Loux says he wasn't unethical in changing salaries

Attorneys for Bob Loux, the embattled director of the Nuclear Projects Office, say he never intentionally or unethically used his position in raising his and other salaries in his office.

"While he takes full responsibility for mistakes that may have been made and for errors in judgment, the allegations of improper or unethical conduct are faulty at their original premise," said the response to the Ethics Commission complaint by attorneys Judy Sheldrew and Tom Perkins.

Assembly Minority Leader Heidi Gansert, R-Reno, filed a complaint after Loux admitted during an Interim Finance Committee hearing he had raised his own salary and the salaries of his staff without permission.

The practice apparently started in 2005 and, as of this fiscal year, Loux was paying himself $151,542 " $37,454 more than his authorized salary, according to the budget office. Over that period, he and seven others in his office reportedly received $195,790 more than they were entitled to. They used the salary money from a vacant position and grant money to cover the costs.

Those salaries have since been rolled back and the state is moving to collect the overpayments from previous years.

In the response to the Ethics Commission, Sheldrew and Perkins said the salaries reported by the budget office are incorrect, that Loux " for example " wasn't being paid $151,000 this year but $132,100 " about $10,000 less than the governor.

They said the salaries reported by the budget office are incorrect, that Loux " for example " wasn't being paid $151,000 this year but $132,100 " about $10,000 less than the governor.

Other salaries were also incorrectly reported, his attorneys said.

Referring to the redistribution of the unused salary money, they said Loux believed he had the authority to move that money to change those salaries.

That authority is contained in state law that made employees in the governor's office " where Nuclear Projects is located " non-classified. That was designed to permit the governor to set salaries of those reporting within his office. According to Sheldrew and Perkins, Gov. Kenny Guinn established two guidelines: Salaries were to stay within the available budget and no staff person's salary was to exceed that of the governor himself.

The redistribution of salary savings, Sheldrew said, "resulted from a series of misunderstandings by Loux and his staff accountant regarding his authority to direct such a reallocation."

She said Loux believed he had that authority because of his understanding of the non-classified staff law. That law, however, says specifically that the governor can set salaries within his office, not individual directors.

"No combination of these errors, however, would support a finding of unethical conduct," the response said.

"The historical approval of the actions taken by the agency to balance the salary category in its budget over a period of many years combines with the total lack of any evidence of concealment or fraud to contradict any suggestion of an unwarranted benefit or ethical lapse," it concludes.

The response argues those salaries were all made on standard personnel forms, approved by personnel and reviewed by the budget office, a "completely transparent" process.

But the response said for some reason, the 2005 Executive Budget failed to include the actual salaries being paid in the Nuclear Projects Office and that cost of living adjustments weren't included. As a result, the salary category was under-budgeted and has been since.

The shortfalls were made up with existing funds within the agency "with the approval of the Office of Administration." 

A hearing is scheduled in December before the Ethics Commission.

While the Nuclear Projects Commission has decided to terminate Loux, he remains on the job until a replacement is hired. The commission did that because, after some 20 years of battling, the federal government is moving forward this year with its attempt to license and open the Yucca Mountain Nuclear Dump in southern Nevada.

- Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.