Nevada Seeks to Curb Lavish LVCVA Spending by Hiring Costly Inspector General

Posted on: May 24, 2017, 05:00h. 

Last updated on: May 24, 2017, 04:07h.

Casino.org Staff Writer Read More
Expertise: Commercial Gaming.

The Las Vegas Convention and Visitors Authority (LVCVA) receives hundreds of millions of tax dollars each year, but has little financial oversight from the state on how its board members use those funds. Five Democratic lawmakers and one Republican in Carson City want to change that, by creating a new financial regulatory position that would supervise spending by all government agencies.

LVCVA spending Rossi Ralenkotter
LVCVA CEO Rossi Ralenkotter made more than four times the salary of Nevada Gov. Brian Sandoval in 2016. (Image: Vegas Inc.)

Assembly Bill 404 seeks to establish the Nevada Office of the Inspector General to better regulate agencies that receive state money. The legislation doesn’t single out the LVCVA as its reason for creation, but a recent report by the Las Vegas Review-Journal questioning seemingly indulgent spending by the tourism authority generated questionable concern in the capital.

Assemblyman William McCurdy (D-Las Vegas), one of three primary sponsors of the bill, told the Review-Journal this week, “Anytime you have an opportunity for oversight over the spending of public money, it is always a good idea.”

But McCurdy apparently understands the notion of having to spend money to make money. According to the bill’s own authors, the inspector general office could cost up to $2 million a year.

Follow the Money

Nevada doesn’t have an auditor general. It does, however, have a legislative audit division that supports the legislature in improving accountability and effectiveness in the capital.

AB 404 was introduced in March, but since then has gained little traction in the lower chamber.

The bill currently sits with the Ways and Means Committee, and Chairwoman Maggie Carlton (D-Las Vegas) hasn’t expressed much interest in reining in the public-private partnership that has been nationally recognized as a top convention and visitors bureau for nearly 20 years.

Earlier this month, the LVCVA revealed in its proposed fiscal budget that it plans to spend more than $367 million from its projected income of $383 million, which is primarily funded through hotel occupancy taxes. That includes a five percent increase in advertising to $101.3 million and $113.5 million spent on renovating and expanding the Las Vegas Convention Center.

Fake Scandal?

The LVCVA spending controversy that AB 404 addresses, at least indirectly, concerns how the authority uses its share of taxpayer money to woo large conventions and trade shows to Las Vegas.

Per financial disclosures, the agency’s 14-member board spent almost $700,000 on alcohol over the previous three years, $85,000 on showgirls, and nearly $100,000 on tickets to shows.

Some contend the figures highlighted by the Review-Journal’s reporting seem plenty reasonable for people charged with showing the “best of Vegas” to decision makers capable of bringing hundreds of millions of economic activity to the state.

LVCVA paid its CEO Rossi Ralenkotter $768,000 in salary, bonuses, and benefits in 2016. By comparison, Nevada Gov. Brian Sandoval received about $185,000 for his annual compensation package. The Review-Journal, meanwhile, is owned by casino billionaire and rightwing Republican donor Sheldon Adelson, who often is at odds with the more moderate Republican Nevada governor.

A new norm today in both state and federal politics is for the creation of independent governmental bodies to monitor governmental operations. While some see this as critical to effective oversight, others see it as signs of an expansive bureaucracy run amok, creating a self-fulfilling prophesy that may eventually merit costly oversight of its own.

In the end its all about deciding where taxpayer dollars go. But because LVCVA is not run by elected officials, voters have little input about who gets to make those decisions.