Las Vegas Sun

July 17, 2018

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Gibbons portrayed as absentee governor while state in crisis

Nevada Health Care Lawsuit

Gov.  Jim Gibbons speaks to the media about Nevada joining 19 other states in a federal lawsuit that seeks to overturn the recently passed health care reform bill Friday, May 14, 2010. Launch slideshow »

By the summer of 2008, Gov. Jim Gibbons’ whereabouts were often unknown — even to his senior staff.

Only he and his longtime scheduler had access to the governor’s calendar. As a result, senior staff were often forced to “wing it,” as one said.

Some weekend days in spring and summer, he was not to be disturbed — he was mowing the significant lawn at his Reno home.

When Gibbons was absent or unavailable and something needed to get out, staff would use what is known as an “autopen,” a device that replicates a signature, to sign official documents and letters.

Some staff would joke, “The autopen was the busiest employee in the state,” a former administration official said.

For them, the autopen became a symbol of Gibbons’ tenure. As Nevada endured the worst crisis in its history, he was for months — perhaps years — disengaged from the day-to-day duties of governing, uninterested in public policy and often absent. That is the portrait that emerged in interviews with more than a dozen current and former aides, legislators and lobbyists. Many former staff members would not comment, even when granted anonymity.

Now, fighting for his political life in next month’s Republican primary, Gibbons has recently become more engaged, including during the February special session of the Legislature to close a more than $800 million budget hole.

Yet in that fateful summer of 2008, Nevada needed leadership as the state’s fortunes were rapidly sinking: unemployment rising by half a percentage point per month, neighborhoods being emptied by foreclosures, Strip projects stalling, state government facing a fiscal crisis.

The governor’s staff began to prepare its 2009 budget, knowing programs would have to be dramatically cut in response to plunging tax revenue.

In a series of meetings, Gibbons’ core staff gathered to determine how they would balance the budget. Gibbons never attended nor did he provide policy direction beyond “no tax increases, no fee increases,” according to a former official, whose account was confirmed by others.

In his stead, one of Gibbons’ biggest campaign contributors, Monte Miller, and Jim Denton, an outside political adviser, joined by conference call. They would make decisions on weighty matters such as whether to include a room tax increase, what services to cut and the level of pay reduction state employees should take.

At one meeting, late in the process, Health and Human Services Director Mike Willden laid out a grisly set of cuts, including forcing people off kidney dialysis.

“I said then that I wasn’t going to be killing people,” a former staffer said.

After doing what they could to preserve funding for schools and the indigent, they resolved to cut the rest from higher education. That cut, totaling 37 percent, was roundly criticized by Republicans and Democrats and received no serious consideration. Still, for the former official, it was better than the alternative.

Gibbons, in a Sun interview last week, disputed the account of his absences.

“I did engage in the meetings. We were constantly discussing how the budget should be developed,” he said.

“I met with directors individually and collectively almost every week. Maybe I wasn’t in every one of these meetings. Maybe I wasn’t asked to be in every meeting,” he said.

He did allow, however, that he believes in delegating.

“That’s why you have staff, to do a lot of the leg work so that when the decisions about whether the choice is this, or this, or this, those are the times when leadership comes into play,” he said.

Indeed, even former staff critical of Gibbons acknowledged he ultimately decided the size of the cut in state worker pay.

One problem with his approach, however, is that Gibbons has had significant staff turnover. In office more than three years, he is on his third press secretary, third counsel and third chief of staff.

Miller has since defected to the camp of Gibbons’ Republican opponent, Brian Sandoval. Denton is no longer in Gibbons’ employ.

For Jim Rogers, the wealthy businessman and former university system chancellor who gave money to Gibbons’ 2006 campaign, the verdict on Gibbons is clear. And although his words are harsher than most, his critique is representative of the state’s business and political elite: “I’ve never seen anybody in that kind of position who has been that incompetent.”

Click to enlarge photo

Jim Rogers

Those who defend Gibbons usually say he was just unlucky.

State Sen. Mark Amodei, a Carson City Republican whom Gibbons recently appointed to the Colorado River Commission, said the governor had “absolutely abysmal timing. It’s a global economic event.”

True enough. When Gibbons was elected, unemployment was 4 percent. It’s now 13.6 percent. The average price of an existing home in Las Vegas was $287,500. Now, it’s $120,000. More than 70 percent of Nevada mortgages are underwater, meaning homes are worth less than what is owed.

No state was hit harder, while being so woefully unprepared.

In other words, Nevada needed leadership.

A prominent business lobbyist who has counseled Nevada governors since the 1970s acknowledged the difficult circumstances, but said Gibbons’ sin was a lack of response.

“I’m not blaming him for the national recession. But Nevada’s unemployment seems to be dramatically higher than anywhere else, other than maybe Detroit. Any of the prior governors would have been more visible in dealing with the issue,” he said.

A former aide to Gov. Kenny Guinn, the Republican who preceded Gibbons, said Gibbons should have confronted the problems, especially the foreclosure crisis, head on: “I don’t know that there was much any governor could do, but you’ve got to be in there getting the updates, trying to understand what’s happening and stop the bleeding.”

Gibbons took a rather nonchalant approach to the foreclosure problem from the get-go.

By February 2007, just after he took office, Nevada had earned its dubious distinction as the nation’s leader in foreclosures.

In September 2007, with the housing market on the verge of collapse, Gibbons stood before the Nevada Development Authority and extolled the wonders of the Nevada economy before announcing a “summit” to explore solutions to the foreclosure problem.

After the summit, in October, he refused to call the situation a crisis and said bankers had agreed to try to renegotiate adjustable-rate loans. “I’m convinced the way out is addressing each individual problem one at a time,” he said, adding it could take “some months” for the problem to fix itself.

That was, for the most part, his policy prescription. It hewed to his ideology: the free market, now and forever.

Gibbons turned out to be spectacularly wrong — it was a systemic crisis that would require massive government intervention, and would take years, not months, to unwind.

In the Sun interview, Gibbons blamed the crisis on government rather than the avarice and imprudence of players in the financial services industry. He depicted lenders as victims: Banks were forced to give loans to borrowers who couldn’t repay, he said.

But as countless government investigators and journalists have shown, no one forced Countrywide or Washington Mutual or other failed subprime lenders to make bad “stated income” loans — they did so with gusto because it drove profits and therefore executive bonuses.

A few months after the summit, another crisis developed when health inspectors discovered unsafe practices at the Endoscopy Center of Southern Nevada had put 40,000 Nevadans at risk for hepatitis C.

State policy says the center’s offices should have been inspected every three years. Instead, the center went seven years without review by the state’s small staff.

Again Gibbons’ ideological dogmatism was challenged.

He downplayed the problem and questioned whether the state needed to conduct more frequent inspections. “It’s premature for a change like that,” he said.

Gibbons compared inspecting Nevada’s 50 surgical centers to hiring enough state troopers to catch every speeder.

“We could inspect (surgical centers) annually and then pretty soon, have we done overkill?” he said.

As the hepatitis C crisis unfolded, word leaked of Gibbons’ pending divorce from his wife of 20-plus years, Dawn. There were other embarrassing personal revelations — his using a state cell phone to text a female friend more than 800 times during the 2007 legislative session.

The economy continued to worsen. And Gibbons withdrew from the job, his former staff says.

His lowest point may have come during the 2009 legislative session. He was unseen, isolated and without influence. He vetoed dozens of bills, but most were overridden with the support of Republican senators, including the tax-and-spend package that temporarily made state government solvent.

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Gov. Jim Gibbons holds up AB552 and SB433 after he vetoed the bills on the Capitol steps in Carson City at the Nevada Legislature on Thursday, May 28, 2009.

Republicans frequently and publicly criticized him — an unheard of break with tradition.

He began to recover from this slumber last summer, Gibbons observers say. And in recent months, the Gibbons administration has been more aggressive, and the governor at times more engaged.

Observers attribute his newfound energy to his divorce settlement, the new staff he brought in last summer and the re-election campaign.

Current Chief of Staff Robin Reedy said Gibbons has been interested in policy. She said he sets goals and asks staff to come back with suggestions.

For example, Gibbons asked staff to look at education reforms, she said. They returned with a list of conservative ideas, including eliminating collective bargaining and the Education Department.

She said during the special session in February that Gibbons grabbed Deputy Chief of Staff Lynn Hettrick and walked over to the Legislature and demanded a deal to close a more than $800 million budget hole.

His staff proudly marveled that Gibbons sat through 90-minute meetings with lawmakers, calling it unprecedented.

It didn’t seem to register that the real revelation was that the governor hadn’t previously been in a 90-minute meeting.

Democrats and Republicans who have endorsed his opponents praised his engagement during the special session.

Yet Reedy disputed the notion that the governor’s involvement reflected a change.

Leading up to the 2009 session, she said, it was clear Democrats who controlled the Legislature were going to raise taxes and use their majority to attack the governor.

“The governor wasn’t going to give them any ammunition,” Reedy said. “He did a cost-benefit analysis. There was no point in going over there.”

Gibbons’ tenure and governing philosophy can probably be summed up in a statement he made recently to fellow conservatives in Elko, near where Gibbons owns some beatific land he’ll retire to, perhaps soon.

“You become sort of the anti-governor because you have to reduce budgets.”

Sun reporter Michael J. Mishak contributed to this story.

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