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GOP legislators zip lips on LVCVA spending investigation

Updated April 5, 2017 - 8:50 pm

Assembly Republicans received instructions Wednesday not to talk to the Las Vegas Review-Journal about its investigation of lavish spending by the publicly funded Las Vegas Convention and Visitors Authority.

Ross Hemminger, a spokesman for Assembly Minority Leader Paul Anderson, R-Las Vegas, sent an email to the Republicans, telling them “nothing good comes from engaging on this.”

“The investigative reporters from that story are calling and emailing members for reaction,” Hemminger explained in the message obtained by the Review-Journal. “Please do not engage on this issue — this is not in our wheelhouse. We have no authority over this, and it’s not part of our caucus priorities.”

Anderson backed up Hemminger, saying the matter is a “local issue” and the Legislature doesn’t have the authority to oversee the agency.

The investigation, published on Sunday, reported that the convention authority over the past three years spent millions of taxpayer dollars on high-end entertainment, gifts for employees and first-class trips for its board members.

The questionable purchases at times had little or no business purpose and routinely violated the authority’s own vague expense policies, the investigation found.

Both Gov. Brian Sandoval and Lt. Gov. Mark Hutchison also issued statements Wednesday saying they have no power over the convention authority’s budget.

“The LVCVA has an active Board of Directors which includes representatives from the Clark County Commission, local municipalities, Las Vegas Chamber of Commerce and members of the resort corridor that wholly generate the room tax dollars which make up any public funding of the LVCVA,” Sandoval said.

“All LVCVA governance and budgetary issues are exclusively within the jurisdiction and control of the Board and are subject to Board review, decision and comment.”

Hutchison said the authority’s 14-member board has a “great interest in ensuring that our tourists dollars are spent in the most effective manner. I am confident that the board will review all questions and concerns and will act appropriately.”

Nevada Controller Ron Knecht called on Sandoval and the Legislature to immediately review the questionable spending.

“This behavior is offensive and insulting to every hard-working taxpayer in Nevada,” he said in a written statement.

Defending spending

The effort to avoid discussing potential spending abuses by the convention authority followed an email Tuesday from the agency’s audit committee chairman that was sent to lawmakers, Sandoval and Hutchison in Carson City.

In the email, Board member William Noonan, a senior vice president with the Boyd Gaming Corporation, touted the work of the authority in making Las Vegas a top worldwide destination. He said room tax dollars are being “invested effectively.”

“We take our oversight mission very seriously and do not hesitate to request further information or clarification on spending practices when necessary,” he wrote in the email obtained by the Review-Journal.

Noonan, through a spokesman, declined comment.

Eric Herzik, chairman of the political science department at the University of Nevada, Reno, said he wasn’t surprised by the lack of desire to take on the convention authority, which has a lot of political clout because of its ties to the gaming industry.

“The Legislature doesn’t want to get involved with anything that potentially puts gaming in a bad light,” Herzik said. “Gaming is the most powerful interest in this state.”

Herzik said the Legislature has “pretty broad powers” over entities such as the convention authority, which are funded with tax dollars approved by lawmakers.

“They have the authority to look into that funding,” he said.

Assemblyman Al Kramer, R-Carson City, agreed.

“The Legislature has authority over everything that happens in the state,” he said.

Records reviewed by the newspaper over the past three fiscal years showed that the authority paid at least $697,000 on alcohol, $85,000 to hire showgirls and hundreds of thousands of dollars more for concert tickets, skyboxes, banquets, exotic car rides and jewelry for employees.

Gifts and trips to board members raise questions about whether they can independently oversee spending.

The board’s chairman, Clark County Commissioner Lawrence Weekly, requested $1,000 in concert tickets that he conceded had no business purpose, the records showed.

The Review-Journal examined more than 32,000 pages of receipts from many of the authority’s top executives, finding repeated instances of extravagant expenses. In particular, the receipts detail numerous meals at pricey restaurants that seem to violate the authority’s ambiguous policies of “sensible” menu items and banning “excessive” drinking.

In response to the newspaper’s findings, Rossi Ralenkotter, the authority’s president and CEO, defended the spending as part of the agency’s “relationship building” to attract tourists and stay ahead of its competition.

“We’re No. 1, and we continue to be No. 1 because we continue to do it bigger and better than anyone else, and we have a great destination,” Ralenkotter said.

The authority has a $251 million operating budget, funded mostly by hotel room taxes, to market Las Vegas as a destination. Last year, the Las Vegas area drew 42.9 million visitors.

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.

The Review-Journal owns the domain lasvegas.com, which is subleased to the Las Vegas Convention and Visitors Authority. The sublease terminates Aug. 2.

Contact Jeff German at jgerman@reviewjournal.com. Contact Brian Joseph at bjoseph@reviewjournal.com. Contact Arthur Kane at akane@reviewjournal.com. Follow @JGermanRJ, @bjoseph1 and @ArthurMKane on Twitter.

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