A Virginia & Truckee Railway commissioner's plan to run a luxury rail car as a private business on the publicly funded tourist track has brought into question how involved commissioners can be in the business aspect of the $35 million project.
Bob Hadfield, chairman of the Nevada Commission for the Reconstruction of the V&T Railway, said Friday he will ask board members if they have any concerns about fellow member John Tyson attaching a private business to the V&T. This item is not on the agenda, so the board cannot take any action on it.
"John Tyson has met with me and understands that there is a potential conflict of interest here," Hadfield said. "In fairness to him, he is trying to make sure, before he invests in buying the rail car, whether the commission has a problem with a car he may have some interest in operating on the railroad."
Tyson, KOLO Channel 8's rural reporter and host and producer of "John Tyson's Journal," is also a Federal Railroad Administration-certified locomotive engineer for the Nevada Northern Railway in Ely. He was appointed to the state board in June. He could not be reached for comment by press time.
Tyson has said he plans to run the private luxury coach behind the V&T steam engine.
"It's a private business coach once occupied by the King of England," he said in a past interview.
Tyson said the 82-foot-long, 91-ton coach has three bedrooms, two bathrooms, full galley and observation lounge. He said it was part of the 1939 Royal Canadian train tour. The rail car would be rented out by the day.
Hadfield said a larger issue is who should operate the reconstructed railway: the commission or an independent operator. Tyson's business plan would hinge on this because he may have to contract with the rail operator to run his coach.
The board will decide at its Monday afternoon meeting if it wants to hire a consultant to begin the process of looking for a qualified railroad operator (see related story).
Hadfield favors the board contracting out the operation of the railway.
Tyson, in a previous board meeting, said he had some reservations about bringing in an outside operator, saying there are experts available in western Nevada to handle almost every aspect of the railroad. Tyson also said at the Nov. 7 meeting that those who have been involved for as long as 30 years in the project should "reap the benefits."
The chairman said he is not opposed to Tyson entering into an agreement with the railway operator. He said Tyson's rail car, and other proposed business ventures similar to this, "enhances the overall experience" on the reconstructed V&T.
"There's a conflict here but it can have a solution," Hadfield said. "If we hire an independent operator and (Tyson) enters into an agreement with the operator and the operator has no problem with it, then there's no issue."
But there would be an ethical issue if Tyson votes on any matter that he could gain from financially.
Michael Rowe, general counsel for the commission, said he has not been asked to render an opinion concerning Tyson's planned business venture and how it relates to his position on the board. Rowe said he will only give an opinion if asked by Tyson or the chairman.
When a conflict of interest arises, the affected commissioner should first seek the advice of the general counsel, according to the commission's conflict-of-interest policy, which it passed Nov. 7. The commission must conform to the advice.
If the commissioner were to disagree with counsel's opinion, the commissioner could then seek an opinion from the State Commission on Ethics. That decision would then govern the conduct of the affected commissioner.
Before it gets to this point, the affected commissioner could declare that he or she has a conflict and abstain from voting or acting on any matter where the conflict exists.
Stacy Jennings, executive direction of the Nevada Commission on Ethics, said she would only release an opinion if the request come from a public official or board.
She said a conflict of interest is "a situation in which a person, such as a public official, an employee or a professional, has a private or personal interest sufficient to appear to influence the objective exercise of his or her official duties."
Nevada Revised Statutes doesn't contain an exact "conflict of interest" definition, but public officials are directed to disclose an interest created by a gift, loan a monetary interest, or a commitment in a private capacity to the interests of others, Jennings said.
-- Contact reporter Becky Bosshart at email@example.com or 881-1212.
why you should care
Officials project that the entire 18-mile tourist rail line from Virginia City to Carson City will be completed in 2009. The railway will operate with a $420,000 steam locomotive purchased this year by the commission.
The reconstructed V&T has been funded by federal and state monies and private contributions. Carson City supervisors recently approved an eighth-cent sales tax increase for the V&T. The tax will raise $15 million of the $34.2 million total construction cost.
Tourism and government officials say the railway will bring a $40 million economic boost during the construction phase, and $18 million annually after the railway is completed, which is $8 million in nongaming revenue and $10 million in gaming revenue.