His career in public service has ended up being remarkably lucrative.
Try this
thought experiment. Imagine that someone grows up in poverty, works his way
through law school by holding the night shift as a Capitol Hill policeman, and
spends all but two years of his career as a public servant. Now imagine that
this person’s current salary — and he’s at the top of his game — is $193,400.
You probably wouldn’t expect him to have millions in stocks, bonds, and real
estate.
But, surprise, he does, if he’s our Senate majority leader, whose net worth is between
3 and 10 million dollars, according to OpenSecrets.org. When Harry Reid
entered the Nevada legislature in 1982, his net worth was listed as between $1
million and $1.5 million “or more,” according to the Las Vegas
Review-Journal. So, since inquiring minds inquire, let’s try to figure out
how Reid’s career in public service ended up being so lucrative. He hasn’t
released his tax returns, which makes this an imperfect science, but looking at
a few of his investments helps to show how he amassed his wealth.
In 2004, the senator made $700,000 off a land deal that was, to say the
least, unorthodox. It started in 1998 when he bought a parcel of land with
attorney Jay Brown, a close friend whose name has surfaced multiple times in
organized-crime investigations and whom one retired FBI agent described
as “always a person of interest.” Three years after the purchase, Reid
transferred his portion of the property to Patrick Lane LLC, a holding company
Brown controlled. But Reid kept putting the property on his financial
disclosures, and when the company sold it in 2004, he profited from the deal — a
deal on land that he didn’t technically own and that had nearly tripled in value
in six years.
When his 2010 challenger Sharron Angle asked him in a debate how he had become so
wealthy, he said, “I did a very good job investing.” Did he ever. On December
20, 2005, he invested $50,000 to
$100,000 in the Dow
Jones U.S. Energy Sector Fund (IYE), which closed that day at $29.15. The
companies whose shares it held included ExxonMobil, ChevronTexaco, and
ConocoPhillips. When he made a partial sale of his
shares on August 19, 2008, during congressional recess, IYE closed at
$41.82. Just a month later, on September 17, Reid was working to bring to the
floor a bill that the Joint Committee on Taxation said
would cost oil companies — including those in the fund — billions of dollars
in taxes and regulatory fees. The
bill passed a few days later, and by October 10, IYE’s shares had fallen by
42 percent, to $24.41, for a host of reasons. Savvy investing indeed.
Here’s another example: The Los Angeles Times reported
in November 2006 that when Reid became Senate majority leader he committed to making earmark
reform a priority, saying he’d work to keep congressmen from using federal
dollars for pet projects in their districts. It was a good idea but an odd one
for the senator to espouse. He had managed to get $18 million set aside to build
a bridge across the Colorado River between Laughlin, Nev., and Bullhead City,
Ariz., a project that wasn’t a priority for either state’s transportation
agency. His ownership of 160 acres of land nearby that stood to appreciate
considerably from the project had nothing to do with the decision, according to
one of his aides. The property’s value has varied since then. On his
financial-disclosure forms from 2006, it was valued at $250,000 to $500,000.
Open Secrets now lists it as his most
valuable asset, worth $1 million to $5 million as of 2010.
How Reid acquired that land is interesting, too. He put $10,000 into a
pension fund his friend Clair Haycock controlled, to take over the 160-acre
parcel at a price far below its
assessed value. Six months later, Reid introduced legislation that would
help Haycock’s industry, a move many observers said appeared to be a quid pro
quo, though Reid and Haycock denied that the legislation was the result of a
property deal.
We don’t know how much more money Reid has or how he made all of it. For
that, we’d have to see his tax returns.
— Betsy Woodruff is a William F. Buckley Fellow at
the National Review Institute.
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