Columnist Jeff German: Tightening the reins on LVCVA

Wednesday, Aug. 10, 2005 | 11:05 a.m.

It's hard to believe that the Las Vegas Convention and Visitors Authority -- a 50-year-old public agency with a $190 million annual budget -- has had so little public accountability.

But that's basically what the San Francisco-based Morrison & Foerster law firm told the LVCVA board Tuesday in an investigative report critical of the way the LVCVA dealt away its most popular advertising slogan, "What happens here, stays here."

The 41-page report -- which recommends administrative changes aimed at bringing long-overdue accountability to the agency that markets Las Vegas around the world -- has prompted the board to re-evaluate how it oversees the LVCVA.

"We've been going along busting our tails trying to bring people into this town," board member Jim Gibson said after the meeting. "But some of the technical elements in running and maintaining the organization did not get as much attention."

This is a startling, but candid, admission that the 14-member board has done a lousy job of watching over the management team that's supposed to carry out its directives.

It explains how LVCVA President Rossi Ralenkotter was able to turn over the slogan's lucrative rights to the LVCVA's longtime advertising agency, R&R Partners, without the board's approval and without even the slightest public discussion.

"Looking back I'm sure everybody involved would have preferred this was handled differently," said Gibson, who chaired the board at the time Ralenkotter secretly inked the deal with R&R Partners CEO Billy Vassiliadis.

Morrison & Foerster concluded that the agreement was done in "good faith solely to facilitate the protection of that mark from infringement" and that R&R Partners did not attempt to take an "unfair" financial advantage of the slogan.

But the law firm also recommended that the LVCVA at some point attempt to get back "What happens here, stays here" from R&R Partners and not enter into such an agreement in the future. The validity of the deal has been questioned in an ongoing court case over the slogan.

By far the most important recommendation by Morrison & Foerster calls upon the LVCVA to do something it has never done -- put policies in writing to spell out how the tourism agency should manage its assets and contracts.

This is supposed to be standard operating procedure for any taxpayer-funded agency. But the LVCVA has been able to avoid doing it all these years, primarily because it has answered to a board that has basically rubber-stamped its actions.

The reins, however, are about to be tightened around the LVCVA.

The board's chairman, Las Vegas Mayor Oscar Goodman, appointed a special four-member committee Tuesday to review Morrison & Foerster's recommendations and come up with detailed oversight policies.

Goodman named himself chairman of the panel, which is a pretty good sign that he shares Gibson's concerns.

"We're going to rectify things now," Goodman said.

Added Gibson: "We're going to come out of this feeling like the accountability that needs to be there is clearly there."