By George Knapp, Channel 8 News, Las Vegas

Nevada tax commissioners Tuesday slammed head first into the veil of secrecy surrounding the Area 51 military base, and commissioners weren’t happy about it.

At least some of the secrecy concerns might have more to do with a sweetheart deal worked out by neighboring Lincoln County rather than national security issues.

You might not think a meeting of the tax commission would produce fireworks, or raise questions about secret deals involving a secret base, but Tuesday’s special meeting of the State Tax Commission was one of a kind.

Area 51 is located primarily in Lincoln County. Under federal law, counties can’t tax federal facilities, including military bases. But for years, the county has received payments from the sometimes non-existent base on behalf of the private contractors who work out there.

Now, a new agreement between Lincoln County and Area 51 has drawn the attention of the state because it includes a pile of dough for a third party who negotiated the deal.

The small towns of Lincoln County are hurting. With only 5,300 residents, the tax base is small, which is why county services barely operate in the black. The largest employer in the county is the classified military base known as Area 51, and by law, the county can’t tax a federal facility.

But it can demand taxes from the for-profit private contractors who operate out there, except, in this case, no one from the county is allowed to set foot on the base to make assessments.

The county relied for years on satellite photos to “guestimate” what taxes it might be owed, and the Air Force has paid on behalf of the contractors, money that has kept Lincoln County afloat, but there has long been a suspicion that the payments were way too low.

“We knew there was more stuff going on out at the area, among ourselves, then we looked into what we can do to raise the taxes because Lincoln County is pretty much broke sir,” Lincoln County Commission Chairman Ed Higbee said.

Higbee and Lincoln County District Attorney Dan Hooge took the point in negotiating a new deal with Area 51, a deal initiated by third party, private consultant Ashley Hall, former Las Vegas city manager.

It was this deal that caught the ire of state tax commissioners, who grilled Lincoln County officials for hours but were repeatedly told it is all hush-hush.

“Why can’t you talk to us and what did you sign?” State Tax Commissioner George Kelesis asked.

“I signed an agreement,” Higbee said.

“With who?” Kelesis asked

“With the people we made a deal with,” Higbee responded.

“We can’t talk about anything out in the area,” DA Hooge said.

Commissioner George Kelesis, who led the grilling, says he thinks it is ‘secrecy of convenience,’ having more to do with the Ashley Hall contract than with national security.

The commission heard from Lincoln County’s treasurer and assessor, both of whom were shunted aside by the special contract which agreed to pay Hall 25 percent of any money he might squeeze out of the Air Force for back taxes.

The Pentagon agreed to pay $1.8 million, a bonanza to a county that is broke, but the county insisted it isn’t tax money, it’s a contract settlement.

By calling it something else, the county doesn’t have to give a piece to the state. What it would do is pay $480,000 to Ashley Hall. Commissioners were not amused by the word games.

“Walks like a duck, looks like a duck, it’s a duck. This is tax. You can call it whatever you want to call it but this is tax and the agreement confirms it is a tax,” Kelesis said.

Representatives from Lincoln County school, fire, and hospital districts told the commission they agree the deal stinks because calling it something other than a tax means their struggling operations would get nothing.

The most heated moments came when commissioners asked how the deal with Ashley Hall was worked out. They said Hall cannot legally operate as a tax assessor since he isn’t certified. And they wondered why Chairman Higbee signed a separate and more lucrative deal with Hall four days after the Air Force agreed to pay the $1.8 million?

“Mr. Higbee, did you vote on this contract?” Kelesis asked.

“Yes,” Higbee said.

“Do you have a relative who works for Mr. Hall?” Kelesis asked.

“I do,” Higbee answered.

Chairman Higbee’s first cousin Vaughn works for Ashley Hall and was instrumental in cutting this deal. State tax officials say they have asked for, but never received copies of the contracts with the Air Force.

They were told Tuesday they can’t even get a list of the private contractors who work at the base because the names are secret.

In the end, the commissioners voted to subpoena all documents, contracts, and emails plus issued subpoenas to Ashley Hall and Vaughn Higbee and tasked the attorney general with contacting the Air Force.