Gates gives up business, but hearing possible

Jeff Schweers

Thursday, Oct. 9, 1997 | 9:52 a.m.

The Nevada Ethics Commission must decide whether to still hold a hearing next month on whether County Commission Chairwoman Yvonne Atkinson Gates acted properly regarding a business venture from which she withdrew Wednesday.

The Ethics Commission could still address the issue, despite an announcement from Gates that she was giving up her interest in a Fat Tuesday's frozen daiquiri franchise.

Gates came under fire for asking casino executives about how to go about leasing space for such a venture. Gates insisted she did no wrong and that she openly sought an ethics opinion on her proposed business venture after the Clark County district attorney's office told her it would be legal.

"I believe my conduct relating to this business and my responsibilities as a county commissioner have been proper and appropriate," Gates said in a prepared statement.

Her only mistake, Gates said, was that she did not wait for an opinion from the Ethics Commission about her business dealings before approaching gaming executives about leasing space.

"It was poor judgment," Gates said. "I was premature in talking to anybody before getting it cleared from the Ethics Commission."

Ethics Commission Chairwoman Mary Boetsch and Deputy Attorney General Louis Ling were still discussing Wednesday whether to answer Gates' requests relating to her business interests.

The panel was to hear arguments Nov. 13 or 14.

Gates and her business partner, developer Ed Nigro, have the Southern Nevada franchise for Fat Tuesday's, a national chain of daiquiri shops. Gates said she will relinquish her share of the partnership, but the limited liability corporation and managing group formed with Nigro will remain intact.

That means the $12,000 in start-up expenses owed by Gates will be absorbed by the corporation and Gates will get back the $500 she put up for the $1,000 incorporation fee.

"I will give up the business before I leave the County Commission," Gates said.

Gates said she entered into the venture with Nigro so she would have some way to earn income if she left public office. Her County Commission salary is $54,000 a year. Her husband, Lee Gates, is a district judge making $106,000 annually.

Gates sought legal advice from the district attorney in June 1996 about whether it would be legal for her to enter into the business venture and rent space from a resort.

In a four-page opinion dated June 24, 1996, then-County Counsel Mahlon Edwards advised Gates that she would have to abstain from voting on matters relating to any hotel she leased space from since the commission makes decisions relating to licensing and zoning of casinos.

When it looked like she and Nigro might be renting space from the MGM Grand, Gates sent the Ethics Commission a letter last May asking if she should disclose her relationship or abstain from voting on MGM Grand business.

The Ethics Commission's lawyer, Deputy Attorney General Louis Ling, said the board told her at a Sept. 26 hearing that she would always have to disclose her business ties, and in most cases would have to abstain from voting on MGM Grand matters.

Gates, Nigro and the MGM Grand were awaiting a written opinion before executing their lease agreement. After news reports said Gates had talked to several casino executives about her fledgling business, she asked the Ethics Commission for a broader opinion on the appropriateness of the venture.

She also asked the district attorney's office to clarify its prior opinion. Deputy District Attorney Mary-Anne Miller reiterated the commissioner's legal right to enter into a lease agreement with a hotel-casino as long as she abstained from voting on matters related to that hotel-casino.

Gates said her conversations with Primadonna Resorts President Gary Primm and Las Vegas Sands Inc. Chairman Sheldon Adelson about who to talk to about leasing space were casual remarks made in passing. And an inquiry to Circus Circus Senior Vice President Mike Sloan was on behalf of a friend, she said.

The only resort Gates' company did business with was the MGM Grand, and Gates herself had no part in the lease negotiations, she said.

Nigro initiated those discussions with the MGM Grand, calling MGM Chairman Terry Lanni to set up a meeting that included Gates.

"He came with Yvonne and we met briefly in our conference room," Lanni said.

Lanni said he got Nigro together with Greg Saunders, the MGM's vice president for operations, and the two of them talked about the project.

"I told Greg if this makes sense from the hotel-casino's standpoint, he was free to continue with them on this matter," Lanni said.

Several months later, Saunders told Lanni some space was available in the Star Lane Mall, and the two of them negotiated a contract to lease 700 square feet for $200,000 a year.

"I have asked if there is any difference in this compared to anyone else, and I'm told their lease is no more favorable than anyone else," Lanni said.