Bill Walters Developer sought to build homes on land city had designated for golf course George Chanos Attorney general says report "chronicles decade of indifference" by city Click image for enlargement. Richard Goecke Former public works director criticized in report

A state investigation released Friday paints a dark picture of Las Vegas City Hall as a place where employees believe City Council decisions are predetermined and senior staff manipulate or hide information to benefit the powerful.

"This is fair, objective and balanced, and very troubling," Attorney General George Chanos said of the report released by his office. "It chronicles a decade of indifference, incompetence and negligence and/or intentional misconduct in the city of Las Vegas."

The attorney general's office commissioned the investigation after media reports raised questions about a city deal with developer Bill Walters. In 2005, Walters sought permission from Las Vegas to build 1,200 homes on golf-course land Las Vegas had designated as an odor buffer around its wastewater treatment plant.

"It appears that there has been a consistent pattern of political and financial favoritism granted to Mr. Walters' business entities by the City of Las Vegas," stated the report, which was prepared for the attorney general's office by the law firm Senn Meulemans.

Chanos recused himself from the probe because he had a land decision pending before the City Council. He later decided he had no conflict.

The law firm stops short of recommending criminal charges, leaving that decision to local and state officials.

Chanos said Friday the investigation is ongoing, and could lead to criminal charges.

Among the top-level city officials singled out in the report for decisions they made related to Walters' Royal Links Golf Club are: City Manager Doug Selby, former Public Works Director Richard Goecke, former Mayor Jan Jones, and former City Manager Virginia Valentine, who now is Clark County manager.

Selby was unavailable for comment. The other officials defended their decisions, saying their dealings with Walters were done in the best interest of the public based on information they had at the time.

Walters called the report biased and said all his deals with the city have been aboveboard.

But the 169-page report concluded that if the city allows Walters to turn Royal Links into housing, it would violate state law that requires public property and tax dollars be used for the public's benefit.

Mayor Oscar Goodman has promised he will resurrect Walters' proposal once the attorney general's report was complete.

Goodman was in Europe Friday, promoting the 2007 NBA All-Star Game that will be played in Las Vegas, and was unavailable for comment.

INVESTIGATION CONTINUES

Chanos said his office is considering using subpoena powers to get Goecke and Walters to talk.

Neither spoke to the investigative team, which included former Washoe County District Attorney Cal Dunlop.

Goecke, reached at his house on Friday, said he hadn't seen the report. When asked if he had shown favoritism to Walters, he said: "I didn't."

Walters said he was not approached to talk to investigators until Aug. 28.

Investigators said when they approached Walters, he demanded that the law firm provide all the documents that had been obtained and the portion of the report that had been written so far, a request the law firm declined.

"The reference to where we were alleged to be uncooperative, that is absolutely, totally a joke," Walters said. "We were given no opportunity to review any of this stuff that happened eight or ten years ago. I don't think anybody would deem that a fair opportunity to respond to something."

Investigators reviewed 18,000 pages and conducted more than 50 interviews. But they said they were "not certain" they had "received all relevant documents in the possession of the City of Las Vegas. Although [the firm] cannot prove or disprove this, through various witness interviews, it has been implied that [the firm] did not receive all documents sought by the City of Las Vegas document demand."

The city's communications office issued a brief statement Friday, pointing out that it took the attorney general a week to review the report and the city only received it this morning.

"The sheer size of the report requires adequate time for review, as evidenced by the Attorney General's week-long review prior to making the documents public. As a result, the city will reserve comment until the report can be thoroughly assessed," the city statement said.

OFFICIALS SINGLED OUT

In 1997, the city wanted to have a golf course built on land next to its sewage treatment plant to act as a barrier between development and the plant.

Walters won that award when his only competitor dropped out. In 1999, shortly before the course was to open as Royal Links Golf Club, Walters bought the land for $894,000. The deed carried a restriction requiring that it be kept as a golf course.

The report claims Goecke repeatedly attempted to tilt the process in favor of Walters.

Goecke "seemed to place the interests of real estate developer Bill Walters above the interests of the City of Las Vegas and its constituents, in breach of the public purpose doctrine," the report said. "However, the various City Councils, perhaps through lack of adequate information, at times through inadequate briefings, and at times through concealed or misinformation ratified and approved the majority of Mr. Goecke's recommendations."

The public purpose doctrine requires tax money or public property be used to benefit the public.

The report also questions more recent actions by City Manager Doug Selby. These arose after Walters approached the city in 2005 about lifting the deed restriction so he could turn the golf course into a 1,200-home development.

A city-commissioned expert panel report stated that if homes replaced the golf course, the city eventually would have to spend $28 million more for odor controls than if it were left as a golf course. But Selby told the council a different story.

"We're going to make that investment at some point in time anyway," Selby said at the Nov. 2 City Council meeting, the report states.

He later told the council: "I guess I'm just saying as this encroachment occurs, we're facing additional investment with or without this approval in front of us."

The council voted to lift the deed restriction, with Councilwoman Lois Tarkanian casting the sole vote against it. The council reversed its decision in November 2005 as Chanos announced the investigation into the deal.

Selby was at a League of Cities meeting on Friday and did not respond to a request for comment.

Others named in the report include Valentine and Jones.

The report says employees were intimidated by Jones, who they believed wanted Walters to get the golf course.

Jones denied she intimidated employees or showed Walters any favoritism.

In 1999, Valentine was faced with a memo written by Deputy City Attorney Thomas Green, pointing out that if the city sold the Royal Links Golf Club to Walters for $894,000, it would be a bad deal for the city. It said the sales price plus other water rebates can be "viewed as the Walters Group receiving the property free from the city, together with an additional $900,000 in free water."

Green's memo went on to say that the land sale, at that price, probably would violate the public purpose doctrine.

According to the report, Valentine said she believed she briefed the City Council members on the conclusions reached by Green. "In her mind, the City Council 'wanted to do this deal'; she was new as City Manager and she 'didn't want to rock the boat,' " the report states.

Valentine said Friday she was "sure I briefed" council members on Green's memo. But she also pointed out that Green worked for City Attorney Brad Jerbic, who reports directly to the City Council.

"If they thought it was important, they would've mentioned something like that to them," Valentine said. "As for the 'rock the boat' comment, I had no problem recommending denial with things the City Council wanted."

WALTERS' INFLUENCE

The report depicts Walters as someone with wide-ranging influence.

According to Lori Wohletz, who was the city's environmental officer, Public Works Director Charlie Kajkowski could not get any engineering firms to conduct a study on the effects of replacing Royal Links with homes. All of the engineering firms "expressed concerns that if they returned with a negative analysis, they might face legal action by Mr. Walters," said Wohletz, who resigned her job after criticizing Las Vegas' dealings with Walters.

The report also makes numerous references to city staff believing council votes were predetermined. At a meeting with city staff in May 2005 to discuss lifting the deed restriction on the golf course, "Bill Walters kept saying, 'We don't know why we are here. This deal is done,' " the report quoted Office of Business Development employee Julie Quisenberry saying.

"Quisenberry said that, given Walters' comments, she felt like it was pointless to have the meeting," the reports states.

Walters attributes his success to business savvy and good fortune. Goodman has agreed. He told Las Vegas police investigators that Walters, a friend and former client, is a "very smart wily fox."

The report also criticizes the Las Vegas Sun, which investigators point out is owned by the same family that does business with Walters. An analysis by the newspaper concluded the city would get the better end of the deal if Walters were to replace the golf course with homes. Investigators called those conclusions "questionable," "misleading" and points out the "fallacy in the ... analysis."