Questions about political conflicts of interest have surfaced days ahead of a civil trial that experts say could hamstring the state’s top water regulator and cost taxpayers billions of dollars.

The trial over water rights at Coyote Springs, what was once a proposed satellite city northeast of Las Vegas, is the final act of a long saga between Nevada regulators and a developer who hoped to build the community.

The Nevada state engineer’s office, which regulates water rights, determined not enough groundwater exists in the area to build the development, even though the developers owned water rights to support it.

The developer sued the state, asking for compensation for the devaluation of their land.

Late last year, Gov. Joe Lombardo fired State Engineer Adam Sullivan and later tapped Joe Cacioppo, who was the principal engineer of one of Nevada’s top water rights firms, Resource Concepts Inc. The firm’s client list includes the developers seeking to establish Coyote Springs.

The governor has ties to the developers’ legal representation, too.

Mark Hutchison, who took over as lead attorney for the developer in October, chaired Gov. Joe Lombardo’s election campaign in 2022. Between 2014 and 2019, Hutchison served as lieutenant governor.

Hutchison’s political action committees have contributed millions to Lombardo’s campaign efforts, according to filings from the Nevada secretary of state’s office.

One particular ethics rule may have applications.

Scott Cummings, a legal ethics professor at the University of California, Los Angeles, pointed to a provision in conduct rules that could have applications with Hutchison’s representation of the developer.

According to the State Bar of Nevada’s Rules of Professional Conduct, lawyers who were public officials or employees cannot represent a client in any matter in which they “participated personally or substantially.”

“You don’t want to incentivize government officials essentially to appropriate or misappropriate proprietary government information, and then go utilize it in private representation that would then be able to benefit from your inside knowledge,” Cummings said.

The Nevada state engineer is an independent regulator and scientific expert who generally does not confer with others in the executive branch before making decisions, though the governor does have the authority to hire or fire them.

At minimum, Cummings said it raises questions about government ethics rather than legality.

“He’s raised a lot of money for the current governor, who he’s now effectively suing,” Cummings said. “The governor could be beholden to him in some way.”

Hutchison wrote in an email that the rule does not apply as he did not deal with the subject matter of the case.

“The standard is whether I ‘participated personally and substantially as a public officer’ in this matter,” Hutchison wrote. “I had zero participation.”

In an interview, Hutchison said he remains an enthusiastic supporter of Lombardo’s reelection campaign. However, he maintains that Lombardo has not weighed in on the Coyote Springs case. A spokesperson for the governor’s campaign did not respond to a request for comment regarding the case or Hutchison’s involvement.

“I am involved in his campaign,” Hutchison said. “I’m going to do what I can to ensure that he gets reelected, so that Nevada continues on the positive course that he has set for us over the last three years.”

A page on the Resource Concepts Inc. website describes the firm's work to establish Coyote Springs’ compliance with the Endangered Species Act and the Clean Water Act.

Some advocates worry Cacioppo’s prior affiliations with industry clients are indicative of what could be a less aggressive approach to administering water rights across the state.

Patrick Donnelly, Great Basin director at the nonprofit Center for Biological Diversity, called Cacioppo “a walking conflict of interest” and said his former firm’s client list is a “who’s who of extractive industry.”

That fact alone should be disqualifying, Donnelly said.

“The state engineer’s office needs to be an impartial arbiter of the state’s water law,” Donnelly said. “Instead, you’ve got someone who, for their entire career, was advocating for one side of the water law.”

In response to questions about Cacioppo’s affiliation with the firm and whether it constitutes a conflict of interest, Nevada Department of Conservation and Natural Resources spokesperson Jenny Jackson wrote that Cacioppo is now entirely focused on his role as state engineer.

“Mr. Cacioppo no longer has any ties to his former employer, Resource Concepts, Inc. (RCI), and he isn’t involved with the firm or any of its clients,” Jackson wrote.

Hutchison said the Coyote Springs developers do not recall personally working with Cacioppo but confirmed they continue to use the firm’s services.

Cacioppo may have a different approach overall to administering the state’s water rights.

Sullivan, Cacioppo’s predecessor, was considering using curtailment, or the forced cutting of junior water rights, in the Humboldt River Basin — something that Cacioppo has no intention of pursuing, he told lawmakers at an interim committee hearing last month. Regulators have never successfully implemented a curtailment order in the state’s history.

Cacioppo added that he feels residents know localized water availability “better than anybody.”

“I’m not comfortable curtailing everybody,” Cacioppo said. “Sometimes it has to happen, but you don’t want to get there. You want to find solutions before you get there.”

Lombardo’s office did not reply to a request for comment about Cacioppo’s hiring, his ties to the Coyote Springs developers or the decision to remove Sullivan from office.

Donnelly criticized Cacioppo’s comments, arguing that local residents do not know their basins better than state regulators. If that were the case, water rights in Nevada’s basins would match how much water is actually available, he said.

“The state engineer’s office needs to be an impartial arbiter of the state’s water law,” Donnelly said. “Instead, you’ve got someone who, for their entire career, was advocating for one side of the water law.”

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