The unprecedented criminal case against former Las Vegas Convention and Visitors Authority CEO Rossi Ralenkotter and other executives is the result of failed oversight by the tax-funded agency’s board, legal experts say.
Prosecutors filed felony charges last Monday against Ralenkotter, 72, and two other top former executives in the alleged theft and misuse of $90,000 in Southwest Airlines gift cards bought by the tourism agency. A Southwest marketing employee also was charged.
The seven-count complaint came after a yearlong investigation of the LVCVA that police said was prompted by Review-Journal stories disclosing audit results of the secretive gift card purchases. For the past three years, the newspaper has been investigating excessive spending and lax accountability of gifts to staffers and board members at the LVCVA, most of which occurred during Ralenkotter’s tenure.
“The board could have acted years ago, and everyone’s reputation would have been intact,” said Thomas Pitaro, a longtime criminal defense lawyer and former adjunct UNLV law professor. “But they abdicated their responsibility. It’s a sad day in the community when someone who is highly regarded has to appear as a criminal defendant.”
Lisa Rasmussen, another veteran defense attorney not involved in the case, added: “I don’t understand what the board was thinking. The board shares responsibility in this because they have not been acting on the information as they received it.”
Robert Langford, who ran for Clark County district attorney last year, agreed.
“As a board member in this case, you’re responsible to the taxpayers,” he said. “If you aren’t properly managing people working for you, it sends a message that you don’t care about the taxpayers.”
LVCVA Board Chairman Larry Brown took offense at the lawyers’ comments.
“I think that’s ignorance,” said Brown, a Clark County commissioner. “When the issue of the cards came to the attention of the board, we hired outside counsel, we did an audit, we got the facts as best we could, and that led to the separation agreement with Mr. Ralenkotter and his early retirement.
“For these attorneys to play Monday morning quarterback and criticize board members in this community that have dedicated their time and resources to the authority, that’s unacceptable.”
Late Friday, Brown revealed that the LVCVA had terminated Ralenkotter’s $15,000-a-month consulting contract with the agency in the wake of the criminal charges against him. The contract, which stretched over 18 months, was set to expire in March 2020.
Earlier last week, Brown said that both the board and the convention authority have done a lot to tighten controls at the agency.
“I would focus more on what this authority and the current board has done over the last 18 months to increase transparency, to have more accountability, to look hard at the policies that guide our employees and our board, and I think we’ve moved quite a long way,” Brown said.
Ralenkotter’s successor as CEO, Steve Hill, has worked to change the LVCVA’s free-spending culture under Ralenkotter and has replaced a large share of his executive team.
After prosecutors filed criminal charges on Monday, Hill issued a statement echoing Brown’s words.
“When the LVCVA became aware of the issues that led to today’s charges, the organization took appropriate steps to institute reform,” Hill said. “Those steps included reviewing and strengthening policies and clarifying expectations with our current ambassadors (employees).”
The convention authority’s 14-member board is supposed to keep watch over an agency that has a $251 million annual operating budget to attract tourists and conventions to Las Vegas. The board includes elected officials who benefit personally from the perk-rich assignment and casino executives whose companies profit from the millions of dollars spent each year marketing Las Vegas.
Until his early retirement under the weight of the gift card scandal in August 2018, Ralenkotter was regarded as one of the most powerful public officials in Nevada, earning nearly $1 million a year in salary and benefits. He was considered untouchable in political circles because of his binding connections to tourism, the state’s most important business.
Ralenkotter was so influential that the board voted to approve his $455,000 retirement package, which included the consulting contract, knowing that he was still under investigation by police over the mishandling of the Southwest Airlines gift cards. Ralenkotter had used nearly $17,000 in cards on personal travel. He paid back the agency and apologized for his conduct months before he stepped down three years ahead of schedule.
Ralenkotter drew nothing but praise from board members last year as they presented him with the financial package on top of the nearly $300,000 in public retirement benefits he now receives.
Even after Ralenkotter was charged with theft and misconduct of a public officer in Justice Court, key board members continued to praise him.
Las Vegas Mayor Carolyn Goodman called him the “quintessential ambassador for Las Vegas” and said she hoped the legal system would “produce the truth.” Her husband, former Mayor Oscar Goodman, gets $72,000 a year to chair the LVCVA’s host committee. Ralenkotter pushed for the contract.
Legal fight coming
Ralenkotter faces a maximum of 14 years in prison and $15,000 fine if convicted in the criminal case.
He has consistently denied criminal wrongdoing, and his lawyer, Anthony Sgro, is a veteran of many high-profile cases known for aggressively defending his clients.
“We missed the day it was announced that the Review-Journal was deputized as law enforcement officers,” Sgro said in a statement Friday. “Apparently, there is no limit as to what Mr. Ralenkotter’s false accusers are prepared to do so that they can execute their personal agendas.
“What those persons fail to realize, though, is that Mr. Ralenkotter and his legal team are unrelenting. They further fail to realize that the path for someone who is actually innocent is much easier than the path for those that seek to orchestrate and manipulate information to accomplish personal financial objectives.”
Defense attorney Todd Leventhal, who is not involved in the case, praised police and prosecutors for “standing up to somebody who thinks he has unfettered control over public money.”
“If the charges hold up in court, I think it sends a message that people are watching and nobody should be above the law,” Leventhal said.
Pitaro said the politically sensitive criminal case needs to go through the normal court process.
“It has to be aired out,” he said. “I think the community wants to know what happened because the convention authority is the face of Las Vegas. It represents Las Vegas throughout the world. We have to make sure this doesn’t tarnish our reputation internationally.”
Rasmussen said the criminal case reaches beyond the mishandling of $90,000 in Southwest Airlines gift cards at the LVCVA.
“It’s the overall picture of using convention and visitors authority resources for personal benefit,” she said. “It evidences a much broader and higher level of corruption, graft and abuse of taxpayer funds.
“I’m hoping the prosecution will shed light on how this was able to occur for years and years without anybody stopping it.”
The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson. Las Vegas Sands Corp. operates the Sands Expo and Convention Center, which competes with the LVCVA-operated Las Vegas Convention Center.