Senator got land at big discount

BULLHEAD CITY, Ariz. – It’s hard to buy undeveloped land in booming northern Arizona for $166 an acre. But Senate Majority Leader Harry Reid effectively did just that when a longtime friend decided to sell property owned by the employee pension fund that he controlled.

In 2002, the Nevada Democrat paid $10,000 to a pension fund controlled by Clair Haycock, a Las Vegas lubricant dealer and his friend for 50 years. The payment gave the senator full control of a 160-acre parcel in Bullhead City that Reid and the pension fund had jointly owned. Reid’s price for the equivalent of 60 acres of undeveloped desert was less than one-tenth of the value the assessor placed on it at the time.

Six months after the deal closed, Reid introduced legislation to address the plight of lubricant dealers who had their supplies disrupted by the decisions of big oil companies. It was an issue the Haycock family brought to Reid’s attention in 1994, according to a source familiar with the events.

If Reid were to sell the property for any of the various estimates of its value, his gain on the $10,000 investment could range from $50,000 to $290,000.

It is a potential violation of congressional ethics standards for a member to accept anything of value – including a real estate discount – from a person with interests before Congress.

In a statement, Reid’s spokesman Jon Summers said that the transaction was not a gift and that the price was due to the property’s history and the fact that only a partial interest was sold. Reid’s action on the lubricant issue was unrelated to the sale and reflected the senator’s interest in fairness for small businesses, Summers said.

Reid “has never taken any official action to provide personal financial benefit to me, and I would never have asked him to,” Clair Haycock told the Los Angeles Times. Haycock’s son, John, who runs the company with him, said in a recent e-mail that it was “absolutely wrong” to connect the land sale and Reid’s lubricant legislation, which did not pass.

But records and interviews show that beginning in the mid-1990s, Reid tried several times to push legislation that would have protected lubricant distributors from abrupt cancellations by their suppliers. Though unsuccessful, the legislation sent a clear message of congressional interest to the oil firms, according to Sarah Dodge, former legislative director for an industry group that worked on the bill.

Because an employee pension fund owned the land Reid purchased, labor law experts contacted by the Times said a below-market sale raised additional questions. Pension fund trustees have a duty in most cases to sell assets for their market value, the experts said.

“I think this would have been considered a potentially serious issue” at the time, said Ian D. Lanoff, who led the Labor Department’s pension division during the Carter administration and was provided basic details of the case – though not the identity of the lawmaker – by the Times.

John Haycock said his workers received all promised benefits from the Haycock Distributing Co. pension plan and were unaffected by the land transaction. Federal records confirm this.

How good a deal did Reid get? Paying $166 an acre for Mohave County land is “a super deal,” said the county assessor, Ron Nicholson. But the precise answer in this case, Nicholson said, is complicated by the fact that only a minority portion of a partnership was for sale and minority shares can be difficult to sell. Other experts who reviewed the transaction for the Times said that, despite its complexity, the senator appeared to have acquired valuable property for a fraction of its value.

Reid’s spokesman said the senator had paid a fair price.

“When a willing buyer pays a willing seller to buy an asset, that is a sale, not a gift,” Summers said.