HUGH HEWITT MAKES A BOLD PREDICTION: “The high water mark for the 2006 Democrats was a week ago.”

UPDATE: Hmm, well, this story helps his case:

Senate Democratic Leader Harry Reid collected a $1.1 million windfall on a Las Vegas land sale even though he hadn’t personally owned the property for three years, property deeds show.

In the process, Reid did not disclose to Congress an earlier sale in which he transferred his land to a company created by a friend and took a financial stake in that company, according to records and interviews.

The Nevada Democrat’s deal was engineered by Jay Brown, a longtime friend and former casino lawyer whose name surfaced in a major political bribery trial this summer and in other prior organized crime investigations. . . . Reid hung up the phone when questioned about the deal during an AP interview last week.

Read the whole thing. With Republicans, it’s sex. With Democrats, it’s money.

ANOTHER UPDATE: Reader Anthony Calabrese thinks there’s probably less here than the AP story suggests:

I am a long time reader — also a tax lawyer. While my practice does not involve real estate investments, I think it may be much ado about nothing. Generally, if you transfer property to a company in return for an interest in the company, there is no federal income tax on the transfer. If the company was an LLC (as stated in the media reports), the company was probably a partnership for tax purposes. There would be no LLC level tax as profits and losses would pass through to the partners.

So I can see no real tax issue. The only issue is that Reid might have been hiding his ownership of the property, but holding investment property in an LLC is fairly common in order to protect the owners from torts or bankruptcy. I think this is simply an issue of someone forgetting to file a form.

Well, we’ll see. In an election year already marked by Republican scandal, I’m sure the press will want to be evenhanded about looking into potential Democratic improprieties.

But reader C.J. Burch disagrees:

Had Dennis Hastert hung up on a reporter CNN would have provided round the clock coverage with analysis by Carville and Begala for three days. I wonder how they’ll treat this?

Stay tuned.

MORE: More thoughts on Reid’s land deal:

It looks like Brown did all the work and cut his friend Reid in on the deal. The AP report contains no evidence that there was anything crooked about the transactions themselves, although they apparently were never documented. Basically, the partners bought land that was zoned for residential use, and persuaded local authorities to change the zoning to commercial, then sold out to developers who put up a shopping center. Brown obtained the re-zoning in part by emphasizing Reid’s participation in the deal.

Is there anything wrong with this? Not necessarily. You can make easy money by buying land on the outskirts of a fast-growing town like Las Vegas. It helps if you have the influence to get zoning changed, but, to be fair, there’s nothing wrong with re-zoning land to permit commercial development as a community grows outward.

It does appear, though, that Reid clearly violated Senate ethics rules by failing to disclose the existence of the LLC and his partnership with Brown. He reported the income, but not the relationship. I suspect the reason for Reid’s reticence is explained by the AP’s description of his friend’s history.

That seems right, but we shouldn’t jump to conclusions based on a single wire story. No doubt we’ll learn more in coming days.