Lt. Gov. challenges AG’s ability to prosecute him

Associated Press

Monday, March 2, 2009 | 8:21 p.m.

Nevada's lieutenant governor moved Monday to disqualify the state attorney general from prosecuting him on felony charges alleging he mishandled a multibillion-dollar state college savings program when he was state treasurer.

A lawyer for Lt. Gov. Brian Krolicki, in a motion filed in Clark County District Court in Las Vegas, said Attorney General Catherine Cortez Masto should be disqualified "based on conflicts of interests, appearance of impropriety and a violation of due process."

Attorney Richard Wright said several current and former deputy attorneys general provided Krolicki with legal advice regarding the college savings program, and Krolicki relied on that advice in overseeing the program.

"If the attorney general's office were permitted to wear the hats of prosecutor, percipient witness and legal adviser, Mr. Krolicki's due process rights and the public trust in a fair justice system would be seriously impaired," Wright wrote.

A similar motion was filed on behalf of Krolicki's chief of staff, Kathryn Besser, who also served as his chief of staff in the treasurer's office. Krolicki served two terms in that office before being elected lieutenant governor in 2006.

Attorney Linda Stiglich, representing Besser, said the attorney general's decision to prosecute the case after providing counsel is "astounding and improper." Both Krolicki and Besser have pleaded innocent to the charges.

A spokeswoman for Cortez Masto didn't immediately return a call seeking comment on the motions, filed with the court clerk late in the day on Monday.

Wright said in his motion that the attorney general has been "eloquent" in stating the duty of prosecutors to avoid conflicts of interest, and that statement "commands the disqualification of the attorney general's office and dismissal of the indictment in this case."

Wright noted that deputy attorneys general who worked with Krolicki included Conrad Hafen, the prosecutor who presented the case to a grand jury, adding, "As a matter of due process, Mr. Krolicki was entitled to a conflict-free grand jury investigation."

Krolicki, indicted in December along with Besser, is charged with two counts of misappropriation and falsification of accounts by a public officer, and two counts of misappropriation by a treasurer.

Besser is charged being a principal to misappropriation and falsification of accounts and being a principal to misappropriation by a treasurer.

The charges arose from a 2007 audit of a more than $3 billion, state-run college savings program. Auditors found Krolicki skirted budget controls and spent more on an advertising campaign than allotted by the Legislature. No money is missing and he is not accused of embezzlement.

Krolicki, a Republican who has discussed a run against U.S. Sen. Harry Reid, D-Nev., next year, has said the charges are politically motivated, an accusation Reid and the Democratic attorney general have adamantly denied.

From 2001 to 2006, Krolicki's office ran the Nevada College Savings Program, a public-private initiative that helped parents and students save money for school. The indictment alleges Krolicki improperly accounted for money earned by the state through contracts with Upromise Inc., the company that created the college saving accounts. The company is not accused of wrongdoing.

Prosecutors say Krolicki transferred some of the earnings to unauthorized accounts, a move that kept legislators from properly overseeing the program.

They also allege that more than $6 million in state funds was used to pay for program expenses, including advertising, management and legal services. The Legislature allocated just $1.6 million for those expenditures, according to the 2007 audit.

Krolicki appeared in ads for the savings program, leading some critics to accuse him of running state-funded campaign commercials.