Harrah’s shutters subsidiary

The subsidiary of Harrah's Entertainment at the center of the company's room remodeling controversy was closed Wednesday, terminating the employment of some 200 workers including supervisors of troubled renovations at the Rio, Harrah's Las Vegas and Flamingo.

"Effective immediately, we are closing Roman Empire Development, a subsidiary of Harrah's, that has been providing construction, supervision and labor for room renovation projects in Las Vegas," said Harrah's spokeswoman Marybel Batjer. "This will include all employees responsible for directly supervising improper renovation work."

She added that Harrah's is not suggesting that any of the terminated employees were responsible for the improper renovation work.

"However, we think this action is a necessary component of making sure the mistakes of the past are not repeated," Batjer said.

The decision resulted from a four-month internal investigation. Batjer was unsure whether additional actions will follow.

An internal employee memo, announcing the decision and authored by Harrah's Chairman and Chief Executive Officer Gary Loveman, was distributed late Wednesday to all employees of Harrah's Entertainment.

"Many of you have no doubt heard recent reports about improper renovations at Rio, Harrah's Las Vegas, and Flamingo. These incidents have been the most disturbing issues I have faced in my five years as CEO. I am troubled that in Las Vegas, they may have jeopardized our most precious asset: the confidence and trust of our guests and employees," Loveman wrote.

The company's renovation projects will be handled by outside contractors yet to be determined.

The company would not release any names of individuals who were affected by the closing.

But Tom Adams and Mike Whitehead, two individuals whose names have been connected with the hotels' troubled remodeling projects, have been identified by former remodeling workers as managers of Roman Empire Development, which is based in a warehouse at 3665 W. Twain Ave.

Reached Wednesday afternoon at a cell phone number assigned to Adams, a man who identified himself only as Tom, said, "I have no comment," when asked about the dissolution of Roman Empire Development.

The employees will receive pay and benefits for 60 days under the WARN Act, a federal worker protection law governing mass layoffs of 100 people or more.

None of the workers was reassigned to other departments. But some hourly employees might be rehired by individual properties to do general maintenance.

Clark County Manager Virginia Valentine did not know of the dissolution of Roman Empire Development until late Wednesday afternoon, when a county spokeswoman relayed the information to her from the Review-Journal.

"No, she wasn't aware," said Stacey Welling, county public information analyst. "I don't have any further comment (the county) can offer. I have to refer you back to Harrah's."

Roman Empire Development was formed in December 2006 to merge remodeling and capital improvement departments at Harrah's local properties in Las Vegas. But Roman Empire Development did not exist when controversial remodeling took place at the Rio and Harrah's Las Vegas hotels in 2004 through mid-2006.

Ron Cozart, the business agent for Local 501 of Operating Engineers, whose members took jobs both on the remodeling projects and at Roman Empire itself, said he had no details on the closure but expected to attend a meeting with Harrah's Entertainment representatives today.

Chuck Gillenwater, a carpenter who recently stepped forward to tell the county fire department about being ordered to cannibalize fire safety equipment on two floors at the Flamingo, had worked for Roman Empire Development until last week, when he says he was laid off. Roman Empire laid 14 people off Friday, Batjer confirmed that day, but she did not know whether that count included Gillenwater.

"It's a step in the right direction," said electrician Fred Frazzetta when he learned Roman Empire was shutting its doors. "I have no trust in the people that were running RED." RED is an unofficial acronym for Roman Empire Development.

Frazzetta filed a complaint with the county building division in August 2006, alleging illegal remodeling took place at the Rio. The county then conducted a cursory inspection and approved the remodeling. It reopened inquiries into the remodeling only after the Review-Journal began its own investigation in August 2007 and a reporter questioned county officials about their handling of the complaint.

"The mentality they had was not on safety," said Frazzetta, who had worked under Adams and Whitehead during the Rio remodeling and as a full-time maintenance employee at Harrah's Las Vegas until he was fired in June.

Frazzetta called the timing of Roman Empire's closure curious. The company recently had been doing remodeling, still incomplete, at Caesars Palace. "They're not done at Caesars," he said. "They're going to have to line up contractors to finish that."

Gaming Control Board member Mark Clayton declined to comment on the development and said the regulators would review the investigations when they are done.

Loveman read a statement about the remodeling problems during a Gaming Control Board hearing Dec. 5, but the regulators asked no questions on the issue at that time.

Harrah's Entertainment, which is in the regulatory process of a $17.1 billion buyout by private equity firms TPG Capital and Apollo Management, is scheduled to appear before the state Gaming Commission Dec. 20.

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or (702) 477-3893, or Joan Whitely at jwhitely@reviewjournal.com or (702) 383-0268.