After almost a year of playing defense the Nevada Northern Railway went on the offense Friday by voting to bring suit against the Ely City council in its role as the Railroad’s board of trustees.
While the details of the suit have not yet been released, indeed as of press time it has not yet been written or filed the suit will specifically name all members of the city council and Ely Mayor Melody Van Camp.
Despite the lack of official information it can be assumed that Ely city councilman Marty Westland long standing grudge against the Northern Nevada rail road should figure prominently in the suit.
Westlund a former employee was fired from the rail road several years ago.
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.
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.
In an interview with the Advocate Westland openly questioned whether some of the expenditures listed in a $72,000 loan Bassett made to the rail road could be justified and should be paid back.
But while the $72,000 loan and an additional $95,000 from Bassett to the NNRR raised a justifiable red flag to the corporations auditors Westland’s troubled history with Bassett and the NNRR management board begs the question if the brouhaha over the audit is real or an excuse for revenge.
“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. “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 NNRR board chairman John Gianolli. “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.
That plan was abandoned Westland said after plans for two coal fired power plants were quashed by environmentalists and Senator Harry Reid.
While admitting that he used the logo of the NNRR, Westland said that he broke no law since the logo was not copyrighted.
“Does he know how much money we had to spend to defend our logo?” Bassett asked. “Thousands of dollars.”
Bassett and other NNRR board members also alleged that Westland’s “bogus company” using the NNRR logo may have contributed to the denial of the NNRR $12 million grant application for upgrades to the northern line that would have made it able to ship ore from area mines to the Union Pacific line at Shafter about ten miles east of Wendover.
“…Once I requested the money all of a sudden my phone calls started being ignored. You don’t think that this statement from Marty’s website had anything to do with do you?” Bassett wrote in an email. “’The Nevada Northern Railway Company is a transportation company dedicated to bringing safe, affordable transportation of nuclear waste to Yucca Mountain.’ From Marty’s bogus Nevada Northern Railway website.”
Perhaps in response to those attacks the city council approved launching a ‘forensic audit’ of the rail road’s books.
However the $10,000 set aside for a forensic audit of the Nevada Northern Rail Road might be a down payment but would in no way cover the total cost, said one of the leading Certified Public accountants of San Francisco Geoffrey Kulik.
“If we were asked to do a forensic audit of a similar sized organization in San Fransisco I would guess the cost would be easy between $35,000 to $45,000 and perhaps double that,” Kulik said. “There is a big difference between a regular audit where you check the books and make sure that the company is running under GAP (General Accounting Practices) and a forensic audit where you are looking for criminal wrong doing like fraud. I don’t know what the cost structure is like in Nevada but it can’t be that much different than California.”