Riviera shareholders to vote on political disclosure

Friday, April 13, 2001 | 10:47 a.m.

When shareholders of Riviera Holdings Corp. gather for their annual meeting next month, they'll consider a proposal that would require the company to disclose its contributions to candidates for public office.

Riviera Holdings operates subsidiaries that are the parent companies of the 2,100-room Riviera hotel-casino on the Las Vegas Strip and the Riviera Black Hawk in Black Hawk, Colo.

A proxy statement filed with the federal Securities and Exchange Commission says stockholders will be asked to consider a plan raised by Derek and Michael Schaefer, joint holders of 778 shares of the company's common stock, to publicly disclose political contributions of any amount.

The company opposes the plan, saying it would be detrimental to operations and that the information sought in the proposal already is available through each candidates' campaign contribution filings.

The corporation's annual meeting will be at the Riviera on May 15.

"The amount of money involved in political contributions can be substantial, Nevada law permitting up to $10,000 for any candidate and federal law having 'soft money' contribution opportunities that are almost without limitation," says a statement in support of the Schaefer proposal.

"Some companies donate exclusively to Democrats or to Republicans, even though their shareholders have a variety of political faiths. Some companies donate only to those offices that directly affect the corporation's business, such as state Legislature or the U.S. Congress and never to judicial or school-education-related offices.

"If our corporation has no policy with regards to political contributions, it should," the statement says. "MGM MIRAGE contributes to candidates with whom it has a 'relationship,' regardless of the political office, such as employees who are candidates or candidates who have a family member employed in the industry. Some corporations made no contributions at all as to the political process.

"It is in the best interests of the shareholders that our corporation establish a written policy that can be some guidance to those administering the numerous requests received from both in and out of Nevada in the years to come, a policy that can be debated and/or amended from time to time. Our corporation is a good citizen in the business community of Nevada and elsewhere (Colorado) and our involvement, or lack of involvement, should not be a secret."

Derek Schaefer, who works in concert management for the House of Blues in Los Angeles, and Michael Schaefer, a professional gambler, are being represented on the consideration of their proposal by their father, Michael Schaefer, a Las Vegas political activist and a practicing public interest attorney.

The elder Schaefer lost to Jennifer Togliatti in the Department 7 justice of the peace race in November 1998. He also was unsuccessful in his bid for a North Las Vegas justice of the peace post last year.

He was in the news in April 1999 when Mirage Resorts banned him from its casinos for filing a suit against the company for canceling his casino credit after he asked for an extension.

Schaefer was banned from the properties just before a UNLV Foundation dinner for which he had tickets at the Bellagio hotel-casino. A Clark County District Court judge would not grant a temporary restraining order against Mirage to lift the ban.

Schaefer said he has attempted to get similar campaign financial-disclosure rules implemented at other companies but has been unsuccessful. Most recently, he tried to get a proposal considered by shareholders of MGM MIRAGE, but he said he wasn't able to get his plan into the company's proxy materials.

Duane Krohn, treasurer and chief financial officer for Riviera Holdings, said he was aware that Schaefer has backed similar proposals at other corporations. He said because the request was made in a timely manner in the proper form, it was placed on the Riviera proxy statement.

Riviera Holdings' management opposes the Schaefer proposal and filed a statement against it in the proxy.

"The company does have a policy in effect addressing political contributions for public office," the opposition statement says. "The executive committee reviews, discusses, recommends and decides on each candidate for public office who submits a request for political contribution. The company assumes a nonpartisan position with regards to all such contributions.

"The company has established the position of maintaining the privacy of its policies and feels it is in its best interests to maintain that position. The Schaefer proposal, if approved, would require the company to amend its existing policy to require the company to publish a list of all political contributions, identifying the candidate, date and amount of the contribution.

"Publicizing our policy would afford candidates the opportunity to formulate their requests to meet the design of our policy," the statement says. "Publicizing this or any or our policies is not in the best interests of the company and could have a detrimental effect on operations. In addition, all the information the Schaefer proposal would require the company to publish is already available to the general public through each candidate's campaign contribution filing."

Schafer said he will work to convince stockholders to vote their shares his way, even though the odds are stacked against approval of the plan.

"I think the public feeling is that the gaming industry buys and sells politicians," Schaefer said. "The people want to know what Park Place (Entertainment) or some of the other companies are doing (to influence elections)."