LVCVA disbands travel office amid airline gift card investigations
The Las Vegas Convention and Visitors Authority has disbanded its travel office and changed its ticket-buying system amid investigations into a gift card scandal.
The Las Vegas Convention and Visitors Authority has quietly disbanded its two-member travel office and changed its ticket-buying system amid criminal, ethics and Review-Journal investigations into a growing airline gift card scandal.
Both longtime travel coordinator Jean Burdett and analyst Hilary Murphy were among three dozen convention authority staff members who accepted voluntary separation agreements offered by the tax-funded agency this year, LVCVA officials confirmed.
The retirements come during a significant turnover in the LVCVA’s executive team that began more than a year ago after auditors disclosed the authority did a poor job of keeping track of Southwest Airlines gift cards.
Convention authority executives learned that staff, including former CEO Rossi Ralenkotter, used the gift cards for personal trips while responding to a records request from the Review-Journal in its ongoing investigation that found excessive spending at the agency.
The LVCVA, which has an annual $251 million operating budget charged with bringing tourists and conventions to Las Vegas, is overseen by a 14-member board of elected officials and gaming executives. During Ralenkotter’s tenure, it was regarded as politically untouchable.
New CEO Steve Hill, who took over in September, has been making an effort to put together his own team and change the tourism agency’s free-spending culture.
For most of her 17 years at the LVCVA, Burdett served as the in-house travel agent, booking both business and personal trips for staff members.
Her knowledge about the traveling exploits of Ralenkotter and other key executives linked to the gift card irregularities has made her an important witness for authorities investigating the mishandling of $90,000 in Southwest cards bought by the LVCVA between 2012 and 2017.
Burdett, 59, told auditors last year that Ralenkotter directed her to use Southwest gift cards for his personal travel and that he kept some of the cards in his top desk drawer. After Ralenkotter admitted in 2017 that he used $17,000 in cards on personal trips, the convention authority stopped booking all personal travel through Burdett’s office, a Las Vegas police report states.
Burdett said she simply accepted a buyout package from the LVCVA and would not discuss her retirement.
In March, the convention authority switched to an online booking system that allows staff to arrange airline flights, hotels and other transportation for business trips without going through a travel coordinator, said Lori Nelson-Kraft, senior vice president of communications and government affairs.
Nelson-Kraft would not say whether there was any connection between the rollout of the new system, which is supported by an outside travel agency, and the investigations involving the Southwest Airlines gift cards.
“The change was about reducing operational costs and improving business efficiency,” she said.
In an 18-page summary of the agency’s 2019 accomplishments, Hill made a small reference to the new travel system, which he described as “extremely successful” in its first several months.
Staff members can now manage their own travel with a cellphone application, “allowing easier and safer travel and valuable time to focus on their business,” Hill wrote.
But they cannot use their company accounts to book personal travel, according to Nelson-Kraft.
Clark County Commissioner Larry Brown, who chairs the LVCVA board, said the online system is typical of what most major corporations use and has built-in accountability with “real-time documentation” of who’s doing the traveling and who’s approving it.
“This is just another example of Steve Hill taking over the organization and changing the way we do business,” said Brown, adding that he understands the ongoing investigations into the Southwest gift cards are eventually going to play out.
“More important to me is moving the agency forward,” Brown said. “I think Steve has done a great job of bringing in some fresh faces and taking a hard look at some policies. These are all positive things.”
Burdett, who retired in April, took a $56,197 financial package that included $34,128 in severance, $17,212 in unused vacation time and several months of health insurance payments, records show.
Murphy, a 13-year LVCVA veteran, got a $39,355 separation deal in February, with $27,214 paid out as severance. She also received $7,757 in vacation time and money for health insurance.
In the past year, seven top LVCVA executives also have left the tourism agency, including Ralenkotter and business partnerships director Brig Lawson, the two central figures in the criminal investigation into the gift card misuse.
Those who left included Michael Goldsmith, vice president of marketing; Hugh Sinnock, vice president of customer service; and Jacqueline Peterson, chief communications and public affairs officer.
Legal Counsel Luke Puschnig, who is credited with discovering Ralenkotter’s personal use of the Southwest gift cards, retired earlier this month with a $113,000 separation agreement. He was replaced by Caroline Bateman, former first assistant to Nevada Attorney General Aaron Ford.
Former Chief Marketing Officer Cathy Tull, who spent 14 years at the tourism agency, resigned in April after it became public that police had determined she used $6,000 in Southwest gift cards on travel for herself and family.
Tull, one of Ralenkotter’s closest subordinates at the convention authority, did not get severance pay but walked away with more than $110,000 for 877 hours of accrued vacation time, records show.
Less than a week after the police disclosures, Tull wrote a $6,059 check to the LVCVA for her personal use of the gift cards, records show. A few days later, she gave up her job and so far has not been replaced.
Her lawyer, Mike Pavlakis, did not respond to a request for comment.
Gift cards missing
In a final report presented to the agency’s board in June 2018, auditors said that they could not account for more than $50,000 worth of Southwest Airlines cards and that another $20,000 in cards, including the $17,000 worth used by Ralenkotter, went toward personal travel.
Lawson, who gave Ralenkotter the cards, resigned days before the audit report was released. He left after 11 years at the agency with a financial package worth more than $100,000. The package included $36,672 in severance, $59,715 of unused vacation pay and up to $12,000 of monthly health insurance coverage for a year, records show.
Las Vegas police launched the criminal investigation a year ago following a series of Review-Journal stories about the gift card allegations.
Ralenkotter retired in August under the weight of the police investigation, which is being conducted by the Metropolitan Police Department’s Criminal Intelligence Section. The unit handles sensitive political corruption cases.
Before he stepped down with a $455,000 separation package, Ralenkotter reimbursed the LVCVA for his personal use of the gift cards and apologized for his conduct. But he denied criminal wrongdoing and remains involved with the authority, earning $15,000 a month as a consultant. Ralenkotter, who spent 14 years at the helm of the agency, also is receiving nearly $300,000 a year in public retirement benefits.
In the past year, detectives obtained Southwest Airlines records and located the majority of the missing $50,000 in gift cards. The police investigation has found that at least another $15,000 in cards, including Tull’s, were used on personal travel, records show.
Lawson’s longtime life partner, entertainment booking agent Phil Reynolds, bought airline tickets with more than $9,200 in cards. Lawson wound up using some of those tickets, police alleged.
Police probe picks up
After little public activity for months, the criminal investigation took off on March 27, when police executed a search warrant at the LVCVA offices looking for more evidence.
That same day, detectives arrested Lawson, alleging he was at the center of a conspiracy to steal the Southwest gift cards. Police have not yet filed formal charges against Lawson, who is out of custody. His defense lawyer, Chris Oram, said Lawson did not commit wrongdoing.
The March 27 events came days after a Review-Journal story revealed that Ralenkotter had pushed for $10 million in tourism funds for a police substation expansion in the middle of the criminal investigation. He even attended a meeting with Sheriff Joseph Lombardo to discuss the project, which was approved earlier this year by the LVCVA board.
Since the convention authority search, detectives have been poring over seven years worth of electronic records related to the Southwest gift cards that were seized.
Because the investigation is still active, police declined to comment.
Police have alleged that Lawson concealed the gift card purchases in LVCVA financial records promoting the airline and distributed them for his own personal gain. Tull, one of Lawson’s supervisors, approved the majority of the transactions, records show.
Lawson and Tull also played key roles in helping Ralenkotter get free British Airways upgrades for his wife and daughter. Tull also received more expensive seats on flights for her then-husband and sister, as well, records show.
The LVCVA rewarded the British Airways executive who took care of the upgrades with thousands of dollars worth of meals and show tickets on the Strip, records show.
Jean Burdett once questioned the high-level efforts to obtain the upgrades. She wrote an email suggesting British Airways considered handing out upgrades to LVCVA executives a “payoff or bribe to a government official.”
Since Tull resigned, she has wasted little time moving on from the LVCVA.
In May, she formed a marketing company under her maiden name called Cartier Global Strategies LLC. But earlier this month, she took a job running the Las Vegas office of Cult Collective, a Canadian-based marketing service company that bills itself as “North America’s leading audience engagement firm.”
In a news release, Cult CEO Chris Kneeland touted Tull’s tourism experience as “invaluable” to his company, saying “she knows how to navigate complex organizations and deal with big egos.”
At the same time, the Nevada Commission on Ethics expanded its gift card investigation to include allegations that Tull violated the public’s trust. In January, former LVCVA board chair Lawrence Weekly struck a deal with the commission to pay $2,400 in fines over his misuse of Southwest gift cards on a trip to Dallas with his daughter. The commission also has been investigating Ralenkotter and Lawson.
Kneeland said he is aware of the allegations swirling around Tull and takes them seriously.
But he added, “I believe her to be a woman of integrity. She’s been incredibly transparent about this from the beginning, and we are confident that there’s going to be a swift conclusion and she’ll be able to go on with her life.”
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 email@example.com or 702-380-4564. Follow @JGermanRJ on Twitter.
SOUTHWEST AIRLINES GIFT CARDS TIMELINE
An audit report reveals that Rossi Ralenkotter, then CEO of the Las Vegas Convention and Visitors Authority, used $17,000 in Southwest Airlines gift cards bought by the tourism agency on personal travel.
Brig Lawson, the executive who purchased $90,000 worth of Southwest gift cards for the LVCVA between 2012 and 2017, is forced to resign.
The gift card scandal widens after auditors disclose that they could not account for more than $50,000 of the Southwest gift cards.
Las Vegas police launch a criminal theft investigation into the missing gift cards. Police make it clear to LVCVA officials that Ralenkotter and Lawson are targets.
The LVCVA board approves a $455,000 retirement package for Ralenkotter, and he steps down two weeks later.
Steve Hill takes over as the convention authority’s CEO and promises to change the agency’s free-spending culture.
The Review-Journal reports that the Nevada Commission on Ethics is investigating the misuse of public funds relating to the Southwest Airlines gift cards.
Former LVCVA board chairman Lawrence Weekly agrees to pay the Ethics Commission $2,400 in fines for using $1,400 in Southwest gift cards on a trip with his daughter.
The Review-Journal Reports that Ralenkotter met with Sheriff Joseph Lombardo in the middle of the criminal investigation to discuss providing $10 million in tourism funds to police for a substation expansion project.
Police execute a search warrant at the LVCVA offices and seize seven years worth of records related to the gift card investigation.
Lawson is arrested on a theft charge involving the missing Southwest cards. Police accuse the former director of business partnerships of being at the center of a conspiracy to steal the cards.
A police report is made public revealing that Cathy Tull, then-chief marketing officer for the LVCVA, used $6,000 in Southwest gift cards on personal trips for herself and family.
The Review-Journal reports that Ralenkotter directed staff to obtain free upgrades from British Airways for his family. Lawson and Tull helped Ralenkotter get the better seats.
Tull resigns after being publicly linked to both the Southwest Airlines gift card scandal and the British Airways upgrades.
The Nevada Commission on Ethics gets authority to move forward with a complaint against Tull, accusing her of violating the public’s trust.