Monday, March 23, 2009

Spokesman: Reid Did Try To Help MGM With Banks

The Review-Journal yesterday published an allegation by an unnamed gaming analyst that Sen. Harry Reid was calling banks on behalf of MGM Mirage and asking them to give the casino giant $1.2 billion in loans for it to complete the $9.1 billion CityCenter development on the Strip. Yesterday, MGM Mirage spokesman Alan Feldman denied this to VegasHappensHere.Com.

Today, though, I received a somewhat more complicated response from Sen. Reid's spokesman, Jon Summers. Here's the statement:

"The Review-Journal's characterization is inaccurate. Senator Reid has simply been asking banks to take a fair look at MGM’s CityCenter project to ensure that sound banking analysis is driving credit decisions, not irrational temerity over what is sometimes portrayed as a controversial industry. As we have seen on a national level, the lack of credit flow has created a hardship for a number of businesses and industries, including in Nevada. At a time when the state’s unemployment rate is higher than 10 percent, it makes sense that Senator Reid would take appropriate steps to try to help Nevada’s biggest employer complete the state’s biggest new project. With 10,000 current jobs and more than 50,000 direct and indirect future jobs on the line, Nevadans would expect nothing less."

OK. So then Sen. Reid DID ask the banks to examine this specific project? Via AIM, I asked Summers to clarify:

VegasHappensHere: Your statement does not deny that Reid has called banks on MGM Mirage's behalf.
Summers: Right, but he has not been raising money.
VegasHappensHere: I'm trying to decipher the difference. Reid has called banks and said, say, "Hey, please take an honest look at whether this is a good company and project to loan money to? Don't just say no out of hand?" Something like that?
Summers: Exactly. He wanted to make sure that a potential loan would be given serious consideration. The loss of this many more jobs would be devastating.
VegasHappensHere: Do you think making such a call would make the banks feel pressured because it's coming from Sen. Reid?
Summers: Again, he didn't call and say, "Loan them this money." He wanted to make sure that the company got a fair review. Those are two different things. Do we all hope that a fair review would result in an outcome that would preserve the jobs? Yes. But there is still a difference.

The thing I wonder is, if I'm a bank and Sen. Reid is on the line saying, "Take a REALLY good look at this one," do I feel implicit pressure? Is there any way for Sen. Reid to be involved in such an effort and not have the weight of his position come to bear? Are other senators calling banks with similar requests for companies and projects in their states?

9 comments:

C S Not Lewis said...

I believe you would have to feel implicit pressure because of the position that he has. Not his senate position but his majority position.
You can't tell me that when someone takes a personal invested interest in something that if somebody says "no" that it is just forgotten.
I would not want to be the bank to say "No" and then be punished for it somehow down the road.
I would have to think that this is somehow stepping outside the boundaries of his position.

Anonymous said...

but the funniest thing is...mgm didn't get the money, did he?

Anonymous said...

I wish my Senators had the juice to make those calls for Oklahoma. We had that kind of power from 1955 to 75, and we're still drawing the benefit. This is good for Nevada, pure and simple. Pork is only evil when it is going somewhere else.

Jeff in OKC

msloan said...

wow, Michigan Senators tried to save the auto industry and its workers, farm state farmers try to help farmers, mining state senators try to help miners and Nevada's senior senator asked the banks "to take a close look" at a request to loan money to the state's largest employer and tax payer who presently employees 12,000 construction workers plus 50,000 hotel and casino workers. Good for Harry!

http://texex-xpress.blogspot.com/ said...

And it had nothing at all to do with MGM being Reid's biggest contibutor by far!

"Have you no shame Senator - at long last have you no shame at all..."

msloan said...

when you make stuff up like that at least have the guts to sign your name so we know who the crazy people are. I will await your details from the FEC

Jinx said...

Nice work for the follow-up Steve, and I realize that the issue of whether the Senator's position is a conflict of interest in lobbying the banks. But I'm surprised by the outrage from it. As pointed out in the comments, auto industry states and others rail for support of their companies and a Senator's role is representing his state. While I understand that Senator Reid is a bit of a target now a days for the opposing party. I only wish our Senators and Congressmen in Ohio seemed to be as concerned about our largest employers or employment here in the state.

http://texex-xpress.blogspot.com/ said...

msloan8:58 - you do know how to click on a link, don't you? DUH!

Put your little cursor thingy on "MGM being Reid's..." and left click. It will take you to OpenSecrets.org when you will find Reid and his PAC contribtors listed.

KeelgarTrout said...

Isn't helping the largest taxpayer and employer in their state something we want Senators to do?