Sister dead and tarnished, brother pushes for truth

By Jeff German, Steve Kanigher

Monday, Feb. 4, 2008 | 2 a.m.

Phil Alfano knows he can’t bring back his older sister, the late Nevada Controller Kathy Augustine.

But what he can do is search for the truth about the lengths her political enemies went to tarnish her public career before her July 11, 2006, death. In June, a jury convicted Augustine’s husband, Chaz Higgs, of killing her.

“It bothers me to think that the last few months of her life she was having to deal with this nonsense,” Alfano said.

A 43-year-old high school principal in Modesto, Calif., Alfano began his search for the truth more than 18 months ago, when, while packing up his sister’s belongings at her Reno home, he discovered an unpaid legal bill from Las Vegas lawyer Dominic Gentile, who had defended Augustine, a Republican, during her impeachment trial in December 2004.

That bill, Alfano discovered, was to help 50-year-old Augustine fend off a federal probe into alleged improper political activity while she was controller.

The investigation, which died with Augustine, was never made public, and Alfano and Gentile told the Sun they think it was politically inspired.

“I don’t have any doubt that this was politically motivated and probably initiated by somebody in her own party who was irritated by her not bowing to the powers that be in the party,” Gentile said.

The allegations were essentially the same as those raised and resolved during state ethics proceedings against Augustine and later her impeachment.

Alfano has filed a Freedom of Information Act request with the government to learn more about the investigation. But so far, he said, he has been denied access to roughly 300 pages of documents in the file.

Augustine’s political fall began Sept. 22, 2004, when the Ethics Commission fined her $15,000 for using state employees and office equipment in her 2002 reelection campaign.

That led fellow top Republican officeholders, including Sen. John Ensign, then-Gov. Kenny Guinn and then-Secretary of State Dean Heller, to urge her to resign.

Augustine refused, and the Nevada Assembly began impeachment proceedings against the two-term controller.

At the same time, as Alfano later learned, an anonymous complaint was filed against Augustine with the U.S. Office of Special Counsel, a small Washington-based federal agency that enforces the Hatch Act, a law that restricts the political activity of government workers.

Until that complaint, the special counsel’s biggest Nevada case involved former Assembly Speaker Richard Perkins, a Henderson Democrat.

The office concluded in 2003 that Perkins, as deputy police chief in Henderson, was covered under the Hatch Act and could not run for another partisan office because his department received federal funding. Perkins, now Henderson’s police chief, was contemplating a bid for governor at the time.

Ultimately, however, a federal administrative law judge dismissed the case, and Perkins accused the Bush administration of playing politics with the investigation.

In the state case against Augustine, the Assembly eventually drew up three articles of impeachment alleging unlawful political conduct.

After a well-publicized trial, the state Senate convicted her on one of the charges and censured her rather than removing her from office.

Although she continued to carry out the duties of her office, Augustine had fallen out of favor with the Nevada political establishment and was seen as an embarrassment within her party.

In January 2006, however, as her eight-year stint neared its end, Augustine wasn’t ready to give up public service. Term limits barred her from running a third time for controller, but they didn’t prevent her from seeking another state office. She announced that she would run for state treasurer.

Her candidacy prompted then-Nevada Republican Party Chairman Paul Adams to publicly throw the party’s support behind her Republican opponent, financial consultant Mark DeStefano.

Augustine remained defiant of the party and moved forward with her campaign. Alfano said his sister also started digging into DeStefano’s background and began to publicly raise questions about his business dealings.

By April 6, 2006, however, Augustine found herself back on the defensive.

The Office of Special Counsel informed Gentile in a letter that it was formally launching an investigation of Augustine. The case was assigned to an investigator in the special counsel’s field office in Oakland, Calif.

The investigator, Robert McClain, wrote Gentile that his first order of business was to determine whether Augustine was covered under the Hatch Act.

“This will be determined based on her duties, and those of employees within the controller’s office, and whether or not those duties are performed in connection with any activity that is financed in whole or in part by federal funds,” McClain wrote.

The investigator said he would interview state employees, and he asked Gentile to respond on Augustine’s behalf to questions aimed at determining whether Augustine’s office had received any federal money.

In an April 24 written response, Gentile told McClain that Augustine’s office did not receive or handle federal money.

Before Augustine’s death, Gentile said, McClain informed him that he did not think he had jurisdiction to proceed.

But Jim Mitchell, a spokesman for the Office of Special Counsel, said the probe wasn’t officially closed until July 14, 2006, three days after Augustine died.

Alfano said he found it odd that the federal government investigated the same allegations the state pursued against his sister.

“Why would they waste resources on something that was already done in Nevada?” he said.

So he filed a Freedom of Information Act request with the Office of Special Counsel on Nov. 29, 2006, asking for a copy of the initial anonymous complaint, all records obtained in the investigation and a list of people interviewed.

More than six months later on June 18, 2007, the special counsel’s FOIA officer, Christopher Kurt, responded by giving him information that he already had, copies of the initial correspondence between McClain and Gentile.

Kurt said he was prohibited by law from providing a copy of the anonymous complaint and the 300 pages of documents the office collected during the investigation.

Among the reasons Kurt cited for not giving up the information was the possibility that it would intrude on witnesses’ privacy and compromise the identity of confidential sources.

Alfano appealed the decision within the Office of Special Counsel three weeks later and awaits an answer.

“Privacy exemptions do not apply since this investigation was based on the same alleged offenses that resulted in a very public ethics investigation and impeachment based on the same complaint,” he wrote in his appeal.

Trying to pry information out of the government has frustrated Alfano.

“It’s been an eye-opener,” he said. “If our government is secretive about this kind of stuff, which was really petty in nature, what other things do they keep from us?”

Alfano said he thinks his sister’s reputation was unjustly tarnished and hopes that eventually Nevadans will view her in a kinder way.

In the meantime, Alfano said, he’s trying to understand why the government targeted his sister.

“At a time when we’re supposed to be fighting terrorism and using the federal government to protect us, this seems like a very frivolous investigation for the federal government to be conducting,” he said.

Jeff German is the Sun’s senior investigative reporter.