LVCVA boss pursues retirement payout amid criminal investigation

Las Vegas Convention and Visitors Authority CEO Rossi Ralenkotter is taking steps to collect a retirement settlement that could cost taxpayers tens or hundreds of thousands of dollars, even as Las Vegas police conduct a criminal investigation into the tourism agency’s spending practices.

Ralenkotter is the third-highest-paid public official in the state, with a salary and benefits package valued at $863,000 annually. He does not have an employment contract, and the LVCVA has no legal obligation to pay Ralenkotter a retirement settlement. Based on his tenure, Ralenkotter will begin collecting a state pension of about $400,000 a year upon retirement.

He has hired an attorney to negotiate a retirement payment with the authority’s 14-member board of directors, which includes local elected officials and gaming industry representatives. The board has evaluated Ralenkotter annually and awarded him pay raises and bonuses.

His retirement date has not been set, and he told the Las Vegas Review-Journal he is no closer to developing his expectations of a retirement settlement than he was at the board’s June 12 meeting, when he announced plans to retire.

“I’m still just analyzing everything and waiting to make a decision, so I’m just in the same position,” Ralenkotter said as he left the boardroom. “I come to work every day. I’m still in charge.”

Ralenkotter said that when he’s ready to move on, he will schedule a session with the board’s seven-member compensation committee.

“There will be a conversation with the comp committee, and when I make a decision as to when the date will be, then we’ll coordinate around that,” he said. “I have to look at my schedule and what’s happening at the building (the Las Vegas Convention Center). But we haven’t made anything definitive yet.”

The compensation committee’s chairman, Wynn Las Vegas LLC President Maurice Wooden, declined to be interviewed by the Review-Journal in late June. He didn’t attend the July 10 board meeting.

Other members of the compensation committee — vice chairwoman Mary Beth Sewald, CEO of the Las Vegas Metro Chamber of Commerce; Clark County Commissioners Larry Brown and Lawrence Weekly; MGM Resorts International executive Chuck Bowling; Caesars Entertainment Corp. executive Tom Jenkin; and Boyd Gaming Corp. executive Bill Noonan — either declined comment or did not return calls or emails requesting information on a retirement settlement for Ralenkotter.

Unanswered questions

Ralenkotter, 71, has led the LVCVA since 2004 and has been a staff member since 1973. He said at the June 12 meeting that, after reflecting on his accomplishments and his battle with cancer, he was ready to talk about retirement.

He has rejected multiple requests to be interviewed about his retirement and about an audit involving $90,000 of Southwest Airlines gift cards secretly purchased by the LVCVA, which is funded primarily by Clark County hotel room taxes. The cards were used for personal travel by Ralenkotter and Weekly, but $50,000 is not accounted for.

Ralenkotter and his family used $16,207 of cards for personal travel, but when an audit determined the cards were paid for with tax money, he reimbursed the agency and apologized for using them. Noonan criticized Ralenkotter’s poor judgment for the inappropriate use of the gift cards in an April audit committee meeting.

Ralenkotter and LVCVA representatives are not investigating the use of the unaccounted-for $50,000 of gift cards, saying they believe the cost of an investigation would exceed the loss.

Audit investigators said they believed Ralenkotter was unaware the cards had been purchased, thinking they were given to the LVCVA as part of a promotion.

Since discovering the misuse, the board has approved policy changes to prevent the future use of gift cards without proper accounting.

Las Vegas police began a criminal investigation of the handling of the gift cards in late June.

A representative for Southwest said the airline can identify the passengers whose flights were purchased with the gift cards, but the company’s privacy policy prevents it from disclosing that information publicly. It’s not clear whether auditors asked for that information from Southwest or whether police have requested it as part of their investigation.

The executive responsible for the secret gift card acquisitions, Brig Lawson, senior director of business partnerships, has since left the LVCVA and could not be reached for comment.

Uncharted waters

The LVCVA board is in uncharted waters regarding a retirement settlement for Ralenkotter. The issue is further clouded by other recent scandals uncovered by the Review-Journal as part of a rolling 18-month investigation of the agency.

The Review-Journal’s investigation found:

Ralenkotter quietly modified a contract with former Las Vegas Mayor Oscar Goodman as head of a ceremonial tourist host committee that enabled Ralenkotter to administratively approve pay raises and contract extensions without board scrutiny. Goodman is a former LVCVA board chairman.

LVCVA security officers were directed to leave their posts to chauffeur Ralenkotter and Goodman to various locations, even though it isn’t authorized in Goodman’s contract and Ralenkotter receives a $9,000 annual vehicle allowance.

The LVCVA warehouse staff gave away thousands of dollars of iPads, Bose speakers and other gifts intended to promote tourism without noting the recipient or business purpose. Warehouse staff also provided about $6,000 of gift baskets to Ralenkotter.

The authority allowed lavish spending on high-end entertainment, gifts for employees and first-class trips overseas for board members. Some of those expenditures had no business purpose. Policies capping some of this spending have since been imposed.

Ralenkotter confirmed he has hired an attorney, Terry Coffing of Las Vegas-based Marquis Aurbach Coffing, to help him obtain a retirement settlement.

Coffing did not return calls Friday seeking comment about his representation of Ralenkotter.

Retirement negotiations

In the past decade, retiring local government leaders haven’t normally hired lawyers to negotiate retirement settlements with government boards.

Two long-serving public employees had no legal representation when they retired. Pat Mulroy, who retired in March 2014 after serving 30 years with the Southern Nevada Water Authority and the Las Vegas Valley Water District, retiring as general manager, said she didn’t have an attorney representing her interests in developing a retirement package.

Neither did retired Las Vegas City Manager Betsy Fretwell, a spokesman for the city of Las Vegas said.

But an expert in executive compensation said it would be appropriate for Ralenkotter to be represented.

Michael Melbinger, a partner in the employee benefits and executive compensation practice of Winston & Strawn LLP in Chicago, said many companies still like to reward a longtime senior executive with what they might call a “golden goodbye.”

“Ever since the golden parachute rules (emerged) in 1982, everything that’s a little extra is now called ‘golden.’ There’s a golden handshake, golden goodbye, a golden coffin even,” Melbinger said.

“That’s an issue for the board of directors, obviously, and something that presumably they’d be keeping in mind when they negotiate this. It’s all the more reason he needs a lawyer to help him out here,” he said. “Trying to think of this objectively based on not knowing too much, if I’m advising the board of directors, you have fiduciary duties here, and you better think hard about them when you make this payment or agreement for something that’s not currently contractually required.”

Accountability

Two members of a Review-Journal panel of registered voters, while on opposite sides of the political aisle, are united in their thoughts about Ralenkotter and the LVCVA.

Ralenkotter Parachute

“I think they should suspend him right now without pay pending an investigation,” said William Bradley, a 49-year-old commercial airline pilot who is a Republican.

“It’s part of the reason people have lost confidence in their government, when you have something like the visitors authority where people are way overpaid and they’re spending ridiculous amounts of taxpayers’ money on lavish gifts and things like that. It needs to be reformed.”

LVCVA board members have granted Ralenkotter raises in the past five years after surveys of executives in similar positions nationwide found his salary to be below average.

“Maybe something will happen now that there’s a criminal investigation,” Bradley said. “I’m sure that gives them more access to information than just a news story. Nobody likes to see somebody arrested, but if this can lead to a governmental body being held accountable for their actions, their past actions and their future actions, it’s got to improve their performance.”

Jim Sida, a 68-year-old Democrat, expressed a similar view. “I would generally say that the convention bureau needs to be cleaned up and moved to a more modern sense of management and that this Las Vegas good-old boy-stuff reeks,” the retired law enforcement officer said.

“My general feeling is that the convention and visitors authority has been extremely tone-deaf about this to the extent that they continue to do this,” he said, “and it can only create bad feelings on the part of the general public, especially if they ever need public support on something.”

Sida believes Ralenkotter doesn’t deserve anything beyond the pension he will get upon retirement.

“Basically, I don’t know why he or any other CEO that’s had a rough time in their position should receive an off-the-chart golden parachute. That, in and of itself, is kind of fraudulent,” he said.

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.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

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