Clark County commissioners are expected to hire outside auditors next month to conduct an extensive review into how the county handled a complaint about remodeling work that was completed at the Rio without permits or inspections.
Investigators hope to determine why the county initially dismissed concerns about the lack of permits in August 2006. Six months later, the county sent an inspector to review the work at the Rio's Ipanema tower. The case was closed that same day.
Whistle-blower Fred Frazzetta contacted Clark County Manager Virginia Valentine in the summer, prompting Valentine to begin discussions into reopening the investigation.
But it wasn't until the Review-Journal began asking questions about the lack of permits and subsequent inspection that the county formally reopened the case in late September. Inspectors discovered code violations at the Rio and Harrah's Las Vegas, where remodeling work also was done.
As a result of that inspection, Harrah's Entertainment, owner of the two properties, took out of service 140 guest rooms at the Rio and more than 500 at Harrah's.
"Maybe we didn't have all of the information that was later disclosed in the newspaper," said Jeremiah Carroll, director of the county's own auditing division. "I don't know if that's true or not; that's what we have to go back and take a look at."
Clark County Commission Chairman Rory Reid called for an independent evaluation into the handling of the complaint earlier this month. Carroll has reached out to several auditors and will present proposals to the commission during its Nov. 6 meeting.
Carroll said the county opted to hire an outside auditor to eliminate the perception that the county might try to hide its findings. He said the companies submitting bids specialize in construction and his office does not.
"They have a certain expertise in construction auditing, and they're familiar with best practices around the country," Carroll said. "They can do it a lot faster."
Las Vegas police were not brought in because of the dual missions that must be accomplished: The Police Department does not have the expertise in construction, nor could police provide recommendations to improve the inspection process, Carroll said.
The auditors will interview county officials as well as construction crew members who worked on the remodeling projects, Carroll said. They will talk with Frazzetta, the whistle-blower who approached the Review-Journal, and Richard Maddox, the supervising building inspector who visited the property in February.
After his inspection, Maddox wrote a four-paragraph report that said he examined 37 guest rooms at the Rio, but he did not note the room numbers, which floor they were on or who selected the rooms to inspect.
"That doesn't mean he can't go out with our investigators and take a look at those places again so we can see what he looked at," Carroll said.
The auditor will review laws that limit the county's ability to inspect private property. Once a property is completed and open to the public, the county must show probable cause to receive permission from the courts to enter the property and conduct inspections.
The probable cause requirement keeps the county from inspecting complaints that lack detail.
"Once we get information, we treat everything as being credible," said Assistant County Manager Phil Rosenquist. "But we can't just get a complaint that there might be code violations and start ripping out all the walls."
Carroll said he hopes to learn exactly how much information the county had after the initial complaint.
"Did we have the information to have probable cause or not? That's what we need to get to the bottom of," Carroll said. "At what point do you start a formal investigation. Hopefully this doesn't happen again, but you should always be prepared."
The county has assigned inspectors to the Rio and Harrah's to begin opening up walls to determine whether code violations exist and whether the remodeling work matched plans. Simultaneously the county is issuing remodeling permits to allow Harrah's to begin correcting the work.
It is unclear how long guest rooms at Harrah's and the Rio will be closed.
Rosenquist said the extent of any violations has not been determined in all of the rooms.
Rosenquist said despite the troubles, the Harrah's properties should not raise concerns about the safety of hotels in Las Vegas. Building officials do everything in their power to ensure the safety of guests.
"We know that when these buildings are built, they go through the inspection process and we know those buildings meet code," he said.