U.S. Senator Reid, son combine for China firm's desert plant

BY MARCUS STERN

WASHINGTON Fri Aug 31,2012

1 OF 2. U.S. Senate Majority Leader Harry Reid (D-NV) pauses during his news conference on the payroll tax cut extension on Capitol Hill in Washington in this December 23, 2011 file photo.

CREDIT: REUTERS/YURI GRIPAS/FILES

Reuters) - U.S. Senator Harry Reid recognized nine years ago that connections between his official duties and the lobbying activities of his relatives could lead to ethical questions.

In 2003, the Nevada Democrat publicly banned relatives from lobbying him or his staff after newspaper reports showed that Nevada industries and institutions routinely turned to Reid's sons or son-in-law for representation.

Now, questions surrounding family ties are flaring again in Nevada around the Senate majority leader. He and his oldest son, Rory, are both involved in an effort by a Chinese energy giant, ENN Energy Group, to build a $5 billion solar farm and panel manufacturing plant in the southern Nevada desert.

Reid has been one of the project's most prominent advocates, helping recruit the company during a 2011 trip to China and applying his political muscle on behalf of the project in Nevada. His son, a lawyer with a prominent Las Vegas firm that is representing ENN, helped it locate a 9,000-acre (3,600-hectare) desert site that it is buying well below appraised value from Clark County, where Rory Reid formerly chaired the county commission.

Craig Holman, a lobbyist for the non-partisan advocacy group Public Citizen, said the senator is dealing with "an iffy ethical landscape" because of the family connections and should recuse himself from the project. "Is this just happening because ... it benefits the Reid family, or did Harry Reid actually believe in this?" Holman said.

The senator has supported numerous clean energy projects in Nevada. Rory Reid cites energy as one of his specialty areas at the law firm.

The two Reids deny discussing the ENN project.

"I have never discussed the project with my father or his staff," said Rory Reid. Kristen Orthman, a spokeswoman for the senator, said he had not discussed the project with his son.

The Langfang, China-based ENN Energy Group hopes to build what would be the largest solar energy complex in America. The site chosen with Rory Reid's guidance is in tiny Laughlin, Nevada, a gambling town of 7,300 along the Colorado River, 90 miles south of Las Vegas.

County officials have said that they were so thrilled to recruit a company to the area, with the prospect of thousands of new local jobs, that they were eager to negotiate.

ENN is headed by Chinese energy tycoon Wang Yusuo, who made a fortune estimated by Forbes at $2.2 billion distributing natural gas in China. Wang escorted Reid and a delegation of nine other U.S. senators on a tour of the company's clean energy operations in Langfang, and Reid featured Wang as a speaker at his 4th annual National Clean Energy Summit in Las Vegas last year.

NEVADA'S LARGEST LAW FIRM

To advance the Nevada project, ENN retained the state's largest and most prestigious law firm - Lionel Sawyer & Collins, where Rory Reid works. It is headed by Richard Bryan, a former Nevada attorney general, governor and member of the U.S. Senate.

Rory Reid faced a one-year cooling off period from lobbying the Clark County commission after leaving his post in January 2011, and Bryan took the lead on ENN's negotiations with the county.

Since the one-year ban expired, Rory Reid has been ENN's primary representative before the county, according to Steve Sisolak, the board's vice chairman.

Rory Reid acknowledged representing ENN at both the county and state levels since January. He declined to discuss the project otherwise.

Two months after Harry Reid's China trip, Lionel Sawyer registered ENN Mohave Energy LLC as an American subsidiary of the Chinese company. The firm negotiated with the county to buy the land rather than lease it, as the county's staff had recommended.

In December, Clark County commissioners voted unanimously to sell up to 9,000 acres of public land to the subsidiary at pennies on the dollar.

The deal spurred local controversy. Separate appraisals valued the land at $29.6 million and $38.6 million. The commission agreed to sell it to ENN for $4.5 million.

The county did build in certain conditions before the project could begin, including milestones for jobs creation and investment. ENN also must assure the county that it has a power company willing to commit to buying energy from the solar farm. But in the eight months since the commissioners approved the deal, no utility has signed a power purchase agreement.

However, Harry Reid stepped up again.

The Democrat recently used an online discussion related to his annual energy summit for an as-yet unsuccessful effort to pressure Nevada's largest power company, NV Energy, to sign up as ENN's first customer.

In the July 30 discussion, Reid said the project "would start tomorrow if NV Energy would purchase the power." The utility controls "95 percent of all of the electricity that is produced in Nevada and they should go along with this." Reid's online comments were first reported by the Las Vegas Review Journal.

The power company responded by saying it had exceeded its minimum renewable energy requirements both last year and this year, though it would consider buying power from ENN in the future. A spokesman for NV Energy declined to discuss the matter further.

Bryan, the head of the law firm, did not return repeated phone calls and emails.

An official with ENN in Langfang did not respond to emails.

In 2007, after a controversy over the number of lawmaker relatives engaged in lobbying, Congress passed the Honest Leadership and Open Government Act, sharply restricting the lobbying activities of close relatives of members of Congress.

The law only applies to registered lobbyists and Rory Reid is not registered as a federal lobbyist in Washington or a state lobbyist in Nevada, according to records in both jurisdictions.