, this issue happens to be in the best interest of Las Vegas, our economy, Metro and the governor. So this wasn’t exactly a hard piece of advice to give.”
Chief-of-staff Gardner said: “It’s absolutely a conversation with a trusted adviser and, in this particular case, had nothing to do with any position anybody was trying to lobby on behalf of a client. I don’t think any of us knew Pete represented anything to do with this issue.”