Like a slow train the ‘forensic audit’ of the Ely rail road is coming around the bend and should be made public by early March but just what will be released is anyone’s guess.
“ A successful audit will inform us of mismanagement, unwise spending ,exact debt, future income abilities. It may not and hopefully not lead to any arrest nor was I expecting illegal activities. The audit will lead to change in operating procedures and expenditures according to what may or may not be needed,” wrote Ely city Councilman Bruce Setterstrom on a White Pine Cunty Facebook page.
Setterstrom was part of a ad hoc raiding party made up of fellow councilman Martywestlund and White Pine County Commissioner Mike Coster that targeted the rail road offices looking for incriminating evidence of something last September.
Earlier that month the Northern Nevada Rail Road board petitioned senior Nevada Judge Bob Rose to intervene and reverse the removal of its chairman Ely Banker John Gianoli and Stephen Leith from the board.
Shortly after that suit was filed the railroad’s offices were raided and the railroad’s financial records were copied and downloaded to a portable device for the city’s contracted forensic auditor.
In addition to the raid the Ely City Council continues its efforts to replace all other long serving Management Board members with those of its own.
But as the battle for control of the railroad continues in city hall and now the courts many in Ely are wondering if there will be anything left of railroad to be claimed as a prize of war.
“For 30 years people not only in Ely but all of White Pine County and all of rural Nevada have donated their time and their money to improve the railroad to make it an international tourist attraction,” said one area businessman. “If that forensic auditor does not find a smoking gun proving out and out criminal fraud the city council has a whole lot of explaining to do.”
So far audits of the railroad have found far from stealing from the railroad, its employees particularly Executive Director Mark Bassett have lent the organization money when they should not have.
In fact it was those improper loans to the railroad the council first used as its reason to assert its control over the railroad and ‘clean house’.
What is troubling may Ely residents is that after the “cleaning” there might not be much of a house left.
For 30 years since the railroad was created and about half that time under the direction of Bassett, the Nevada Northern Railway has built an international web of supporters both in government and from private corporations and individuals. That support whether in the form of governmental grants, private donations or out right gifts turned what was once a nice collection of obsolete engines and cars into one of the few operating historic railroads in the world and a significant money maker for Ely. Without that on going support many locals fear the Nevada Northern could easily revert to a quaint pile of junk.
That could happen especially if the council not only replaces the entire board and if the new board fires Basset.
“You are talking about years if not decades of carefully cultivated relationships being destroyed in one fell swoop,” said one current director. “Who on the new board will know who to talk to the next time a grant request comes along or an endowment is up for renewal? People like to know who they are dealing with and it is not like there is a shortage of good causes to donate to.”
In the worse case scenario that criminal fraud is found in the forensic audit, funding to the railroad would dry up immediately. However even if nothing serious is found the bitter relationship between the city council and the railroad could give many previously generous donors reason to look elsewhere to give their money.
“My opinion is a successful audit would inform us of NO mismanagement, unwise spending, WOULD show us any debt or assets, and future income abilities. I don’t know why anyone would WANT to find anything wrong other than maybe a disgruntled employee,” wrote former City Councilman Brett North
NNRR Board members and Bassett have long accused the Ely City Council and most particularly Westland of using the audit issues to get back at the organization and Bassett, the man who fired Westland several years ago.
In the last city election the self described reform movement took the majority on the Ely City council. What is striking about the reform movement was that very few if any of its candidates lived in Ely for more than 10 years if that.
“That the real shame of it all,” said one long time Ely resident. “These new guys come into town raise hell, break everything and then leave and we who have lived here all our lives have to pick up the pieces.”
With the Ely elections set again for this June just what the audit says and how it is interpreted could be a factor on the ballot.