95°F
weather icon Clear

Ex-LVCVA boss Ralenkotter, 3 others face felony charges over gift cards

Updated September 10, 2019 - 12:21 am

Prosecutors filed felony charges Monday against retired Las Vegas Convention and Visitors Authority CEO Rossi Ralenkotter 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.

The seven-count complaint, which also charges a Southwest employee, comes after a yearlong investigation of the LVCVA that police said was prompted by Review-Journal stories disclosing the secretive gift card purchases. 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.

Ralenkotter, 72, once one of the most influential public officials in the state, was charged with theft and misconduct of a public officer. He did not respond to a request for comment but has previously denied criminal wrongdoing.

His former chief marketing officer, Cathy Tull, 52, also faces charges of theft and misconduct of a public officer. Her lawyer could not be reached for comment.

Brig Lawson, the tax-funded agency’s former business partnerships director, was charged with theft, forgery and unlawful use of public money.

Police allege that Lawson instructed Southwest employees to hide the gift card purchases in promotional invoices between 2012 and 2017. During that time, the LVCVA spent $200,000 a year on promotions building its relationship with Southwest, the busiest commercial carrier in Las Vegas, agency records show.

Lawson’s lawyer, Chris Oram, said late Monday, “We’re going to defend him vigorously.”

Eric Woodson, 54, a Dallas-based Southwest Airlines marketing executive, was charged in the complaint with theft and forgery.

His Las Vegas attorney, Pete Christiansen, declined to comment, saying he had not seen the complaint. Southwest Airlines spokesman Dan Landson also would not comment.

Lawson, 49, handed out thousands of dollars in cards to Ralenkotter and other convention authority staffers for their personal use, the complaint alleges.

Ralenkotter, who now earns $15,000 a month as a consultant for the LVCVA, used roughly $16,000 in cards on personal travel, and Tull, 52, bought airline tickets for herself and family members with $6,000 in gift cards, police and LVCVA records show. Both executives reimbursed the agency, and Tull agreed to pay $8,700 in fines for violating the state ethics law. Ralenkotter is still facing an ethics investigation.

The LVCVA can terminate Ralenkotter’s 18-month consulting contract, which expires on March 31, 2020, “for any reason,” according to the agreement. LVCVA records obtained in May showed that Ralenkotter continued a pattern of luxury traveling at taxpayer expense as a consultant while providing little written justification of his work. He has been receiving a nearly $300,000 annual state pension since his retirement.

North Las Vegas Mayor John Lee, who left the LVCVA board this year, said the agency should cancel Ralenkotter’s contract.

“He’s got a situation like that hanging over his head. He’s not going to spend much time working for the LVCVA,” Lee said. “He’s more interested to figure out how he defends himself. I don’t know how he can do both of these.”

Steve Hill succeeded Ralenkotter as CEO, replacing key executives and reforming the agency’s travel and spending policies.

“When the LVCVA became aware of the issues that led to today’s charges, the organization took appropriate steps to institute reform,” Hill said in a statement late Monday. “Those steps included reviewing and strengthening policies and clarifying expectations with our current ambassadors. We are grateful to our ambassadors for embracing and implementing the needed changes and for remaining focused and committed to continuing their great work on behalf of the destination.”

Clark County Commissioner Larry Brown, who chairs the LVCVA board, declined to comment late Monday.

“We have a board meeting tomorrow,” he said. “Let me follow the news break, and I’ll talk to you after the meeting.”

Las Vegas Mayor Carolyn Goodman, a longtime defender of Ralenkotter, said: “Rossi Ralenkotter has been the quintessential ambassador for Las Vegas, and as an LVCVA board member I have never had any indication of criminality on his part. I hope that the legal system will produce the truth.”

Masking purchases

Convention authority officials discovered the personal use of the Southwest Airlines gift cards in late 2017 while responding to a Review-Journal records request.

The agency was created by state law as the Clark County Fair and Recreation Board in 1955 to promote tourism and run the Las Vegas Convention Center with funding from hotel room taxes. As the tax revenues grew with the steady rise of tourism, the agency evolved into the LVCVA, with a $251 million annual operating budget and political clout to match.

The LVCVA’s 14-member 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.

Police have alleged in court documents that Lawson was at the center of a conspiracy to steal and misuse the gift cards and that he took a series of steps to “mask the purchase” of the cards. Lawson, who has denied wrongdoing, resigned last year before auditors disclosed that they could not account for more than $50,000 worth of the cards. Police eventually located a large share of the missing cards, many of which were also used for personal staff travel.

Lawson directed Southwest employees to include the gift cards, without mentioning them, in the sponsorship invoices, police alleged. Lawson used the same language in LVCVA payment requests for the promotions.

Woodson played a key role in helping Lawson hide the gift card purchases, according to the criminal complaint and LVCVA records obtained by the Review-Journal.

In return, Lawson showered Woodson with several thousand dollars in dinners, concert tickets, hotel rooms and a Grand Canyon helicopter tour, all at LVCVA expense, records show. Lawson also invited Woodson to Las Vegas with other Southwest employees for free group weekends on the Strip during agency-hosted sporting events, costing the convention authority thousands of dollars more.

Police executed a search warrant at the LVCVA offices on March 27, seizing seven years of emails and other electronic records related to the Southwest gift cards. That same day, detectives arrested Lawson. But formal charges were not filed against him at the time.

Detectives sought permission during the search to examine the computers used by Chief Financial Officer Ed Finger, who did an internal investigation that exposed the gift card misuse, according to the search warrant affidavit. Police also looked to search computers once used by Ralenkotter, Tull, Lawson and former travel coordinator Jean Burdett.

Travel office disbanded

Ralenkotter’s personal trips with gift cards were booked through the agency’s travel office, which was disbanded in March and replaced with an online booking system.

Lawson provided $1,400 in Southwest gift cards to Clark County Commissioner Lawrence Weekly for a trip to Dallas with his daughter in 2016, LVCVA officials said. At the time, Weekly chaired the board.

Weekly paid back $700 to the LVCVA and apologized for his actions. He later agreed to pay $2,400 in state ethics fines for violating the public’s trust. Records show he has not been charged.

Days before the convention authority board approved a $455,000 retirement package for Ralenkotter last year, Weekly obtained a letter from police indicating that there were “insufficient facts” to support a criminal case against Ralenkotter at that time.

Lawson’s longtime life partner, Phil Reynolds, who did not work for the LVCVA, bought more than $9,200 in Southwest tickets with the gift cards for himself and family members, court documents show. Police believe that Reynolds, 53, an entertainment booking agent, got the cards from Lawson, who also ended up with some of the airline tickets.

Records show Lawson also arranged additional perks for Ralenkotter.

The Review-Journal reported in April that Lawson had helped Ralenkotter obtain free upgrades for his family members from British Airways between 2012 and 2016.

A British Airways senior vice president was given thousands of dollars in meals and show tickets on the Strip at taxpayer expense in return for providing the upgrades, records show.

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 & Convention Center, which competes with the LVCVA-operated Las Vegas Convention Center.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-4564. Contact Arthur Kane at akane@reviewjournal.com or 702-383-0286. Follow @JGermanRJ and @ArthurMKane on Twitter.

Criminal complaint in LVCVA gift card scandal by Las Vegas Review-Journal on Scribd

Don't miss the big stories. Like us on Facebook.
THE LATEST