Guest Opinion

Blockchains LLC’s “Innovation Zones”

Jim Hartman

Jim Hartman Courtesy Photo

 

In his State of the State speech, Governor Steve Sisolak promoted an “Innovation Zones” proposal advanced by cryptocurrency Blockchains LLC founder and CEO, Jeffrey Berns.

Berns proposes Nevada allow companies like Blockchains to form local governments on land they own granting them power over everything—from schools to law enforcement.

Blockchains’ technology is a digital ledger known primarily for recording cryptocurrency transactions, “stablecoin”. It can be used in business dealings , personal finances and in local government record-keeping.

Berns’ company already owns more than 67,000 acres of land in rural Storey County east of Reno at the Tahoe-Reno Industrial Center. He envisions developing “Painted Rock Smart City” over a 75-year period , which would include an estimated 36,000 permanent residents.

People in this “smart city” would not only purchase goods and services with “stablecoin”, but also have their entire online record-- financial, medical and personal data—on blockchain.

Berns wants to break ground by 2022 and proposes to build 15,000 homes and 33 million square feet of commercial and industrial space. While details are sketchy, the “Innovation Zones” proposal re-imagines a futuristic “company town”.

Blockchains’ proposal would radically change Nevada law to allow these “Innovation Zones”.

Qualifying companies would be granted powers typically associated with those of county government-- including creating court systems, schools, imposing taxes and building infrastructure while also making land and water management decisions—functioning as a county-within-a-county.

If the legislature supports their preliminary draft proposal, technology companies with 50,000 acres of land that promise making a $1 billion investment could create zones governed by three people with authority like county commissioners. The bill draft provides two of them would initially be from the company itself.

All the qualifying provisions in the current plan apply exclusively to Blockchains LLC.

While some voice skepticism , Governor Sisolak made the “Innovation Zones” a key part of his State of the State address for plans to build a more diversified Nevada economy.

Sisolak said the proposal would transform Nevada into “the epicenter of this emerging industry and create the high-paying jobs and revenue that go with it.”

While Blockchains’ proposal may seem far-fetched , Jeffrey Berns isn’t unknown to Governor Sisolak. He’s been making sizable political contributions since 2018.

Blockchains LLC made a $10,000 maximum contribution to Sisolak in 2018, and an additional $50,000 to his political action committee that year. In 2019, Berns also contributed $50,000 to the Nevada State Democratic Party.

His political contributions continued into the 2020 election. Berns made a maximum $10,000 direct contribution to Democratic state Treasurer Zach Conine, and Conine’s PAC received a $60,000 contribution from Berns.

State Treasurer Conine has been an important player in Sisolak’s economic development legislative agenda. Berns himself made contributions totaling $34,500 to 11 legislative leaders, primarily to Democrats.

In addition, he made a $10,000 maximum contribution to Republican Assemblyman Jim Wheeler (R-Minden) in 2020. Wheeler also received a $10,000 contribution from Mary Berns, wife of Jeff Berns. Wheeler’s district includes the potential future site of the Blockchains “Innovation Zone”.

While taking no official position, the Nevada Republican Party on social media has criticized the proposal as “Sisolak’s new plan to allow Big Tech to create their own government in Nevada.”

The Nevada Independent has disclosed donations totaling $410,240 to their nonprofit news source-- Blockchains LLC contributing $35,000 and Jeff Berns $375,240.

As former Clark County Commission chair, Sisolak raised $11.3 million in 2018, more money than any candidate for governor in Nevada history.

In 2018, the newly-minted Nevada commercial marijuana industry concentrated on electing Sisolak as governor, contributing more than $723,000 to him. Sisolak has the central role in Nevada marijuana regulation , including appointing regulators.

Jeff Berns, his wife Mary and brother David, have already made promiscuous donations focused on Sisolak and allies to promote their self-serving “Innovation Zone” vision. Nevadans should “follow the money” trail for additional Blockchains contributions in 2021-22 — and what it wins them.


Jim Hartman is an attorney residing in Genoa. E-mail: lawdocman1@aol.com


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