Reid pays interest on illegal donation

A seven-year-old political donation has proven costly for the Senate’s most senior Democrat.

Sen. Harry Reid (news, bio, voting record), D-Nev., last year refunded a $3,000 check he got in 1999 from a Texas friend, Ben Barnes, after a public interest group revealed it was improper. Now he’s paid Barnes more than $1,600 in interest, according to recent filings with the Secretary of the Senate.

The filings were disclosed Monday by PoliticalMoneyLine, which tracks campaign spending.

Barnes, a lobbyist and former Texas lieutenant governor, made the donation in question to a legal defense fund Reid had established to cover costs of his 1998 Senate race recount, which he won by 428 votes over Republican John Ensign.

Congressional ethics rules prohibit registered lobbyists from donating to lawmakers’ legal defense funds, which members of Congress are allowed to set up to pay for legal fights. Barnes had only recently registered as a lobbyist and said at the time that it was an innocent mistake.

Reid’s defense fund shut down in March 2001, and the donation went unnoticed until the Center for Public Integrity released a report in August 2005 about a handful of lawmakers, Reid among them, who’d accepted improper lobbyist donations into their legal defense funds.

Reid brought the matter to the Senate Ethics Committee, his spokesman said, and repaid the $3,000 to Barnes in October 2005. The Ethics Committee subsequently told him he should also pay interest for the time he had the donation. Reid had an accountant calculate the proper amount using the statutory rate under Nevada law — prime plus two percent adjusted annually — and cut Barnes a check for $1,611.47 on May 22 out of his campaign fund.

“As soon as this came to our attention we resolved this as quickly as possible,” said Reid spokesman Jon Summers, attributing the delay to time needed to work through the process.

The Ethics Committee also noted that three quarterly reports for the defense fund had never been filed. The reports were for the end of 1999 and the first two quarters of 2000, when there was no activity in the account. Reid filed those reports July 31 with the Secretary of the Senate.

Copyright © 2006 The Associated Press