As troubles mount, Gibbons disengages

By J. Patrick Coolican, David McGrath Schwartz

Sunday, June 15, 2008 | 2 a.m.

Gov. Jim Gibbons called an emergency budget meeting with elected officials last week, but he and his staff failed to notify key legislators, who learned of it from media reports.

The breach of protocol would have been surprising in other administrations, but not in this one.

A few hours after the meeting, the governor’s staff held a conference call to brief and consult with his Cabinet about the potential cuts. The governor wasn’t on the call. But again, the behavior wasn’t unusual for Gibbons.

Interviews over the past two weeks of nearly two dozen legislators, lobbyists and current and former government officials — most of them, like the governor, Republicans — revealed a nearly unanimous conclusion: the Gibbons administration is in disrepair.

The officials and insiders say the administration lacks leadership and coordination. The governor is distracted by his recent divorce filing, politically under siege and isolated, they said.

Many of the people interviewed for this story would speak only if not identified because they must continue to work with and for the governor.

Only a few — all members of Gibbons’ innermost circle — disagreed with the consensus.

Gibbons, who declined to comment for this story, is in the office less frequently these days. In the early months of his administration, which began Jan. 1, 2007, he was in the office by 7:30 each weekday morning and stayed late. Now he arrives at the office in mid-morning, if at all.

Citing state law, the governor’s office refused to release Gibbons’ schedule. But his schedule of public appearances has not been robust. From Jan. 1 to March 15 of this year, the governor made 38 public appearances, including for such things as Board of Examiners meetings, Republican functions and the National Governors Association convention in Washington, D.C.

His spokesman, Ben Kieckefer, said the governor was always available and informed about state issues. He acknowledged the governor is frequently out of the office.

“The governor is always available whenever I call him,” he said. “There are a lot of meetings outside his office.

“How he balances his schedule is entirely up to him,” Kieckefer said. “The governor gives his direction through a hierarchy. There’s a set power structure in government. He’s not heavy handed, he delegates authority.”

As to the claim that the governor has become less involved with his job, Kieckhefer said: “Whenever I talk to the governor, he knows about something before I do, he knows more about something than I do. He’s in tune with what’s happening with the state. When I talk to him, he’s engaged. He cares deeply about the state of Nevada.”

To be sure, dysfunction has largely existed throughout his 18 months in office, the officials and insiders interviewed by the Sun said. But it has grown worse in recent months as Gibbons has dealt with the ugly public divorce from his wife, Dawn, and her allegation that he was involved with the wife of a Reno podiatrist.

“The governor has always been a private person,” a senior administration official said. “In the past few months, he has become more private.”

Leading the list of problem areas is the relationship Gibbons and his chief aides have with the men and women who run the departments and agencies of state government. Those directors rarely hear from the governor, three of them told the Sun. When they do hear from him, they are not given clear or consistent direction from the governor’s office staff, a staff described as divided, warring and lacking clear lines of authority.

Instead, decision making is often the province of political operatives and Gibbons associates who have little understanding of policy issues, the insiders and officials told the Sun.

Asked by the Sun whether he is aware of any of those problems, a former Gibbons administration official said: “All of the above.”

Now Gibbons is walking into a special legislative session, which he announced Friday, with a real shot at defeat.

The state budget needs to be cut. Gibbons is calling legislators to Carson City hoping to delay the cost-of-living increase for state employees. Of that, teacher pay accounts for the largest portion — $90 million of $130 million in raises.

During the conference call Thursday, the one in which Gibbons chose not to participate, his staff consulted with department heads about whether the governor should delay cost-of-living raises or institute 2 percent budget cuts, which could mean layoffs. The department heads were divided.

The next day, without consulting his staff, Gibbons called for the special session. His staff found the decision troubling because the governor had not reached out to top legislators to discuss the issues in advance — as his predecessors had. By not reaching out, the administration is heading into the special session more or less blind.

As one staff member said, “We’re going into this without the votes.”

What’s more, Democrats are against idea of altering teacher pay and it is not clear that school districts can legally rescind the pay hikes because they are agreed to in contracts.

Before calling the special session, however, the governor did take advice from his political advisers, Sig Rogich and Jim Denton. They told him that calling the special session would allow him to “change the subject” from the divorce, according to two sources familiar with the conversations.

That logic reveals the depth of the governor’s political problems. Cutting teacher pay is politically incendiary. Yet his political advisers think it is better than continuing to deal publicly with the fallout from his divorce, including text messaging with a married woman, revealed last week and covered extensively, often with ridicule, by national media.

Aside from the budget mess, state government hasn’t reacted with any alacrity to the mortgage crisis or the sputtering economy. One leading reason, according to the people interviewed by the Sun: A near total lack of communication from the governor to important figures in government and in the Legislature.

Keith Rheault, Nevada’s superintendent of public instruction since 2004 and one of the few sources interviewed by the Sun who agreed to be identified in print, said he had weekly contact with the governor’s office during the administration of Kenny Guinn, the two-term Republican Gibbons succeeded. With Gibbons’ office, “It’s on an as-needed basis,” said Rheault, who is not a Gibbons appointee and reports to the elected state Board of Education, not the governor.

“Usually it’s when they need information from us.”

The last conversation with Gibbons was about a month ago, when the heads of all the state agencies met to discuss the latest round of budget cuts, Rheault said.

Does the governor respond quickly when Rheault does initiate contact?

“I don’t really call there that much,” Rheault said.

Aside from Rheault, other key figures, such as University Chancellor Jim Rogers and Assembly Speaker Barbara Buckley, a Democrat, say they can’t get their calls returned. They learn about many important developments through the media.

Buckley, who is in frequent contact with agency and department heads, said, “Throughout the last several months I’m understanding the administration has been rudderless.”

Sen. Steven Horsford, D-Las Vegas, was elected minority leader recently and has an outside chance of becoming majority leader if the Democrats can pick up one seat in the November elections. Horsford declined to comment, but a source close to him said the governor sent a letter after he was elected majority leader but has never called him to reach out.

Gibbons doesn’t even consult regularly with state Senate Majority Leader Bill Raggio, a lion in Republican politics and state government.

Also, the governor is said to have icy relations with federal government officials, including those in the Bureau of Land Management and the Forest Service. A major reason is the governor’s political history with those departments.

Gibbons was reared on conservative ideology and in the Sagebrush Rebellion against federal control of lands. As a five-term member of the U.S. House before becoming governor, Gibbons railed on the House floor against the federal agencies.

His years in Washington made clear that he considers the federal government the enemy, even when controlled by a Republican administration. Now that he is governor, however, his job requires federal cooperation in a state where 87 percent of the land is under federal control. His outlook and inability to craft relationships with federal officials has made dealing with some issues, such as forest fires, more difficult, a former administration official said.

Two other state agency heads also said they never hear from the governor.

“This is an absentee governor,” said a business lobbyist who served in state government.

State Sen. Bob Beers defended the governor’s performance and management competency: “I believe we have a professional and experienced core of managers and I hope they’re not distracted by this. Dealers know how to count to 21 without (casino owners) standing over their shoulder.”

The governor has frequent Cabinet meetings, but they are mostly formalities and are not substantive, a former aide to Gibbons told the Sun. This matters because agency heads are tasked with setting regulatory policy and need guidance. A governor is required to make dozens of important decisions every week. Without a clear direction, policy and regulatory matters are inconsistent and unpredictable, which is upsetting to the business community.

For example, Joe Waltuch, the head of the mortgage lending division, whose appointment by Gibbons drew criticism because Waltuch came from a subprime lender now under federal investigation, has proposed regulations that would require mortgage brokers to live within 60 miles of their offices.

The regulation might be sensible, but it would appears inconsistent with Gibbons’ stated laissez-faire approach to the free market and irritates brokers who want to work in Pahrump and live in Las Vegas, or vice versa.

Gibbons is detached from the day-to-day of governing lately. A former administration official said Gibbons and senior staff, some of whom worked for him during his five terms in Congress, run the office as if Gibbons were still in the House.

But there is a difference in those two roles. The job of a congressman is simple compared to that of a chief executive. A typical member of Congress does not preside over a large bureaucracy, does not need to set policy or try to deal from the executive branch with legislative leaders.

Gibbons had about 20 on his staff as a Congressman. In Carson City, however, the holdovers from that staff now “have 17,000 employees, but have tried to approach it the same way,” a former aide said.

Sen. Warren Hardy, R-Henderson, noted Gibbons’ experience as a fighter pilot, which may account for his go-it-alone approach.

When Gibbons announced across-the-board budget cuts last year, there was very little consultation with department heads or legislative leaders. The governor made a decision. The office sent out a memo and a news release.

“There is no process,” said a lobbyist who has served in state government.

A crucial problem in the governor’s office is managerial chaos. No one person is in charge. The chief operating officer, Dianne Cornwall, and chief of staff, Mike Dayton, are in constant conflict.

They and Josh Hicks, the governor’s counsel and deputy chief of staff, have divided up authority over departments. Hicks, a young lawyer from a powerful northern Nevada family, is widely respected and thought to be the most competent of the three.

Some of the officials and insiders interviewed by the Sun questioned the advice the governor is getting or whether he’s listening that advice at all.

Gibbons keeps an informal kitchen Cabinet of advisers. They include Rogich, Monte Miller, Patty Wade and his longtime political consultants Jim and Dani Denton, often brought in when trouble is in the air.

Walt Rulffes, superintendant of the Clark County School District, said Miller is Gibbons’ representative to an education advisory board and often accompanies the governor to meetings.

To many, this kind of involvement by the kitchen Cabinet is a problem because they have no discernible policy expertise —­ Miller is a wealthy Republican activist and businessman whose biography on his company’s Web site doesn’t mention any experience in education.

These advisers remain loyal to Gibbons.

Miller said, “The governor is engaged. He’s doing his job as the governor, all day long and into the night.”

Wade said Gibbons is doing as well as can be expected: “He’s got his head down, moving forward, the best way that he can.”

Some of those close to Gibbons believe his closest adviser is Howard Weiss, the owner of Reno-Sparks RV and Auto Service. One source close to the governor said Weiss is Gibbons’ leading adviser.

Weiss is largely unknown, even among the governor’s other senior advisers.

In a telephone interview recently, Weiss told the Sun he has lunch with the governor weekly.

Asked to explain the governor’s troubled 18 months in office, Weiss said:

“You have a governor from the north. Certain factions do not like it that way.”

Then he went on.

“I could easily say no comment. I’d rather say, a lot of the things that came out, came out on purpose.

“People didn’t want him to be, or remain, as governor. From the primary to the campaign to becoming governor. When did all of it start? I don’t know if it’s Democratic or Republican. I don’t know that world.

“Look at dates and times and places. You’ll see the puzzle pieces come together.

“Go back to the time in the primary, then to the campaign, the way things transpired. It was like everybody came after him, if you recall. The accusations — it didn’t stop. Right after he was elected and so on.

“Now we go through a period when it calms down, it’s going away. All of a suddencomes this bombshell,” Weiss said, referring to the filing by Dawn Gibbons accusing the governor of being infatuated with another woman.

“That’s the way the puzzle comes together.”

Sun reporters Emily Richmond and Cy Ryan contributed to this story.