Lawsuit claims Venetian defects

Jeff German and Gary Thompson

Friday, Dec. 4, 1998 | 12:42 p.m.

A former manager at the Venetian construction job filed a lawsuit alleging the $1.2 billion Strip project has defects, is seven months behind schedule and is $160 million over budget.

But the Venetian's owner, Las Vegas Sands Inc., and the New York company hired to oversee its construction insisted the project is in the black and ready to meet its April 21 opening date.

"This is absolute horse....," an angry Las Vegas Sands President Bill Weidner said today. "We already have 1,500 rooms finished and furnished, and I'm p..... off I have to answer bondholder questions because of this.

"The allegations he's making are totally outrageous."

"He" is John Prendeville, who was fired as the project's procurement manager in March of this year. Prendeville alleged in the 35-page suit that the Venetian is "overrun with illegal kickbacks, bid rigging, manipulations and payoffs."

The accusation also was strongly denied by the New York construction company, Lehrer McGovern Bovis Inc.

"We simply cannot substantiate any of his allegations despite our repeated investigations," LMB President Peter Marchetto said today in a statement.

"At LMB, we highly value our ethics, our integrity and our reputation. We will not tolerate the actions of any employee who might deviate from that high standard. We will always fully investigate any charge of wrongdoing. But we can not find any support for even a single one of Prendeville's accusations."

The 38-year-old Prendeville charged he was wrongfully terminated in March because he wouldn't participate in LMB's hidden schemes. He is seeking nearly $6.8 million in damages from the company.

Sam Singer, a San Francisco crisis management specialist brought in to help LMB deal publicly with Prendeville's claims, said Thursday the ex-procurement manager was let go because he couldn't handle his job.

Weidner, who answers directly to Chairman Sheldon Adelson, said his company has been investigating Prendeville's allegations and so far have found them to be baseless.

"We're doing our investigation and acting as responsibly as we should when something like this happens," Weidner said. "Of the allegations that directly affect us, none of them that we can see hold any merit."

Weidner said the Venetian is not over budget and is on schedule to make the April 21 deadline. That's the date lenders have required the Venetian to have at least 2,000 rooms and 2,000 dining seats ready.

"We hope to know next week if we'll be able to have 2,500 rooms ready by April 13," Weidner said. "We have requests for reservations from people who'll be attending the NAB (National Association of Broadcasters) convention starting April 18 and expect to start confirming them later this month."

Singer added: "They're on budget, and they're on schedule."

Singer described Prendeville as a "former disgruntled employee trying to extort money" from LMB.

Prendeville, he said, told company officials in May he wouldn't file the suit if they paid him the $6.8 million he believes he's owed. But the company wouldn't pay up and launched its own thorough internal investigation that concluded there was no merit to his allegations.

"Now, he's trying to embarrass us and give us a black eye," Singer said. "What he's saying isn't true."

Prendeville, who quietly filed the suit himself without a lawyer, charged the project is millions over budget because of "gross mismanagement" by LMB, an allegation the company denied.

He also alleged LMB is concealing "structural defects" in the concrete walls and floors from the 12th through 36th floors of the south tower.

And Prendeville, who remains unemployed, alleged that electrical installations throughout the south tower may be creating fire hazards and compromising the safety of future hotel guests.

But Singer said the Venetian is 100 percent safe.

"The tower is structurally sound," Singer said. "There's not a single thing wrong with it."

He said the project has passed numerous inspections.

"It meets or exceeds all safety and fire standards and has been approved by the appropriate regulatory and certifying authorities," he said.

Singer also denied Prendeville's claims of kickbacks and bid rigging on the project.

"There's no wrongdoing of any kind," he said.

Singer said Prendeville was let go in March because he wasn't doing his job properly.

"He wasn't able to complete his work in a timely fashion on a fast-moving project," Singer said.

Prendeville filed suit in federal court because LMB maintains its headquarters outside Nevada.