Harry Reid Lobbies For Casino Investment
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Alex Knapp | Monday, March 23, 2009 |
The Las Vegas Review-Journal reports that Senate Majority Leader Harry Reid has been calling up banks and lending institutions to help prop up the MGM Mirage.
Still, Kerkorian is not sitting around waiting for MGM Mirage’s next step.One gaming analyst said Kerkorian and Senate Majority Leader Harry Reid, a close friend, have been calling financial institutions to try and raise the remaining $1.2 billion needed to complete the $9.1 billion CityCenter development.
If that’s true, that seems like a pretty serious ethical tangle that Reid is getting himself into. Given that the Senate is almost certainly going to be passing a lot of banking legislation in the near future, Reid is risking a couple of things here. (1) He risks having a bank that can’t really afford it give MGM a loan out of fear of being targeted in new legislation. (2) He risks making it look like there’s a quid pro quo should any of the banks that make a loan do especially well as a consequence of future legislation.
Bottom line, a Senator doesn’t have any place trying to hit up banks for loans to a business he doesn’t have an interest in.
About the Author: Alex has a B.S. in Biochemistry from Worcester Polytechnic Institute and a J.D. from the University of Kansas School of Law. He has been published in the Kansas City Star, TCS Daily, and Comic Book Resources. He joined the staff of OTB in June 2006. Additionally, he’s been writing at Heretical Ideas since October, 2001, and also reviews cigars at Cigar Jack's Cigar News and Reviews.
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Bottom line, a Senator doesn’t have any place trying to hit up banks for loans to a business he doesn’t have an interest in.
Would it be better if he did have an interest in the business?
(I'm not playing gotcha, I know that 'x without y is bad' does not imply that the speaker meant 'x with y is good'. I'm jut wondering, what are the conditions which separate good behavior from bad in this kind of situation.)
It's not merely that they'll be passing a lot of banking legislation but that they're subsidizing banks directly. That certainly creates the impression of a quid pro quo.
It may in fact be a quid pro quo which isn't being perceived that way by the senator. A difficult situation.
However, Alex, I'd like to toss a question back at you. What is a senator's role in intervening on behalf of a constituent?
Dave's right, Alex, Reid is a Senator from the state of Nevada, where casinos are a big part of the state economy. If he can't help companies in his state when they need help, he's not doing much for his state.
Dave and Michael,
It's one thing for a member of Congress to help out a constituent by, say, using their influence to cut through some red tape or get them in touch with the right people.
It's quite another for the Senate Majority Leader, who controls the legislative agenda of the Senate, to give, say, Bank of America a call and say, "loan a billion to this casino."
Somehow, I think the the constituent service that Kerkorian is asking for from his Senator is different in kind and degree from what most of us might receive from our respective Senators as constituent service. Getting some help navigating the federal bureaucracy isn't what is going on here.
