The Ely City Council and the Nevada Northern Railroad board are headed for a collision that could end in the courts or possibly the ballot box.
This week in a heated meeting the council voted to remove Chairman John Gianoli and the Vice-Chairman Steve Leith of the Management Board. The removals are just the latest shots in a power struggle between the council and the board over the management of the Rail Road.
The specific reason for the removal of the long serving chairman and vice chair was the board’s failure to answer question about the group’s finances particularly a deal between the railroad and a railroad stock company to store cars on the organizations track.
“The White Pine Historical Railroad Foundation Management Board has tried to be both proactive and continually responsive to all requests from the City Council, so we were surprised by the Council’s actions to remove the Chairman and the Vice-Chairman of the Management Board.” wrote Railroad attorney Scott Husband in a press release. “The Management Board’s sole focus remains on preserving the viability of the Nevada Northern Railway as a historical treasure. Since 1987, the railroad has generated over $68,000,000 in needed revenue for the businesses and citizens of the City of Ely and White Pine County. We appreciate the continued support of our community and the members of the railroad.”
The board’s reaction may not however be limited to surprise. On its next agenda the board will first appoint two new members and then take on the question of whether to sue the Ely City Council. According to sources that vote is almost a forgone conclusion the Railroad will vote yes.
The Ely City council is currently involved in what can be described as a power struggle with the NNRR.
The struggle began over irregularities in the NNRR audit and the council has run what critics call a full court press for more extended over sight of the Nevada Northern Rail Road operations.
According to both sides last year’s audit of the NNRR revealed a $72,000 loan by NNRR director Mark Bassett to the NNRR comprised of uncompensated business expenses to the railroad.
While it is against general accounting practices for an employee of a company to “loan” money to the same company NNRR supporters claim that the so called red flag raised in the audit is but an excuse in a long grudge match against Bassett and Ely city councilman Marty Westland.
To back their up allegations Bassett and board members released a long list of Westland actions both before and after he was elected to the city council in 2011 where he inserted himself into NNRR operations including setting up a rival corporation, using the NNRR logo, writing up unfounded safety violations, and interfering in a grant application that may have cost the rail road over $10 million.
“I think it is odd that no one said anything about the previous year’s audit that had some of the same issues,” Bassett said at the time. “It was only after the last election where Marty got some of his cronies elected to the council that it comes up.”
In the last city election the self described reform movement took the majority on the Ely City Council.
“During the election they complained that the so called Good Ol’ Boy network was using the city council to pursue personal vendettas,” said now former NNRR board chairman John Gianoli. “Now they are doing it.”
While admitting that he had indeed set up a corporation in 2008 that would seem to be in competition with the NNRR, Westland said that now defunct enterprise existed only to run the northern non-historical part of the rail road.
While some in Ely were almost gleeful that the city council had moved from Bassett an employee albeit a very important employee to attack board members Gianoli and Leith others expressed not a small amount of trepidation.
Both men are highly respected and very powerful life long residents of Ely whose reputations are virtually above reproach.
While their support of Bassett is strong and perhaps considered a mater of honor by attacking that honor the reformers on the city council may have raised this confrontation to a whole new level.
