A key board member at the Las Vegas Convention and Visitors Authority called on CEO Rossi Ralenkotter to immediately step down amid growing concerns about misuse of public funds and a police investigation into abuse of airline gift cards bought by the agency.
“In light of the criminal investigation, in light of some of the malfeasance within the organization, it has become more and more apparent that we need a change of leadership,” said North Las Vegas Mayor John Lee, the former chairman of the board’s policy committee. “We need to move past this cloud.”
Lee is the first board member to publicly challenge Ralenkotter’s management. The 14-member board has come under criticism for lax oversight of the taxpayer-funded agency, which has a $251 million annual operating budget.
The convention authority needs new leadership to do a better job of tracking its spending, and the board must strengthen policies to ensure that happens, Lee said.
Ralenkotter, who has been trying to negotiate a retirement agreement with the board, did not respond directly Friday to Lee’s call for him to leave the board now.
“As I announced in the June Board meeting, I am in talks about my retirement as the building blocks of our succession plan are all in place,” Ralenkotter said in a statement. “Until then, I won’t be sharing any details or timing out of respect for my board of directors.”
Lee said a national search should be conducted for Ralenkotter’s successor, because no one at the authority, including newly hired President and COO Steve Hill, has enough experience to take the agency to a higher level.
Lee acknowledged that Ralenkotter has done good things for Las Vegas tourism over the years, but he also said the reports of misconduct during the CEO’s tenure have harmed the authority’s image.
“Right now, I think the perception is that it’s an elite agency that is operating above the law and not being concerned about the taxpayers and the responsibility it has to the state,” Lee said.
Las Vegas police are investigating the mishandling of $90,000 of gift cards the authority secretly bought from Southwest Airlines. Ralenkotter, who has run the agency since 2004, used nearly $17,000 of cards on personal trips, often with his wife. He paid back the money after an audit uncovered the trips.
Lee said he privately confronted Ralenkotter about resigning or retiring roughly three months ago in response to an ongoing Las Vegas Review-Journal investigation into the agency’s spending.
“It was a culmination of the continued drip, drip, drip of misconduct allegations that had taken place that were more than I could continue to bear, and realizing that more were coming,” Lee said.
Ralenkotter said he did not recall that conversation.
The newspaper found lavish convention authority expenses on high-end entertainment, gifts for employees and first-class trips overseas for board members.
Last week the Review-Journal reported that Ralenkotter secretly gave former Las Vegas Mayor Oscar Goodman, the agency’s chief tourism ambassador, a $12,000 raise in 2015 without board approval. Ralenkotter increased Goodman’s salary to $72,000 a year but reduced the length of his contract from two years to one, avoiding a $100,000 threshold that triggers board scrutiny.
Lee said Ralenkotter told him three months ago that he wanted to stay in charge until the expected completion of a $1.4 billion expansion of the Las Vegas Convention Center in 2021.
On June 2, weeks after the airline gift scandal erupted, the Review-Journal reported that Ralenkotter had been discussing retirement with his family and friends and had consulted a lawyer to help him seek a financial package. A close friend told the newspaper that Ralenkotter was looking at life without the convention authority after learning he was free of the cancer he had battled for years.
Days later on June 8, a follow-up report on the audit showed more than $50,000 of the $90,000 of Southwest Airlines gift cards was missing.
The audit also found that an LVCVA executive hid the purchase of the Southwest cards as part of the cost of promotional events with the airline.
The board, which includes elected leaders and casino executives, received the report at a public meeting June 12. At that time, Ralenkotter disclosed that he was talking with board members about retirement but had not set a date to leave. Despite the lingering scandal, board members praised Ralenkotter and applauded him after he presented a long list of accomplishments.
Two weeks later, police showed up at the agency’s offices and obtained records related to the gift card audit.
Board member Bill Noonan, a gaming executive who ordered the audit, later publicly criticized Ralenkotter for his poor judgment in using the cards for himself.
The Review-Journal had requested employee gift and travel records more than a year earlier, but the authority did not provide any records of the airline cards. It maintained that there was no process in place at the time to track who used the cards.
Ralenkotter said Friday that “policies have been ramped up to eliminate any prospect” of staff using airline gift cards again for personal travel.
“Mentions of this issue without noting the corrective actions taken to prevent any re-occurrence, and the auditors’ determination that there was no intent, are misleading and inflammatory,” he said.
In recent weeks, Ralenkotter and his lawyer Terry Coffing have been trying to negotiate a retirement package with the board’s lawyer, Todd Bice. But they have not reached a deal, and Ralenkotter still has not set a retirement date. As part of his package, Ralenkotter has sought a lucrative performance bonus, longevity pay and health insurance, informed sources said. All this would be on top of an annual state pension of at least $350,000.
Bice could not be reached for comment Friday. Coffing declined to comment.
Lee said this week that very few public officials in the state, if any, receive golden parachutes when they leave office and that it would be “immoral” to give Ralenkotter one funded by taxpayers.
The mayor said he decided to speak out because he was frustrated by the constant revelations of wasteful spending at the convention authority and little response from the board.
“I felt like there was some foot-dragging and it was going to keep bothering me,” Lee said. “If I just sit quietly back and say nothing, I’m part of it. I’m complicit in it. When you do nothing, you’re agreeing with what’s going on. I’m not agreeing with what’s going on, and I’m not agreeing that we are moving in the right direction.”
Lee cited his experience in turning around the image of North Las Vegas.
“I’ve been involved in a city with a bad reputation and know how hard it is to change its reputation,” he said. “If this board starts getting a reputation as a cover-up board, it’s going to be a long time before the public is going to trust us again.”
The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson. Las Vegas Sands operates the Sands Expo &Convention Center.