Published Tuesday, May 31, 2016 | 4:48 p.m.
Updated Tuesday, May 31, 2016 | 8:30 p.m.
Bob Abbey, former head of the federal Bureau of Land Management, was “personally and substantially involved” in selling Henderson land for a multi-venue sports complex to developer Chris Milam and “stood to benefit personally” from the sale, says a new report from an internal government watchdog.
The Department of the Interior’s Office of Inspector General said in a report published Tuesday that it found “no evidence” that Milam bought the 480-acre project site from the BLM “with the intent to flip it,” as Henderson city officials alleged in a civil fraud case against the developer in 2013.
But, investigators said, Abbey had much to gain from Milam’s purchase, thanks to Abbey’s “business connection” to real estate consultant and former longtime BLM official Mike Ford.
Abbey and Ford are partners at Las Vegas-based consulting firm Abbey, Stubbs & Ford LLC. Abbey joined the firm in 2005 but resigned in 2009, when President Barack Obama appointed him to run the BLM. He rejoined the consulting group in 2012 after he retired from the BLM, which manages federal lands and is part of the Interior Department.
Ford met Milam in 2011 and represented the Texas investor during the land-purchase process. Ford’s consulting firm was set to receive a $528,000 payment if Milam finalized the transaction, Tuesday’s report said.
But U.S. officials terminated the sale after Milam agreed, as part of a legal settlement with City Hall, to never do business again in Henderson and to pay the city $4.5 million.
His proposed Las Vegas National Sports Complex — comprising an indoor arena and three stadiums south of the M Resort — never materialized. According to Tuesday’s report, he never paid the half-million-dollar fee to Ford, either.
Investigators asked Abbey if he benefited from the land sale. According to the report, Abbey said that he hadn’t and that he didn’t receive any payments from the consulting firm as a result of the sale.
“That was one of the issues that I went back and looked at,” Abbey said, according to the report. “I wanted to make sure that when I looked somebody in the eye and said, ‘I have not received a penny from Milam,’ that it was the truth.”
The inspector general’s office said it presented its findings to the U.S. Attorney’s Office, which last year declined to prosecute.
Natalie Collins, spokeswoman for the U.S. Attorney’s Office for the District of Nevada, said Tuesday that agency officials cannot confirm or deny whether someone is being investigated for possible prosecution.
In a phone interview Tuesday, Abbey said he was “shocked” to read the report, which he said was “terribly flawed,” “void of relevant facts” and “heavy on speculation and sensationalism.”
He said his consulting-firm partners landed the Milam contract while he led the BLM — before he returned to the firm — and that he “would not have shared in those proceeds.”
Abbey also said that he was investigated for more than three years, with investigators looking over his bank accounts, reviewing his personal and government email accounts, and interviewing numerous people, including him once.
And yet, he said, they found “absolutely no evidence or information” that could show he was involved in the decisions being made by BLM officials in Nevada in connection with the sale.
“I have no clue how any qualified investigator could reach this conclusion,” he said of the report.
The Henderson City Council in September 2011 approved an initial project agreement with Milam and voted to support the BLM land sale. According to Tuesday’s report, Abbey retired from the BLM on May 31, 2012, and the agency sold the land to Milam days later, on June 4, 2012, for $10.56 million.
Abbey rejoined his consulting firm in June 2012, the firm’s website says.
The inspector general’s report said Abbey’s “involvement in the land sale began early in the process,” as he “conversed or met with Ford on several occasions” before and during the initial sales efforts. According to the report:
• On March 4, 2011, Ford emailed Abbey, saying, “Glad we had time to catch up yesterday in Reno and happy we were able to visit candidly about issues of mutual interest (sic).”
• On March 22, 2011, Ford met with Abbey in Abbey’s BLM office in Washington.
• On March 23, 2011, Ford emailed Abbey at his Interior Department address, telling him to check his outside email account for a message.
• On June 23, 2011, Ford met with Abbey and “an official from a wildlife association” at Abbey’s BLM office in Washington. The report did not name the official or the association.
The BLM published a “notice of realty action” on April 4, 2012, to take public comments on its proposed sale to Milam’s Silver State Land LLC. Ford wrote “at least part” of the notice and “directly contacted” BLM employees “to guide and expedite (its) processing,” the report said.
Abbey also was involved, the report says. On March 7, 2012, an assistant to the BLM’s chief of staff emailed Abbey to tell him the notice had arrived for review. Abbey responded, “Thanks. This land sale is important in bringing jobs to an area of high unemployment. Sooner the better.”
About two weeks later, an attorney from the Interior Department’s legal division, the Office of the Solicitor, reviewed the notice and wrote that the land had “known mineral values." Under U.S. law, she wrote, when the BLM is selling land, the agency has to determine a property either has no known mineral values or that preserving any existing mineral rights could, for instance, block a development project.
The notice did not address this, so she sent it to a supervisor, an acting branch chief.
On March 23, 2012, Abbey visited the supervisor and asked what was delaying the notice’s publication.
The supervisor later told investigators that it wasn’t unusual for Abbey to visit, “but he found it strange that Abbey came to his office to discuss” a notice of realty action, “as he had never before asked about one.”
On March 27, 2012, Abbey contacted a BLM division chief and asked that she check on the notice. The next day, the report said, Abbey kept trying to learn the notice's status via email.
During his interview with investigators, Abbey “denied playing a part in the land sale, but when we showed him the series of emails he initiated” about the notice “and his subsequent visit to the branch chief, he said, ‘OK. It sort of reflected I had more interest in this than I thought, huh,’” the report said.
Abbey also said the notice “caught his attention because he did not want it to be ‘sitting in somebody’s in-basket,’” the report added.
Meanwhile, Ford, who spent 25 years with the BLM, had “an unusually high level of access to BLM personnel and processes before and during the Henderson land sale,” the inspector general’s office said,
A realty specialist with BLM’s Nevada state office who was involved in the sale process told investigators that “she gave precedence to Ford’s land applications when he did with business” with the BLM, and that “she had shared draft documents with him” in connection with the Milam sale.
Her actions “appeared to violate federal regulations that prohibit preferential treatment and the improper use of nonpublic information,” the report said.
In a statement provided by the BLM’s office in Reno, agency spokesman Jeff Krauss said the Interior Department takes the report’s findings “very seriously.”
The agency has reviewed the report and “taken the necessary administrative actions,” Krauss said without elaborating.
Henderson city leaders were enthusiastic about Milam’s plans. In April 2012, after a council meeting in which Milam declared project financing was fully approved, Mayor Andy Hafen said that “if things fall into place and we get this thing going, it will be a boon for Henderson for years and years to come.”
“I’ve said it all along: What community, what mayor wouldn’t want a project like this in their city?” Hafen said.
In the end, however, Milam’s sweeping project existed only on paper.
No teams committed to his planned facilities; his main financier reportedly was a Chinese surveillance-equipment maker; and he settled the city’s lawsuit in March 2013, about six weeks after City Hall sued him, his attorneys, his public-relations chief, and consultant Ford.
According to the lawsuit, Milam repeatedly lied to Henderson officials about the viability of his project as a way to buy cheap public land and then sell for profit to other developers.