The Northern Nevada Rail Road adopted much stricter oversight after an audit revealed that NNRR director Mark Bassett made questionable loans to the organization he works for.
Bassett was first called on the carpet by the Ely City Council after the yearly audit of the NNRR revealed the director had a $72,000 loan comprised of uncompensated business expenses to the railroad. Later it was revealed that Bassett had also signed for a $95,000 loan to the NNRR to purchase more equipment for the historic rail road.
“I know you must think I am crazy,” Bassett said in an interview with the High Desert Advocate. “But since I came here in 2002 my passion and my wife Joan’s passion has been keeping this rail road afloat and getting it in the best possible shape.”
The Bassetts came to Ely and the NNRR a dozen years ago after running their own business in Elko.
But while owners of small businesses often loan their enterprises money, that is simply not done for public non-profit corporations. In fact it could be construed as a major accounting violation. Coupled with the fact that Joan Bassett is also the rail road’s head bookkeeper the red flag in the audit was also accompanied by bells and whistles.
The audit came to the attention of the Ely City Council which called Bassett on the carpet last December and again in January seeking answers to the audit and broaching the idea that perhaps the City of Ely take over the books of the historic rail road.
Neither Bassett or any member of the NNRR management board were told in advance of the issue until it appeared on the agenda.
“It was pretty much a surprise to all of us,” said NNRR board member Roger Bowers. “You would have thought they would have had the common courtesy to give us an heads up.”
Apprehension was added on Bassett’s part by the presence of Marty Westland on the Ely City Council the same Marty Westland Bassett fired two years ago.
Just before the January council meeting, Bassett responded by calling a meeting of all the NNRR employees and advised them that if the city council took over the organizations books it would spell the end of rail road and they could all be looking for jobs come February.
“I think you can say Mark over reacted,” Bowers said. “But there is a whole lot of bad blood between them. And further clouds the issues.”
In an interview with the Advocate Tuesday Westland openly questioned whether some of the expenditures listed in the $72,000 loan could be justified and should be paid back.
And the city councilman was not alone in his assessment.
“I seriously wondered at first if these were donations by Mark and Joan. I know they do a LOT for the railroad — successfully, with a lot of their own time and resources. When does a gift, of which they have been very generous, become a loan, if not documented?” wrote White Pine County Commissioner Mike Coster on the White Pine Politics facebook page. “If, over the course of 5 or 10 years, I bring in copier paper and coffee to the office, or take out of town visitors to lunch, but never ask my boss for repayment and just save the receipts, would that make for a loan to my company? As I understand it, there is no loan document, no promissory note, and no repayment schedule. What does the Railroad management board have to say about this and where were they over the years this debt was reportedly racked up? Mark and Joan should be protected and the right thing should be done in documenting the debt in the proper way. But, Mark says he and Joan don’t want to be paid back??? Or not yet??? What if they refuse to agree to a amortization/repayment schedule? This is confusing, an I am glad the City Council it working to get this cleared up for all to see.”
While no one is at least publicly defending the loans Bassett made to the NNRR, he is not without supporters primarily because he is a money making machine for the NNRR.
From grants, gifts and donations Bassett’s efforts annually raise around a million dollars a year to the NNRR between 80 to 90 percent of the non-profit’s budget. Under his direction the NNRR also hosts wildly popular special events such as the Polar Express Christmas Train Rides, photo shoots and “Be the Engineer” events where train enthusiasts pay hundreds if not thousands of dollars just to drive an old steam locomotive.
“Rail road people can be a little crazy,” Bowers said. “I know because I am one of them. What Mark has done in networking with other rail road enthusiasts and promoting the NNRR has been nothing short of phenomenal.”
In December alone Ely’s First National Bank offered a challenge grant up to $25,000 to those donating to the railroad. The Challenge Grant lasted from the Dec. 1-31, 2013.
In just 30 days, the Nevada Northern Railway raised a lot more than just the $25,000 to be matched. In fact, the railroad raised a whopping $92,479.70. With the added $25,000 from First National Bank of Ely, the total came to $117,479.70.
“It was a very good Christmas, needless to say,” said Bassett. “We are so appreciative to the response by our local community, as well as our friends throughout the country. We thank John Gianoli, the Gianoli family and First National Bank of Ely for stepping up to the plate and leading by example. I am overwhelmed by the response of so many who gave to us during this time. Not only that, but many of our members even increased their levels of membership, or added an additional donation, to double the power of their gift to the railroad. The response was more than imagined and truly exponential. Again, my hats off and deepest gratitude to all whom helped make this such a special holiday season for us.”
“Look no one is defending the loans,” Bowers said. “They simply were not smart to do. But we have tightened up policy and changed some procedures to keep the house in order. On the other hand if the NNRR was still bleeding money no one would care how much Mark may have lent it.”
But while the rail road board is attempting to right the financial ship the enmity between Bassett and Westland appears to have increased with both men sending out letters and internet missive damning each other.
Whether that will end soon is anyone’s guess.