Mustang Ranch

[snopes]

Comment: Someone emailed me the following:

Back in 1990, the Government seized the Mustang Ranch brothel in Nevada
for tax evasion and, as required by law, tried to run it.

They failed and it closed.

Now, we are trusting the economy of our country and a 700 Billion Dollar
bailout to a pack of nit-wits who couldn't make money running a cat house
and selling booze.

Now if that doesn't make you nervous, what does?

I searched your site for "brothel" and "Mustang Ranch" but could find no
mention of this email. My question is was the govt required by law to run
a brothel? Seems strange to me.

[Keeper of the Mad Bunnies]

Seized it, yes. Ran it, no.

Here is a nice run down from the Los Angeles Times:

Hoping to save the wild Mustang – Ranch, that is (2003)

The IRS seized and sold it. The new owners were caught funnelling the proceeds to the original owner. The IRS seized it again and turned it over to the BLM. The BLM wants to knock down the buildings and leave the land undeveloped.

It appears the BLM sold the property instead.

Here seems to be one of the sources for the OP:

Infamous Mustang Ranch brothel revived (2007)

By 1990, the IRS had seized the ranch, putting the federal government in the unique position of running a brothel.

The government failed and the ranch was padlocked for the first time. The IRS auctioned off beds, the bidets -- even the room numbers -- to recover some of Conforte's tax debt.

[diddy]

We should point out that (supposing the OP is true) - an obligation to run something (like a brothel) doesn't have jack to do with the economy at large. The instability of business makes the failure of one business a non issue.

But lets play devils advocate and say that the OP was true. OK, the government owns a brothel - exactly whose to say that they ran it into the ground deliberately to discourage other brothels from popping up? Why keep it around when they could sell it off? Whose to say that the government neglected a business that they cared little about? Million of different possible explanations not even related to the economy at large.