Sunday, March 22, 2009

Sen. Reid calling banks for MGM Mirage?

Just one article into this morning's Review-Journal, already I'm struck by something that seems like it could be an enormous scandal and right-wing outrage if true. But I wonder if it is because R-J gaming reporter Howard Stutz buried it so deep in his column that either he doesn't see the implications or he's not all that confident about his anonymous source.

Stutz's column is mainly about what Kirk Kerkorian is up to now that his company is teetering on the brink of bankruptcy or worse. After MGM Mirage CEO Jim Murren says point-blank that Kerkorian is not involved in negotiations with lenders, here's the passage that grabbed me by hte collar:

One gaming analyst said Kerkorian and Senate Majority Leader Harry Reid, a close friend, have been calling financial institutions to try and raise the remaining $1.2 billion needed to complete the $9.1 billion CityCenter development.

Um, wow. The nation's most powerful legislator is ringing up investment houses big enough to pony up $1.2 billion and pleading with them to save a massive Strip casino development? Really? Does that sound sane to you? Sure, Reid has to be worried about what an MGM default could do to the rest of the already-tattered Nevada economy, but he's also in the throes of attacking the same institutions for the risky, lousy investments that led the nation to this precipice. And he's already taking some heat for possibly sheltering AIG prior to the bonuses scandal. Such phone calls would seem to be laden in all sorts of ethical and political minefields.

I just had this text-message exchange with MGM Mirage spokesman Alan Feldman.

VegasHappensHere: Howard Stutz reports today that Reid has been calling banks for MGM trying to help get you loans for CityCenter. Is that possibly true?

Feldman: Not the way Howard wrote it. We (and hundreds of other businesses arond the country) have tried to use any possibly avenue to get banks lending again, including asking politicians to weigh in. They're not being asked to involve themselves in any of the detail, just to emphasize the larger public interests at play in making loans and getting the flow of credit started. This is very similar to the dialogue on Capital Hill in House and Senate banking committee hearings."

VegasHappensHere: So do you know of an instance where Reid has called a bank to ask them to give MGM or any other gaming company a loan?

Feldman: No.

I'm waiting to hear back from Sen. Reid's office as well. But such a claim is so incendiary and controversial that I'm a bit surprised the newspaper would run with it if Stutz didn't have at least a few sources claiming the same thing. Still, he clearly states it's the speculation of "one gaming analyst" who is granted anonymity. So it's either true and a huge scandal or it's irresponsible journalism.


Anonymous said...

Reid's corrupt. MGM is corrupt. The R-J is corrupt. Hard to pick just one asshole out of the bunch, steve.

Tom M. said...

Pigs don't know pigs stink.