The heat cranked up in Nebraska's Republican Senate race as State Treasurer Don Stenberg accused Attorney General Jon Bruning of a "reckless disregard" for conflicts of interest.
Stenberg leveled the charges after a World-Herald story this weekend disclosed that Bruning had purchased a lakefront house with two Nelnet executives a year after attempting to waive a $1 million settlement fee on the Lincoln-based student-loan company.
Stenberg, Nebraska's attorney general before Bruning, questioned whether the lake house was a "reward" for settling Nelnet's issues with the state.
Bruning has denied any wrongdoing, saying the Nelnet executives are his personal friends, and that he and they split the $675,000 cost of the lake house three ways. He said all three were looking for a place at Big Sandy Lake north of Ashland, Neb., when they entered a time-share arrangement.
Trent Fellers, Bruning's campaign manager, said he expected "slimy, personal attacks" from Democrats, but expressed "disappointment" in Stenberg for questioning a fellow Republican's integrity. Another candidate for the GOP nomination, State Sen. Deb Fischer of Valentine, declined to comment on the Bruning brouhaha.
Fellers said Bruning's integrity is unquestioned, and that "he has always acted in the best interest of Nebraska."
Bruning and Stenberg are considered front-runners in a five-way race for the state's Republican Senate nomination.
They share a knowledge of Bruning's office. Stenberg served three terms as Nebraska's attorney general starting in 1991. Bruning succeeded him in 2003 after Stenberg decided against another run.
The two now want the same seat — the one currently held by U.S. Sen. Ben Nelson, a Democrat, who has yet to decide whether he will seek a third term.
Stenberg also stepped beyond his critique of the lake house purchase, criticizing Bruning for amassing a considerable business portfolio since becoming attorney general.
Bruning has acquired more than $12 million in assets by investing primarily in banks, storage facilities and retirement homes, according to federal financial reports. Many of his investments were made with old college and fraternity friends from the University of Nebraska-Lincoln.
Stenberg said he sold nearly all of his stock while attorney general to avoid any appearance of a conflict of interest. The only stock he and his wife, Sue, retained was stock in her family's hybrid seed company.
As attorney general, Stenberg said he never knew when a person or a company would get entangled with the law.
"I did not have partners in any investments while I was the attorney general. I did not become, or try to become, a multimillionaire while serving as Nebraska's attorney general," he said. "While I went to great lengths to avoid conflicts of interest, Jon Bruning seems to invite them."
Bruning has said he made much of his startup money investing in the early 1990s stock market.
There are rules of conduct governing lawyers and how they must handle potential "conflicts of interest," said Patrick Borchers, a Creighton University law professor. But the rules appear to leave it to individual lawyers to determine whether a friendship is strong enough to pose a conflict, Borchers said.
However, the lake house situation means Bruning likely would have to recuse himself and his office from any potential case involving Nelnet, Borchers said.
As for whether Bruning should have recused himself from previous Nelnet dealings, Borchers said that depends on the closeness of Bruning's friendships with the Nelnet executives.
In 2007, Bruning waived a $1 million settlement with Nelnet. Bruning backed down after being accused of showing favoritism to the company. Executives had donated $16,000 to his campaign.
Bruning said he has long been friends with two top Nelnet executives — President Jeff Noordhoek and Chief Financial Officer Terry Heimes — but that they became closer after the settlement.
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