Billing Peter to pay Pete

An unusual business arrangement has some political observers scratching their heads over Washoe County Commissioner Pete Sferrazza’s contribution and expenditure reports from the last election. Drawn into the debate is Sferrazza’s wife, Julie, who ran unsuccessfully for the Ward 4 Reno City Council seat.

The problem in a nutshell is that the Sferrazzas are owners of a company that received campaign money from them in the last election.

It goes like this: Pete Sferrazza ran unopposed for the Washoe County District 3 commission seat. On his Aug. 27, 2002, campaign expense report, Sferrazza listed three payments to a company called Millennium 3, LLC—$9,327.35, $6,000 and $9,000—for advertising and consulting. On his Jan. 15, 2003, report, he listed a $10,000 payment to the same company, for a total of $34,327.30 paid to Millennium 3.

That’s a lot of money for advertising in an uncontested election.

On two out of three of Julie Sferrazza’s reports, there were five payments made to Millennium 3—$1,826.61, $2,140.00, $2,838.17, $3,453.45 and $5,754, for a total of $16,012.23.

Pete Sferrazza and Julie Sferrazza are two of the three principle officers listed on Nevada secretary of state documents for Millennium 3, LLC. The third is Marc D. Sferrazza of Sayville, N.Y., presumably a relative; the listed number for Marc Sferrazza was a fax line.

“I don’t know what to think about it,” said Eric Herzik, a political-science professor at the University of Nevada, Reno. Herzik is acting dean of the College of Arts and Sciences. “Basically, they’re taking campaign money and paying themselves. I don’t know if that’s illegal. It certainly raises the question of conflict of interest.”

Herzik says that, while he may disagree with Sferrazza about some policies, he doesn’t think the commissioner would make a legal error as far as campaign finances.

“Pete Sferrazza is not in politics to get rich and rip people off,” he said. “It would be a stretch to say, ‘Pete’s in this for the money,’ He’s taken more money out of his own pocket for campaigns and whatnot than probably anybody in their right mind would do. That’s why I think that, while it doesn’t look right, it might be right, and it probably is right.”

One official at the Secretary of State’s Office was also bemused by the question. Susan Bilyeu, deputy secretary of state for elections—who did not know specifics about the politician—said it might look bad on its face, but that could mean nothing.

“I’ve never been asked this question, and there’s nothing in Title 24 [Nevada election law] that addresses it,” she said. “It strikes me that the people who would have a problem with it are the people who contributed to this person’s campaign. But then again, you never know—they might say, ‘We know he has his own printing business, or whatever the case may be.’ The contributors [would be] the aggrieved party in all this.”

The commissioner, for his part, doesn’t see a conflict of interest in paying himself for consulting for himself and his wife.

“I have paid myself consulting fees, because I did the work,” Sferrazza said. “I don’t think that’s a conflict of interest. I normally bill $150 an hour. I have a contract between my company and my campaign indicating that if I win the election and there is sufficient money, I will pay a consulting fee.”

The former Reno mayor said that, contrary to appearances, Millennium 3 is actually a method to help keep family, politics and business separate.

“Millennium did work for my wife, and it did work for my daughter,” he said. “I do work; some of that work I bill as an attorney, some of it is not attorney work. What’s not attorney work, I generally do through Millennium.”

Sferrazza says it makes good financial sense to pay himself to run his family’s campaigns. Why should one of the most knowledgeable politicians in Washoe County pay someone else for political advice? On the other hand, costs were not broken down by individual expenditures, so it is difficult to tell which money went to what purpose.

“One of those [expenditures] is a consulting fee,” he said. “That was from a previous campaign. Everything else has been to reimburse expenses that were in fact paid by Millennium. I gave the campaign a break by not charging it at the time, but by agreeing that if I was successful, if I raised the money back, I would reimburse myself that consulting fee. The rest of it was all for advertising.”

Sferrazza said that, although he ran unopposed, there were advertising costs accrued before he knew he would not have an opponent, and there were get-out-the-vote efforts.

“I paid for mailing and postage and phone calls,” he said. “That’s the only campaign I did this time. I also wanted to—this is my judgment call—increase turnout within my district, which would help my wife [in her bid for City Council]. If I wanted to, I could have paid the money directly to her.”