Governor's tax break defended by Elko lawyer

RENO " An Elko lawyer and member of the Nevada Tax Commission who helped Gov. Jim Gibbons obtain a big property tax break on 40 acres he owns in eastern Nevada defended his role and the agricultural designation the governor's parcel received as appropriate and legal.

"I'm getting tired of seeing the repeated lies in the newspapers," said John E. Marvel, who until Tuesday had not returned repeated calls from The Associated Press seeking comment.

"I feel totally offended and insulted that people are challenging this," he said. "It's a waste of taxpayer money, of my time, the governor's time, to have everybody embroiled in this issue."

The Nevada Democratic Party on Saturday lodged ethics complaints against Marvel and Gibbons, alleging they abused their positions to get Gibbons' parcel in scenic Lamoille assessed as agriculture land rather than residential, which reduced the tax liability on the property from about $5,000 to $39.71.

Ethics violations can be punished by fines of up to $5,000 plus twice the benefit an official found of wrongdoing received.

Gibbons purchased the property for $575,000 last August from former judge Jerry Carr Whitehead, who owns 3,000 adjacent acres.

Elko County Assessor Joe Aguirre has said he felt pressured to allow the agricultural designation after Gibbons visited him in his office last fall, and then Marvel submitted an application and letters on Gibbons' behalf.

Aguirre said while the governor's property historically was used for ranching, once it was sold as a separate parcel it didn't qualify for the tax break designed to help ranchers and farmers because the parcel was too small to be able to gross $5,000 in annual agricultural income.

A spokesman for Gibbons, Ben Kieckhefer, has defended the tax deferral as a legitimate assessment of grazing land and called any suggestion of intimidation "ridiculous."

"The governor was entitled to an ag use assessment," Marvel said.

"It's the operator's income that counts," he added, meaning Whitehead. "Right off the top, that qualifies. Gibbons didn't have to make one nickel."

Marvel said he was hired by Whitehead to handle the real estate sale, and that Whitehead leased the land back from Gibbons as part of the deal. He said he handled the agricultural tax designation application as part of the sales transaction.

Along with the application submitted last fall, Marvel included copies of the front sides of two checks from Whitehead totaling $5,700 for lease payments to Gibbons to show the governor had met the income requirement.

Aguirre said he had no way of knowing whether the checks had been cashed, and felt his office was put in a position of having to call the governor and Marvel liars if he asked more questions.

"To say I was put in an awkward position I think is an understatement," Aguirre, a Republican, previously told the AP.

Instead of approving the agricultural designation, Aguirre did nothing, letting it take effect by default for one year. The governor will have to reapply next year to receive it again.

When asked whether copies of possibly uncashed checks were sufficient proof of income, Marvel said, "Maybe in hindsight I should have thought differently. I guess I'm naive. I felt that was totally adequate to establish what we were doing."

Tuesday, Marvel e-mailed copies of both sides of both checks to the AP, showing Gibbons had deposited one in August and another in January.

Marvel said the land was suitable for livestock.

"The land provides a sufficient amount to produce more than one-half of the feed for the year for the agricultural pursuit," he said and described the property as "lush meadow" with marshy areas, clover and timothy.

Tax commission members are appointed by the governor. Marvel has served on the commission since 1990, and was last reappointed by former Gov. Kenny Guinn in 2005.

The commission oversees the Department of Taxation, setting regulations, enforcement and audit policies. It also hears taxpayer appeals of hearing decisions and is charged under law with ensuring taxes are applied consistently by assessors among taxpayers.

The commission is not involved in assessment appeals, a duty left to boards of equalization, but Marvel acknowledged it does oversee other aspects of assessor responsibilities.

He denied his work on behalf of Gibbons posed a conflict or was meant to be intimidating.

"It did not even dawn on me. ... I did not form the mental process that I was a member of the Nevada Tax Commission," Marvel said.