A September 5, 2014 article in The Ely Times: Council raids railroad office

Two short excerpts:

Simply unbelievable. A bit of jail time is seriously needed.

Steve Hunter

If the computers and the data were password protected, and only a fool wouldn't do that, the CPA isn't going to be able to accomplish anything meaningful (unless he/she has the passwords), and Mark's no fool !

Now if it was the FBI getting the data, it's a different story, but in that case they'd take the whole computer.

Bottom line, when there's smoke in Ely, it isn't always from a steam locomotive, but....

There are too many missing pieces of the puzzle, for any of us to understand what really is going on here.

Bob H

Hi All,

The news paper article is just one of many over the years addressing the issues on the Nevada Northern. I spent a good part of yesterday calling many people in Ely getting their views which I do not plan to share. If everyone is to be believed there still are a lot of issues that still need to be uncovered. It is easy to take sides but the biggest issue for this national treasure is how does is survive this situation and move forward. I am going to encourage the moderators to watch this thread and I hope until someone speaks on the subject they look at the long standing differences and not just a glimpse that the paper's article creates.

Robby Peartree

This reads like yet another landlord-tenant-contractual failure to communicate.

Mr. Peartree, Could you please enlighten us on what the 'situation' is and why it behooves the moderators to watch this thread more closely than others where we discuss events which for the most part we have no quantifiable stake in and no control over?

GME

Dear Trainlawyer,

If people choose to discuss the issue that is their choice but is also important for those of us when discussing the issues to make sure that our point of view is based upon facts and not passions or personal agenda’s. The passions on this subject run deep with some and the issues are complicated. It is easy to get into the he said/she said discussion of they should do this. A lot of legal issues are buried in this that I expect that the issues will be explored. For the record the management board is a city board the members of the management are appointed by city council. If you look back thru recent news paper articles at one of the issues in this mess is the city removed two long term members of the management board and the board countered by suing the city. If you look even further back their was an ad hawk board set up to work on issues between city council and the board. If you go even further back (about seven years) there were issues between several employees and railroad management that are documented in board meeting minutes.

There are a lot of people who have donated a lot to both acquire and then maintain the property. I sincerely hope that when this ends there is a way for the NN to both survive and thrive with a long and bright future.

Sincerely
Robby Peartree

here's the full article before it disappears:

Council raids railroad office
September 5, 2014 By Garrett Estrada

Members of the Ely City Council and Railroad Board of Trustees entered a closed railroad office through the building’s second floor windows Tuesday afternoon in order to unlock the front door to let an auditor inside.

According to Ely Mayor Melody Van Camp, the auditor came up from Las Vegas on Tuesday to begin gathering documentation for a forensic audit approved by the council at a prior meeting.

As per the railroad’s posted hours, the museum and offices were closed all day Tuesday and the Railroad’s Executive Director Mark Bassett was on vacation. After several attempts to contact Bassett on short notice to open the office’s doors for the auditor failed to receive a reply, the members of the council moved onto finding another means of entry to the building.

After receiving permission from both White Pine County Sheriff Dan Watts and City Attorney Richard Sears, Councilman Bruce Setterstrom proceeded to climb a ladder up to the second story balcony of the railroad’s offices and enter through a window by removing an air conditioning unit.

Once inside, Setterstrom came downstairs and unlocked the front door, allowing the mayor and the auditor to gain entrance to the building. City Councilman Marty Westland was also present for the auditor’s entrance into the building and remained inside while the auditor gathered the documentation.

“This is the only way to get easy information,” Van Camp said, calling the whole incident, “not a big deal.”

Bassett didn’t agree, calling the entrance a “break-in.” Referring back to a recent restraining order filed by the railroad’s management board, Bassett called the forensic audit a “moot point” due to it being “agendized improperly and never given public comment.”

The executive director criticized the council members methods, saying that Setterstrom and Van Camp tried to harass railroad employees into opening the locked doors.

“They elected to break into the building,” Bassett said. “They knew we were closed today. (Setterstrom) threatened two of my employees here. We filed a police report on his actions.”

The police report filed also included a threat by Setterstrom against The Ely Times reporter, who arrived while the council members and the auditor were in the building.

Once inside, Nicholas Miller, the auditor representing the auditing firm Bertsch, CPA & Associates, LLP, plugged into computers within the office to gather the documentation. Van Camp said that communication issues with the management board were to blame for the late notice of the auditor’s visit.

“I knew that the train was closed but I knew there would be somebody around. No management board, nobody will talk to any of us. The management board members communications were blocked, they won’t respond, they won’t talk, they won’t do anything,” Van Camp said. “So we could not alert them to say that our auditor was coming.”

Vice-Chairman of the Railroad Management Board Roger Bowers refuted the mayor’s claims of being inaccessible, saying that he had “never received anything from the mayor.”

Scott Husbands, the lawyer representing the railroad management board, said a “court would have to look over” whether or not Setterstrom was legally allowed entrance to the building, despite the city attorney and sheriff’s approval.

Husbands, whose firm Gianoli Husbands PLLC partnered with an Elko law firm Goicoechea, DiGrazia, Coyle and Stanton to draft and eventually file a lawsuit on behalf of the railroad management board suing the city council and board of trustees, said that “common sense” would have shown that not enough notice was given for the auditor’s visit Tuesday.

“There wasn’t any notice. The railroad was closed on Tuesday, like it always is on Tuesdays and Mark was on vacation,” Husband said. “For them to just show up to the depot, unannounced, when the depot is closed and expect it to be opened and expect someone to show up and sit with them while they go through those things to see what they are taking, we just didn’t have a chance to do that. They just decided to break in.”

Tuesday night’s events follow a crowded city council meeting held on Aug. 28, where the council and railroad board of trustees appointed two new members to the railroad management board, Judy O’Brien and Terry Walker. A controversial agenda item to release the other three remaining members of the board was tabled until the council’s next meeting, due to the pending lawsuit by the board.

According to Van Camp, the immediacy with which the auditor was summoned to Ely was largely due to a former railroad employee releasing information to the trustees and the auditor himself.

“This former employee was very passionate, and just really upset and felt like the new management board members needed to know of some things,” Van Camp said, who would not release the identity of the former employee or what they might have said that sparked the auditor traveling up to town on Tuesday.

I agree with this comment on the newspaper website:

How could the sheriff and city attorney authorize such an act?

Some more articles, editorials and letters-to-the-editor that The Ely Times has published this year:

Editorial: Council needs to obey laws (September 5, 2014)

Point of View (September 5, 2014)

City Council approves two for railroad board (August 29, 2014)

Lawsuit filed against city council (August 29, 2014)

Point of View – City Council (August 29, 2014)

Letters to the Editor (August 29, 2014)

Editorial: What is city council thinking? (August 22, 2014)

Railroad board to sue city (August 22, 2014)

Council fires top two on railroad board(August 15, 2014)

City Council approves audit of NNRY (July 4, 2014)

Railway could receive $15 million (April 4, 2014)

City Council, Railroad board form new oversight committee (February 28, 2014)

Point of View (February 28, 2014)

Council makes progress on railroad (February 21, 2014)

Letters to the Editor (February 14, 2014)

Key figures in railroad battle have history(February 7, 2014)

Point of View (February 7, 2014)

Letters to the Editor (February 7, 2014)

Railroad under fire? (January 31, 2014)

Railway beats bank challenge (January 24, 2014)

Thank you Chris,
It's clear that there is quite a bit of reading to do here.
The elephant in the room here as I understand it so far is that the city is the property owner and the NN manages the property for the city. It is not quite the same as if the city had decided on its own to break in and audit a private business.

Newspaper reports are by nature summaries, there just is not the space to print everything. Based on what I have read so far there may well have been a good faith reason to believe they had the authority to proceed. Whether or not it was the prudent course is an entirely separate question.

GME

Dear Mr. Lisowki

I really do not have time or the contacts to fairly portray all sides of the issues and not fairly portraying the issues would be an injustice for all. Yet ignorance does not stop many from posting. Looking at the responses before I even posted it was suggested that someone needs to go to jail! While issues may come out of a forensic audit I do not believe it is the goal of anyone involved to throw another in Jail. Furthermore it amazes me how one can contantly repeat an opinion untill everyone seems to believe it as fact no matter what the facts actually show.

The management set up of the railroad is a complicated system and somewhat similar to the C&TS (for those familiar with the commission set up). This situation was apart of Kennecott’s requirements for donating the property.

I know Mr. Bassett told the R&LHS that they could use the freight house for their national meeting and yet never bothered to tell the freight house owner the, state of Nevada, until the week of the convention. His ability to communicate has had its issues. Fortunately the State was notified in January when the agenda came out so the meeting could happen as planned in spite of the lack of communication. There are a lot of things that do not make a paper or are told in an objective way. For the record, Mr. Westland’s house is across the street from the office and Mr. Bassett’s house. I believe that Mr. Westland, Mr. Bassett and everyone else involved believe they are doing what is best for the NN. For the NN I certainly hope so.

In the mean time there are people who have put a lot of work into the property, they have worked for the betterment of the property, and now will likely be left with spreading the fertilizer after the mess making is done. I hope for them the results do not take the property down no matter what side is right or wrong.


Robby Peartree

Thanks for posting these -- for an organization of the Nevada Northern's size, complexity and amount money moved through the books, an independent outside audit is normal (and in many states required by state law) and the amount quoted for the cost of the audit seems reasonable.

I don't think Mark would be as successful as he is in getting grants (and he's very good at that), if these audits showed there were any problems with the financial books and records.

I don't think the Nevada Northern is the biggest tourist attraction in the state, however, because there are places like Reno and Vegas and even Lake Tahoe.

<lol>

Bob H

But, it and the Great Basin National Park are the two principal attractions for White Pine County and Ely, its major community.

This kind of scenario--whatever the heck is actually going on here--really gives one a cautious example of why government ownership/management of a historic railroad and property may not always be the "match made in heaven" or "white knight of salvation" some may think it would be for, as one example, the East Broad Top............

"Nicholas Miller, the auditor representing the auditing firm Bertsch, CPA & Associates, LLP, plugged into computers within the office to gather the documentation. Van Camp said that communication issues with the management board were to blame for the late notice of the auditor’s visit."

As a licensed CPA, I can tell you that this is likely a violation of professional standards, if nothing else Rule 501, Acts Discreditable (The "conduct unbecoming an officer" section of the professional rules)

http://www.aicpa.org/Research/Standards ... t_500.aspx


No CPA that I know would enter a facility under these circumstances and begin accessing records.




On the chance that Mr. Bassett or others are reading this thread, contact the following:


The Nevada State Board of Accountancy:

http://www.nvaccountancy.com/complaints.fx


Also, I would assume the individual in question is a member of the Nevada Society of CPA's

https://www.nevadacpa.org/


and the American Institute of Certified Public Accountants.


http://www.aicpa.org/interestareas/prof ... howto.aspx


I've got this feeling this will end up being a case study in future ethics classes.


Post Script:

After viewing the website to review the firm Mr. Miller works for, I see that his listed credentials do NOT include being a Certified Public Accountant.

Professional ethics WOULD however, require his employer to properly supervise his activities. This is beyond bizarre that an entrance conference wasn't held.