Editorial: The deal that never should have been

In all the second-guessing and navel gazing over the Faraday Future flop, no one is bringing up the real reason that the deal should never have been made in the first place.

Yes, it was an ill-conceived idea for gullible Nevada lawmakers in a special session in 2015 on blind faith alone to agree to dole out $215 million in tax abatements and credits to entice Faraday Future to build an electric car factory at the Apex industrial complex in North Las Vegas, though at the time it did not even have a prototype vehicle. The deal, struck by the Governor’s Office of Economic Development, also promised to spend $120 million on infrastructure improvements at the site — water, rail and widening of Interstate 15.

Faraday promised to build a $1 billion manufacturing facility, create 4,500 jobs and start producing cars as early as 2016.

After visiting China in 2016 state Treasurer Dan Schwartz, long a critic of the Faraday largesse by the state, told the press, “We’re increasingly more concerned than we were before that this is just a big Ponzi scheme.”

He and the handful of other naysayers have been proven right. Faraday has pulled the plug, tucked tail and run off.
But it wasn’t just naiveté or poor negotiating skills or poor judgment that made this a bad deal. It was blatant and arrogant flouting of the state Constitution. In fact, it was a double flout.

Nevada’s Constitution has a Gift Clause, which states, “The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.”

Self-styled economic development advocates have tried three times to amend the Constitution and remove the Gift Clause. The voters rejected those attempts all three times — in 1992, 1996 and again in 2000 by wide majorities.
The state Supreme Court has said that when the state provides something to a private entity without getting adequate compensation for the value, that is a gift and thus a violation of the Constitution.

Nevada’s high court has cited an Arizona Supreme Court ruling on that state’s nearly identical Gift Clause. The Arizona court said its Gift Clause “represents the reaction of public opinion to the orgies of extravagant dissipation of public funds by counties, townships, cities, and towns in aid of the construction of railways, canals, and other like undertakings during the half century preceding 1880, and it was designed primarily to prevent the use of public funds raised by general taxation in aid of enterprises apparently devoted to quasi public purposes, but actually engaged in private business.”

Then there is the section of the Nevada Constitution that clearly states, “The Legislature shall provide by law for a uniform and equal rate of assessment and taxation …” It is not uniform or equal if a select few get breaks while others don’t.

Despite these clearly worded prohibitions the state doled out $1.3 billion in tax breaks to Tesla Motors to build a battery factory near Sparks. The projections on capital investment and number of jobs to be created have fallen far short. All it would take to make the whole deal go bust is a technological breakthrough that makes lithium ion batteries obsolete.

That $750 million to build a Las Vegas stadium for the Oakland Raiders football team on a site with woefully inadequate parking spaces still could come up a piker.

But none of them should ever have been allowed in the first place and none like them should ever be allowed again, if officials and lawmakers would abide by the Constitution.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Site of failed Faraday Future electric car factory. (R-J pix)

Newspaper column: Bundy case judge trying to prevent jury nullification

The retrial of four defendants in the 2014 Bunkerville standoff at the Bundy ranch got underway this past week in Las Vegas, and this time the prosecution and the judge seem determined to avoid another mistrial due to a hung jury by eviscerating defense arguments.

Federal Judge Gloria Navarro granted a prosecution motion to bar presentation of evidence “supporting jury nullification.”

In April, the first of three scheduled trials for the 17 Bunkerville defendants — charged with obstruction of justice, conspiracy, extortion, assault and impeding federal officers — ended in a mistrial. The jury found only two of six people on trial guilty of some charges but deadlocked on the others.

The standoff occurred after heavily armed Bureau of Land Management agents attempted to confiscate Bundy’s cattle after he had refused for 20 years to pay grazing fees. Faced with armed protesters the agents eventually released the cattle.

Two more trials are pending, with Cliven Bundy and his four sons scheduled to be the last. Most defendants have been jailed without bail for a year and half.

In mid-June the prosecution filed a motion asking the judge to bar the jurors in the retrial from hearing certain so-called state of mind arguments — arguments that the defendants felt justified to show up and protest because of “perceived government misconduct” due to excessive use of force by law enforcement and that they were simply exercising their First and Second Amendment rights.

The defense will not be allowed to mention the tasering by law enforcement of one of Bundy’s sons and the wrestling to the ground of one of his sisters.

The judge said the reasons the defendants went to Bunkerville are not relevant to the charge, but she will allow prosecutors to introduce testimony about the four men’s associations with militia groups.

“The Court also rejected Defendants’ proposed instructions on the First and Second Amendment because they are not legally cognizable defenses, or in other words, the law does not recognize these Amendments as legal defenses to the crimes charged,” Navarro wrote, though the Bill of Rights were added to the Constitution to spell out natural rights that Congress must not trammel with its laws.

The First Amendment bars Congress from making laws abridging free speech and peaceful assembly, while the Second states the right to keep and bear arms may not be infringed.

But apparently those are not defenses against laws prohibiting behavior that causes federal officers to feel threatened.

Navarro concluded, “The Court will not permit argument, evidence, or testimony regarding Defendants’ beliefs about the constitution as such beliefs are irrelevant and a possible jury nullification attempt.”

The judge quoted a 9th U.S. Circuit Court of Appeals ruling, “Jury nullification occurs when a jury acquits a defendant, even though the government proved guilt beyond a reasonable doubt.” And you thought jurors made that determination.

The concept of jury nullification dates to colonial days and is widely taught in journalism schools, because it involved printer John Peter Zinger who was indicted for criminal libel against the colonial governor and tried in 1735. His attorney Andrew Hamilton offered as a defense that what was printed was true, even though under the law truth was not a defense but rather a confirmation of guilt.

The judge at Zenger’s trial ruled that Hamilton could not present evidence as to the truth of the printed statements.

In his closing argument Hamilton declared, “It is the cause of liberty … and by an impartial and uncorrupt verdict have laid a noble foundation for securing to ourselves, our posterity, and our neighbors, that to which nature and the laws of our country have given us a right to liberty of both exposing and opposing arbitrary power (in these parts of the world at least) by speaking and writing truth.”

The jury quickly returned with a verdict of not guilty.

In 1794, Chief Justice John Jay said to jurors in a rare Supreme Court jury trial, “It may not be amiss, here, Gentlemen, to remind you of the good old rule, that on questions of fact, it is the province of the jury, on questions of law, it is the province of the court to decide. But it must be observed that by the same law, which recognizes this reasonable distribution of jurisdiction, you have nevertheless a right to take upon yourselves to judge of both, and to determine the law as well as the fact in controversy.”

Did jurors in the first trial nullify the law or merely find the law was misapplied?

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Protests outside courthouse. (R-J pix)

Editorial: Heller sponsoring bills to address doctor shortage

Nevada Sen. Dean Heller has joined with several other U.S. senators to introduce bills to address the looming shortage of doctors in the coming decade, particularly in rural areas.

According to a study released in March by the Association of American Medical Colleges (AAMC), the United States is facing a shortage of between 40,800 and 104,900 physicians by 2030, because the number of new physicians is not keeping pace with the demands of a growing and aging population. Though the population is expected to grow by 12 percent by 2030, the number of Americans aged 65 and older is expected to increase by 55 percent and the number of people aged 75 and older should grow by 73 percent.

One of the bills being co-sponsored by Heller is the Resident Physician Shortage Reduction Act. There is a similarly named bill pending in the House.

In a press release Heller said this bill would increase the number of Medicare-supported hospital residency positions by 15,000 to address the coming shortage of doctors and to try to keep new graduates from Nevada’s medical schools in Nevada and rural Nevada in particular.

“While the number of medical school graduates from Nevada’s universities continues to rise, the state does not currently have enough residency positions to keep pace with those graduates in Nevada,” said Heller. “The Resident Physician Shortage Reduction Act increases the number of hospital residency positions available to address the doctor shortage, particularly in our rural communities, and improve the quality of care patients receive.”

According to AAMC data from 2014, Nevada ranked 47th among the states in the ratio of doctors to population. Nevada had 197.4 doctors per 100,000 population compared to 265.5 nationally.

According to a news account in the Las Vegas newspaper this past November, the number of doctors per capita in rural Nevada actually declined by nearly 10 percent between 2004 and 2014.

“Those problems are aggravated in rural areas that have always struggled to recruit and retain or keep those types of professionals in their facilities and their communities,” John Packham, director of health policy research in the state’s rural health office, was quoted as saying.

The other bill being pushed by Heller is dubbed the Advancing Medical Resident Training in Community Hospitals Act. The is intended to make it easier for hospitals to start full-time residency programs by fixing a flaw in current law that prevents hospitals that have previously accepted part-time medical residents from establishing their own full-time, Medicare-supported residency programs.

“The Advancing Medical Resident Training in Community Hospitals Act aims to address the physician shortage in Nevada’s rural communities by giving community hospitals more flexibility to rotate residents,” Heller sad. “By making it easier for Nevada’s hospitals to train the next generation of physicians, our bill will increase access to care for Nevadans living in these communities.”

Though there will be a price tag on these bills, the added health care availability is well worth it.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

A reminder that NFL stadium financing is cloaked in secrecy

A hole into which money will be poured. (Rendering via R-J)

It’s just your tax money. You don’t need to know how it is being used.

A front page story in today’s newspaper reminds us of just how dreadful that deal the governor and legislators cut with the Raiders football team to build a new stadium in Las Vegas really is.

The piece reminds us the law creating a stadium authority also veils just about everything in secrecy, and again relates the stadium cost of $1.9 billion is just wild-ass guess. It could be more. It could be less. And we might never know which. If it comes in at the guessed at cost, the taxpayers will be ponying up nearly 40 percent of the cost. If comes in at the original estimate of $1 billion, the taxpayers will pick up 75 percent of the tab, plus the $900 million in road improvements for a stadium site with only 15 percent of the necessary parking spaces.

Today’s story has Stadium Authority Board Chairman Steve Hill confirming that the public won’t get much information about the financing of the stadium at I-15 and Russell Road of the confidentiality wording included in the 2016 special session Senate Bill 1.

“A big part of the information that the board will get will be confidential,” Hill quoted as saying. “The Raiders’ financial situation is not going to be a public document, so we’ll get a framework for that at a board meeting and individual board members will get a more thorough briefing outside of the public meeting.”

The 1,000-word article tells us mostly what we don’t know and probably never will. The final paragraph reports that the Raiders did not respond to email inquiries about the project and its financing and have told its contractors to not talk to the press.

Of course, the newspaper’s owner Sheldon Adelson took his promised $650 million in stadium financing and went home.

A million here, a million there, pretty soon it adds up

On Friday, Gov. Brian Sandoval signed a bill that increases the pay raises of state workers from the 2 percent a year he had proposed to 3 percent.

Previous stories indicated the 2 percent raises would cost $100 million over the next two years, so the increase should add more than $50 million to the budget when compounding is included.

Now, how much the governor seek for those education savings accounts before throwing in the towel? Oh yes, $60 million, half of what was really needed to fund those who had already signed up. Couldn’t find the scratch for that.

Sandoval tweeted:

Editorial: Is Faraday Future history?

Work has stopped at Faraday Future factory site. (AP photo by John Locher)

Gullible Nevada lawmakers in a special session in 2015 on blind faith alone agreed to dole out $215 million in tax abatements and credits to entice Faraday Future to build an electric car factory at the Apex industrial complex in North Las Vegas, though at the time it did not even have a prototype vehicle.

The deal, struck by the Governor’s Office of Economic Development, also promised to spend $120 million on infrastructure improvements at the site — water, rail and widening of Interstate 15.

Faraday officials claimed they would build a $1 billion manufacturing facility, create 4,500 jobs and start producing cars as early as 2016.

Now the company is seeking $1 billion in outside investments, while cutting more than 300 jobs in the U.S. and closing its San Diego operations. Work on the Apex site also has stopped and there have been reports the would-be electric car manufacturer is stiffing some of its contractors.

The Chinese head of Faraday Future, Jia Yueting, is reportedly experiencing a cash crunch and, after investing more than $300 million of his own money in Faraday, will not be putting up any more capital, according to a news report from Bloomberg Technology.

Jia wrote in a memo obtained by Bloomberg News late this past year, “No company has had such an experience, a simultaneous time in ice and fire. We blindly sped ahead, and our cash demand ballooned. We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited.”

After visiting China in 2016 state Treasurer Dan Schwartz, long a critic of the Faraday largesse by the state, told the press, “We’re increasingly more concerned than we were before that this is just a big Ponzi scheme.”

When word of Faraday’s fading fortunes surfaced, the head of the GOED, Steve Hill, was quoted as saying, “Trying to predict whether a company is going to succeed or flourish, or even say what they’re going to do is … you’re going to be wrong at times, maybe as often as you’re right.”

Sounds bit like playing roulette with tax money.

Reportedly the state hasn’t doled out any money to the listing electric car company yet, because the firm hasn’t reached the necessary threshold of spending to warrant turning on the taxpayer spigot.

This turn of events supports our oft-stated contention that spending taxpayer money to invite companies to come to Nevada to compete with those taxpayers is a bad idea and unconstitutional to boot.

The Gift Clause in Nevada’s Constitution states, “The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.”

Self-styled economic development advocates have tried three times to amend the Constitution and remove the Gift Clause. The voters rejected those attempts all three times — in 1992, 1996 and again in 2000 by wide majorities.
The state Supreme Court has said that when the state provides something to a private entity without getting adequate compensation for the value, that is a gift and thus a violation of the Constitution.

But the governor and our lawmakers continue to defy the Constitution with impunity. Disband the GOED and stop calling special sessions to give away taxpayer dollars.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

 

 

Newspaper column: Nevada Democrats wrongly predict disaster over Paris Climate Accord pullout

Trump explains amount of global temperature increase. (Reuters pix via R-J)

The caterwauling over President Trump’s decision to pull out of the Paris Climate Accord and renegotiate was quick, loud and anguished — including from Nevada’s usual Democratic suspects.

Freshman Nevada U.S. Sen. Catherine Cortez Masto fired off this prediction of doom and gloom: “Withdrawing from the deal would weaken efforts to combat one of humankind’s biggest threats, not only risking irreversible damage, but also harming our economy. President Trump’s decision to leave the Paris Agreement is the height of irresponsibility and an affront to our moral duty to protect our planet.”

Rep. Dina Titus of Clark County was equally over the top: “Any move to abandon this agreement will jeopardize our physical wellbeing, further undermine our standing as a world leader, and endanger our economic vitality for years to come.”

Freshman Congressman Ruben Kihuen, who presents much of Southern Nevada, chimed in by bemoaning: “Now is not the time for America to be stepping away from our leadership role on the world stage, especially when it comes to the future of the planet.”

Freshman Rep. Jacky Rosen of Clark County joined the chorus with this statement: “This decision not only places our country at an economic disadvantage relative to other countries in clean energy production and innovation, but it places us in harm’s way.”

At least Republican Sen. Dean Heller was realistic, while expressing his support for renewable energy development: “Our country will continue to move forward with the development of innovative new energy technologies that make our state and our nation’s energy supply cleaner, more affordable, and more reliable — with or without our participation in the Paris Agreement.”

Was anyone really listening to what Trump said?

Just what is the “irreversible damage?” What is the jeopardy to “our physical wellbeing” and the “future of the planet?” And how are we placed in “harm’s way?”

“Even if the Paris Agreement were implemented in full, with total compliance from all nations, it is estimated it would only produce a two-tenths of one degree — think of that; this much — Celsius reduction in global temperature by the year 2100. Tiny, tiny amount,” Trump said in his half-hour long Rose Garden speech this past week. “In fact, 14 days of carbon emissions from China alone would wipe out the gains from America — and this is an incredible statistic — would totally wipe out the gains from America’s expected reductions in the year 2030, after we have had to spend billions and billions of dollars, lost jobs, closed factories, and suffered much higher energy costs for our businesses and for our homes.”

(According to a Heritage Foundation report, if the entire industrialized world cut carbon emissions to zero, global warming would be reduced by four-tenths of a degree Celsius by 2100.)

Just how many jobs and dollars would it take to avert this impending climate cataclysm?

Citing an economic study, Trump stated that by 2040 the Paris Climate Accord would cost the economy $3 trillion in lost gross domestic product and 6.5 million in industrial jobs, as well as reduce the incomes of households by $7,000 each.

Then there is the fundamental unfairness of the deal negotiated by the Obama administration but never ratified by the Senate.

“Not only does this deal subject our citizens to harsh economic restrictions, it fails to live up to our environmental ideals,” Trump said. “As someone who cares deeply about the environment, which I do, I cannot in good conscience support a deal that punishes the United States — which is what it does — the world’s leader in environmental protection, while imposing no meaningful obligations on the world’s leading polluters.”

In fact, the United States over the past 14 years has already reduced carbon emissions by 10 percent, according to data from the U.S. Department of Energy, and that is not due to wind and solar power generation, which still accounts for only 3 percent of the nation’s energy output. It is largely due to fracking producing cheaper, clean-burning natural gas to replace coal-fired generation.

But under the Paris Accord, China will be allowed to increase its emissions for another 13 years. India’s participation is contingent upon receiving billions in foreign aid, largely from the United States.

“China will be allowed to build hundreds of additional coal plants,” Trump reported. “So we can’t build the plants, but they can, according to this agreement.”

Trump noted the agreement doesn’t eliminate coal jobs, it merely transfers them overseas.

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.