Rory Reid agrees to $25K fine in PAC case

Rory Reid has agreed to pay a $25,000 administrative fine after an investigation into his use of political action committees to funnel hundreds of thousands of dollars into his failed gubernatorial bid, Secretary of State Ross Miller said Friday.

The settlement involves $933,000 in contributions received by Reid's Economic Leadership PAC. Some of that money was then dispersed to 90 smaller committees that made contributions to his campaign.

Two campaign employees, David Cohen and Joanna Paul, agreed to a collective fine of $2,500.

The settlement statement said that while Reid's campaign interprets the state law differently, Reid and the others acknowledged that "if the matter were to proceed to litigation, sufficient evidence exists such that the secretary of state's conclusion could be sustained by a trier of fact."

Reid had consulted with election lawyers as well as the secretary of state's office and believed the arrangement was legal.

"I am gratified there is an acknowledgment that there was no bad faith on my part, and that my campaign sought legal advice and the advice of the secretary of state's office before proceeding," Reid said in an email to The Associated Press. "I disagree strongly with the secretary of state's interpretation of this ambiguous law, but to avoid the burden of litigation I agreed to this settlement."

Miller acknowledged that an attorney for the campaign contacted his office "and believed, based on that verbal conversation, that the campaign finance structure was permissive under Nevada law."

Reid, the son of U.S. Senate Majority Leader Harry Reid, lost the governor's race in November to Republican Brian Sandoval.

State law limits contributions from PACs to $10,000 per election. The investigation surrounded accusations, first raised by Las Vegas Sun political columnist Jon Ralston, that those limits were skirted when large contributions to the Economic Leadership PAC, an umbrella group, were then dispersed to a network of the smaller PAC committees to make donations to Reid's campaign.

The 90 smaller PACs were registered using the same Las Vegas residential address and were dissolved after the November election.

According to the secretary of state, Cohen and Paul formed and registered the smaller PACS and did not disclose any affiliated organization.

Reid's campaign and the PACs complied with all reporting requirements, the settlement statement said.