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Police seize records from LVCVA as gift card investigation grows

Updated March 27, 2019 - 9:07 pm

Police executed a search warrant at the Las Vegas Convention and Visitors Authority offices Wednesday afternoon in a widening investigation into misuse of Southwest Airlines gift cards bought by the agency.

Detectives showed up about 1:30 p.m. with a hard drive to copy all emails and other electronic records related to the gift cards dating back seven years, the length of time the agency retains its electronic documents, knowledgeable sources said.

As of 6:30 p.m., police were still at the offices, which are located at the Las Vegas Convention Center.

“They’re at the convention center as part of the ongoing Southwest Airlines gift card investigation,” Metro spokesman Larry Hadfield said.

Luke Puschnig, the convention authority’s legal counsel, walked out of his office about 5:30 p.m. looking for police, adding that he had just learned of the search.

Authority cooperating

Authority CEO and President Steve Hill issued a statement saying, “We are cooperating with all LVMPD requests. We look forward to a swift resolution of this matter, so that we can continue to focus on our mission of bringing millions of visitors annually to our destination.”

The search marked the first public sign that the investigation is moving forward since detectives visited the agency’s offices nine months ago and seized audit records showing staff took personal trips with Southwest Airlines gift cards. The audit found that the tax-funded agency did not properly track the gift cards and more than $50,000 in cards were missing.

The police action comes less than a week after the Review-Journal reported that former authority CEO Rossi Ralenkotter pushed for $10 million in tourism funds to expand a police substation on convention authority property while detectives were investigating the agency.

During the initial police visit in June, detectives made it clear to top convention authority executives that Ralenkotter and the agency’s business partnerships director, Brig Lawson, were targets of the theft investigation, knowledgeable sources said.

Ralenkotter, who retired and became a consultant for the agency on Aug. 31, admitted using $17,000 in cards for personal travel and reimbursed the agency. He publicly apologized for his conduct, and the board approved recommendations from auditors to tighten controls over the gift cards.

Ralenkotter, who has denied any criminal wrongdoing, said late Wednesday that he didn’t know anything about the search and had no comment about it.

Lawson, who was forced to resign from the authority on May 31, bought $90,000 in Southwest Airlines gift cards between 2012 and 2017. The purchases were hidden in payment records as part of a series of broader promotions the agency sponsored for Southwest, according to an audit report.

Lawson could not be reached for comment.

Days before the convention authority board approved a $455,000 retirement package for Ralenkotter in August, then-board chair Lawrence Weekly asked police for an update on Ralenkotter’s status in the investigation, which was still in its early stages. A top police official responded with a letter saying detectives had not found evidence of wrongdoing against Ralenkotter “at this time.”

Weekly, a Clark County commissioner, had used $1,400 in Southwest Airlines gift cards for a trip to Dallas with his daughter in 2016. He apologized and reimbursed the authority $700 for his daughter’s ticket.

A month after Ralenkotter became a target of the investigation, he sought a meeting with Sheriff Joe Lombardo and authority executives to discuss the substation project, emails show. The meeting, which took place on Oct. 2, caused concerns among legal experts who questioned whether it raised potential conflicts of interest for Lombardo as police pursue possible charges in the investigation.

The substation project has not yet been presented to the convention authority’s board, which includes local elected officials and business leaders.

Concerns about the handling of the Southwest gift cards within the agency first came to light publicly at an April 25 meeting of the board’s audit committee.

Then, on June 8 a final audit report disclosed that staff spent nearly $20,000 in Southwest Airlines gift cards on personal travel. Auditors said about $20,000 in cards were used on legitimate convention authority business, but the auditors could not account for the rest of the $50,000 in cards.

Finance managers discovered the misuse of the gift cards in 2017 as a result of a Review-Journal investigation that uncovered excessive spending at the agency, which has a $251 million annual operating budget.

After Ralenkotter retired, police obtained records from Southwest Airlines under a grand jury subpoena in an effort to find the missing cards and determine how they were used.

Ethics investigation

The Nevada Commission on Ethics launched a separate investigation into the mishandling of the Southwest gift cards.

In January, Weekly agreed to pay $2,400 in fines for abusing his position of public trust and violating the state ethics law. He independently stepped down as board chair in January.

Weekly contends he went to Dallas with his daughter on business, but he did not seek business expenses from the convention authority, and in his agreement with the Ethics Commission, he acknowledged the trip was personal.

The Review-Journal reported earlier this month that Weekly paid his expenses in Dallas with campaign funds.

The Ethics Commission is still investigating the conduct of Ralenkotter and Lawson.

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.

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