LVCVA committee chairman says auditors need to look closer at gifts

The audit committee chairman of the Las Vegas Convention and Visitors Authority said agency reviews did not flag questionable expenses uncovered in a Las Vegas Review-Journal investigation before the story ran. But he is planning a change that might scrutinize similar spending in the future.

Committee chairman Bill Noonan said Tuesday that when the audit committee puts together a new plan this fall, he will ask staff to look for items such as gifts to employees.

“As we develop (the) audit plan for next year, I’m sure there will be a lot of those kind of discussions,” he said. “Maybe that will be a time … (to) decide if there are some audits that we need to do that maybe we haven’t done in the past.”

His comments represent the agency’s first vow to take action in light of the Review-Journal’s findings.

But Noonan, a senior vice president at Boyd Gaming Corp. and chairman of the Las Vegas Metro Chamber of Commerce, also said that taxpayers should not compare the authority, despite its overwhelming reliance on hotel tax dollars, with other governments.

“I think trying to equate the city with LVCVA is really apples to oranges,” he said. “We need them to spend money wisely at LVCVA to bring more conventions in here.”

The authority has an outside auditor who reviews the books. But internal auditors, who report directly to Noonan’s committee, sample about 20 percent of spending, including entertainment and gifts. The audits posted online, which include quarterly reviews of expense accounts, did not detail the spending found by the Review-Journal.

Noonan, who joined the board in 2014, said spending $50,000 in tax money on luxury jewelry and rings for authority staff, including a $3,600 ring to commemorate CEO Rossi Ralenkotter’s 40 years with the organization, was worth reviewing.

“I would say that is the outer limit of what’s reasonable,” Noonan said of Ralenkotter’s ring. “But do I think it’s unreasonable? No. I think Rossi, the amount of time, effort, blood, sweat and tears that he’s given to this community, I think it deserves perhaps a piece of jewelry worth that amount of money.”

An authority representative added: “The LVCVA has an employee recognition program that was started more than 25 years ago by a previous CEO. This is a widely accepted business practice — especially in marketing and branding organizations in the DMO (destination marketing organization) industry throughout the United States — to recognize the significant achievements of long-term employees.”

Earlier this month, the Review-Journal detailed how the authority spent $700,000 on alcohol, including $40,000 on wine that exceeds the agency’s $100-a-bottle policy, tens of thousands in gifts to employees and entertainment that appears to exceed the authority’s policy of “reasonable” purchases.

Noonan said questions about spending on pricey meals and concert tickets are best handled by the board’s policy committee.

Curtis Kalin, a spokesman for Washington, D.C.-based Citizens Against Government Waste, described the spending as “pretty jaw-dropping.”

“It’s a shame if the auditing chair didn’t catch these pretty egregious violations of (the agency’s) own rules,” he said. “There needs to be stringent accountability for anyone who spends taxpayer money.”

The authority hired Mike Bond, who came from Boyd Gaming last year, to head that internal audit staff. He replaced Jon Reese, who is now retired but headed the auditing department during much of the questionable spending. Reese did not answer repeated calls and a visit to his home seeking comment.

Despite saying some expenses may need further review, Noonan said the rule limiting wine to $100 a bottle may be too low. “I would probably argue that maybe the policy, the way it’s written now, is probably a little too conservative,” he said.

Critics told the Review-Journal that gifts to board members, including $1,000 in concert tickets for authority chairman Lawrence Weekly, have a corrupting influence. Weekly, who chairs the authority board, also is a member of the audit committee.

Noonan declined to address the issue.

“He is a county commissioner,” he said. He “has been re-elected a number of times. People must think he’s doing his job.”

Kalin said using internal auditors is a mistake.

“There should be some outside auditors so they can have an independent look at his kind of spending,” he said.

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 hosts conventions and trade shows the same way as the LVCVA.

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