Update: Gibbons move to control stimulus money may flout law

Gov. Jim Gibbons Friday issued an executive order taking control of the stimulus program and creating a director to manage it.

Gibbons said he doesn't need and will not ask the Legislature's authorization to received and spend any of the money because the state constitution leaves it to the governor to run the state and the American Recovery and Reinvestment Act puts the governor, not lawmakers, in charge of the money.

"The money does not go through the Legislature," he said at a press conference in Sparks.

Furthermore, he said the state controller's office, where lawmakers put control over the ARRA funding, has no authority and no business managing his executive branch agencies.

Nevada is expected to receive in excess of $2.2 billion in ARRA money.

Gibbons said the $120,000 a year ARRA Director would be paid for out of the ARRA money itself. Asked whether he can create such a position, he said he can do so without legislative approval. His Chief of Staff Robin Reedy said he can do so "because it's a non-classified position."

His executive order flies in the face of long-standing law requiring legislative approval to spend any money. According to Legislative Counsel Bureau Director Lorne Malkiewich, the State Budget Act, NRS353, requires legislative approval to receive and spend any federal money.

He said it's his understanding that ARRA puts the governor in control of the money, "unless otherwise provided by state law and our state law requires it go through the state budget act."

There was little appetite among lawmakers, however, to challenge the governor for fear of opening up a possible constitutional challenge to IFC.

Senate Majority Leader Steven Horsford, D-Las Vegas, issued a statement making clear he has very little faith in the governor, who he said, "proposed an unworkable state budget and was absent from the legislative process."

"State law requires that the Legislature's Interim Finance Committee review grants provided to the state to ensure they are well spent," he said, adding that lawmakers will follow that process with ARRA money as it comes to Nevada.

But he gave no indication of any desire to fight the governor on his executive order.

Senate Minority Leader Bill Raggio, R-Reno, said he would urge the Democratic majority to call an emergency meeting of IFC to correct their vote and move the ARRA coordinator back to the budget office under the governor's control where it belongs.

Raggio said putting the program under the controller "was inappropriate."

"It was strictly a partisan vote," he said. "More than that, it was a personality issue and, in my opinion, a slap at the governor."

Raggio said both sides need to resolve the situation and avoid any potential litigation.

"Unfortunately, if there's going to be litigation over this, understand there's always been a question about the constitutional authority and legality of the Interim Finance Committee and Legislative Commission. My advice is to have IFC meet as expeditiously as possible and get this resolved."

The move is the latest in the running battle over ARRA reporting requirements. Gibbons originally proposed spending some $230,000 in state money to set up an ARRA coordinator and executive assistant to handle reporting. The Legislative Interim Finance Committee balked at putting it in the governor's office and, instead, put the positions and the program under Controller Kim Wallin.

"There is no authorization for the controller to give directions to any executive branch agency," said Gibbons Friday. "Whether their action is legal at all is another question."

He said his ARRA director will manage the receipt and distribution of the money but that the information will then go to the controller who can report to the federal government. 

Raggio said he agrees with the governor that moving the program was inappropriate and potentially an over-reach of IFC's authority.

Asked whether they had gotten a legal opinion saying the executive order was legal and constitutional, Gibbons and Chief of Staff Robin Reedy danced around a clear answer saying the proposal had been submitted to the attorney general's office. They did not say they had received legal advice that the order was legal or constitutional.

The attorney general's office said a copy of the executive order was forwarded to them but that no legal opinion was requested by the governor.

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