LAS VEGAS — With so many wealthy donors on the Strip, Las Vegas is a popular stop for GOP presidential candidates. And they’ve been able to count on a warm welcome from affable Nevada Republican Party Chairman Michael McDonald.
These days, however, it might be wise to avoid any photo-ops with McDonald, who finds himself mired in a $2.2 million loan scam involving a local children’s charity and a sketchy medical lien business.
McDonald served on the board of the Miracle Flights for Kids nonprofit when it voted to make a high-interest loan to Med Lien Management—where he was a confidential part-owner—in April 2013.
A conflict of interest that would have been obvious to most people was lost on McDonald. When the sleazy arrangement was exposed, he demurred, arguing that he did nothing wrong because he paid his taxes and didn’t actually vote on the loan deal. That detail was handled with the help of his close friends on the charity’s board.
He also declined to mention that the lien company’s business was conducted in part out of GOP state party headquarters, the doors of which have remained locked recently.
Nor did McDonald deign to admit he received a $200,000 finder’s fee for hustling the insider deal for the lien company. He’s also on the company books as the recipient of a $10,000 monthly fee for providing government consulting and drumming up business for the company—all under the imprimatur of the state party’s chairmanship.
After making few interest payments, the Med Lien loan defaulted in 2014. The company, steered chiefly by McDonald’s longtime pal Brad Esposito, is no longer in business.
The charity, which has provided flights for medically fragile children in Southern Nevada and nationally for more than 25 years, remains in business with donations slowing to a trickle during the ongoing controversy. Miracle Flights has its own baggage: A poor fiscal efficiency rating from charity watch organizations the criticism of founder Ann McGee for attempting to broker a six-figure retirement plan.
But when it comes to baggage, McDonald is a one-man Samsonite factory. And this past summer, he added to his trouble by quietly taking a job with State Treasurer Dan Schwartz’s office (total annual compensation is about $100,000). After word of the new “senior deputy treasurer” made the news recently, McDonald decided to resign and further embarrass Schwartz, his former finance director at the State Republican Party.
And on it goes.
Calls for McDonald’s resignation have gone unheeded. Why would he? He’s faded plenty of heat throughout his stormy political career and always come up smiling. McDonald is a former Metro police officer and Las Vegas City Councilman with a confirmed track record of poor ethics and a habit of hanging out with an array of local rogues, including mobbed-up former topless bar owner Rick Rizzolo.
Scorned by popular Republican Gov. Brian Sandoval, McDonald has nonetheless managed to carve out a constituency with Nevada’s Tea Party crowd. He understands the grinding mechanics of local politics, and the right-wingers had a field day in the Silver State’s last election cycle.
At a time he might have been content with working on his political credibility, he was also working the margins of propriety with the charity loan deal. One of McDonald’s former partners in the lien company is accused of spending part of the charity’s loan on an off-road vehicle, jewelry, and colon cleanses.
As documents emerge from a litigation brought on behalf of the charity by Las Vegas attorney Peter Christiansen, a picture of flimsy finances, abject ineptitude, free-spending, and fraud conspiracy emerges. The Miracle Flights loan flew out the door almost as fast as it had come in with big chunks traveling nonstop into the pockets of McDonald, Esposito and estranged former partner Lincoln Lee.
The defendants continue to be buried by painful facts connecting them to what attorneys are alleging is the bilking of a children’s charity.
McDonald is no longer taking questions from this reporter, but if asked he’ll surely agree to grip and grin with every visiting GOP presidential candidate who asks him. He may be running out of takers.