WASHINGTON - By the time Byron Georgiou came to Washington, he had already been a top adviser to a California governor, prosecuted Enron executives and established himself as a top donor to Senate Democrats.
But it was Harry Reid's appointment of Georgiou to the Financial Crisis Inquiry Commission - tasked with producing the official record and recommendation on how the financial services industry brought down the economy - that established him as a figure in national politics and gave him an impressive credential he has brandished in his bid to represent Nevada in the U.S. Senate.
But according a senior Democratic aide close to Reid, the Senate majority leader is rethinking his decision.
"Given Byron Georgiou's financial history, and the ethical concerns raised regarding his tenure at the FCIC, Sen. Reid regrets appointing him to the commission," the aide said.
That sort of recanting casts a cloud not only over Georgiou's reputation, but the work of the commission, which released its report in January.
Reid isn't the first to raise concerns about whether all the work by the commission was ethical. California Republican Rep. Darrell Issa's House Oversight and Government Reform Committee this year began investigating whether Georgiou and lead investigator Chris Seefer had broken the commission's ethical rules regarding conflicts of interest and confidentiality.
Georgiou and Seefer are employees of the law firm Robbins, Geller, Rudman & Dowd, which is prosecutor in a case against Goldman Sachs. The firm is representing pension funds accusing the investment bank of misleading fund managers about losses from an investment tied to subprime mortgages.
Although the firm was only named colead counsel in March, and Seefer and Georgiou were technically "on leave" during their commission service, they apparently maintained ties with the firm.
In September, Georgiou addressed a closed-door meeting of "public fund fiduciaries" hosted by Robbins Geller as "distinguished speaker" affiliated with the firm, appearing with commission Chairman Phil Angelides, who billed the talk with a promise to deliver a sneak-preview of its conclusions.
Angelides is one of three former commissioners listed as contributors to Georgiou's campaign; the other two are former Commodity Futures Trading Commission Chairman Brooksley Born and former IBM Vice President and Symantec CEO John Thompson, both appointees of House Democratic leader Nancy Pelosi.
Reid's concern appears focused on Georgiou because he was one of Reid's three appointees. (The other two were former Sen. Bob Graham of Florida and former top Merrill Lynch exec and Nevada Cancer Institute co-founder Heather Murren - although Reid also had to approve Angelides, Pelosi's third appointee, as chairman.)
A spokesman for Reid declined to comment for this story.
"While (Georgiou) was participating on the commission, he was speaking in public and giving private speeches that were in violation of the ethics code for the commission," the aide close to Reid said. "Sadly, with some of the things now that we've come to know, I think his participation on the ... commission taints the entire scope of his work and his involvement. That's not fun to say."
But Georgiou has an alternate theory to explain why Reid might be reconsidering his appointment: Georgiou is running for Senate against Reid's favored candidate, Rep. Shelley Berkley.
"When the commission's report was issued on Jan. 27, it was widely praised as the definitive examination of the causes of the financial crisis that has devastated the lives of so many Americans, hitting Nevadans particularly hard," Georgiou said in an email. "Among those effusively praising the work of the commission and its report when it was issued in January was Senate Majority Leader Harry Reid.
Therefore, Georgiou concludes, the criticisms must be "part of the continuing efforts of the Shelley Berkley campaign to disparage my candidacy."
Georgiou is challenging Berkley for the Democratic nomination to Nevada's Senate seat in 2012, which Republican John Ensign vacated in May, and which Republican Rep. Dean Heller was appointed to fill. Georgiou is considered an underdog.
But Georgiou's Senate campaign isn't the only thing that could be affected by Reid's criticisms. Adding to Issa's inquiry, it effectively makes the concerns about the panel's findings bipartisan - which could be problematic for the Obama administration, given that the commission spent 18 months and $8 million on the endeavor touted as the definitive take on the financial meltdown.
In total, the commission's ethics guidelines suggest Georgiou could have up to nine potential points of violation, if the allegations that appear to have independently been brought to the attention of both Issa and Reid are substantiated through further inquiry. Those include possible violations of rules concerning gifts to commissioners, conflicts of interest and recusals (Georgiou took none), disclosure of information, and public speaking engagements and public statements made outside the commission process.
The Democratic aide said Georgiou did not make his affiliations with Robbins Geller known to Reid before his appointment, and neither was Reid privy to information about Georgiou's financial history before making his nomination.
That calls into question why more vetting wasn't done.
Georgiou moved to Las Vegas in 2005, having built several successful business enterprises in California, and established himself as a plaintiff's lawyer to be reckoned with during the course of the Enron trials. It was after he moved to Las Vegas that he became acquainted with Reid.
In 2006, Georgiou started making hefty donations to the Democratic Senatorial Campaign Committee, giving $10,000 that year, $28,500 per year from 2007 to 2009, and $30,400 last year, for a total of $125,900. Those latter figures are all at or within a few hundred dollars of the legal ceiling for annual donations to the committee. He also donated the maximum allowable contribution to Reid's 2010 re-election campaign.
The aide acknowledged that Georgiou was "a prominent giver and donor," but said Georgiou's financial contributions didn't influence Reid's decision: Georgiou simply appeared "qualified to serve on this commission."
"There is not a vetting process like there would be for a nomination. There are a lot of acceptances taken into account of: I think I know this person," the aide said. "You expect people to be honest, but you also expect people to have good judgment ... he's just not being forthright and honest, and that's arrogant."
Georgiou maintains that his work on the commission was beyond reproach, and that there is nothing to uncover.
"In the almost five months since the commission's report was issued in January, or the commission's existence ended on Feb. 13, the promised investigation has yielded nothing," Georgiou said of Issa's investigation, which appears focused on grounds similar to Reid's concerns.
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READERS WEIGH IN
A version of this story was published online at 2 a.m. Monday. Here is a sampling of reader comments: Join the conversation at lasvegassun.com.
Byron Georgiou is a good man at the wrong place in time. He falls into the same category as Jack Carter did when the ex-president's son ran. Nice guy, won't win, why bother.
— Chandler LeVrIcH
No matter the motive of Sen. Reid in coming out against Byron Georgiou, the questions we need to ask and stay focused on are: Did Byron Georgiou break ethical codes? And is Bryon Georgiou in a conflict of interest dealing with his law firm?
I don't know if Georgiou is on the up and up or not, but Reid has a long, long record of playing politics first and ethics last.
— Dale Swanson
Source: Las Vegas Sun