Columnist Jeff German: Much too close for comfort

Friday, July 1, 2005 | 10:59 a.m.

It's no secret within political circles that the Las Vegas Convention and Visitors Authority and its high-powered advertising agency, R&R Partners, have a close working relationship.

Together, the LVCVA, a public agency, and R&R Partners, a private firm, have been promoting Las Vegas for 25 years.

The danger of combining public and private resources to pursue the public's business is that sometimes the public's business comes in second.

That's what happened when the LVCVA secretly sold its most popular marketing slogan, "What happens here, stays here," to R&R Partners for $1.

There's still a lot we don't know about the Grand Giveaway but, from what we do know, it looks as though these separate entities have stretched the boundaries of their public-private partnership.

It's a conclusion you come to when you look at the shady dealings leading up the Nov. 9 trademark assignment agreement, signed by LVCVA President Rossi Ralenkotter and R&R CEO Billy Vassiliadis, who is one of the most powerful political operatives in the state.

This is the agreement that wasn't brought before the LVCVA's 13-member board and worse, only happened after Ralenkotter, with Vassiliadis and company waiting in the wings, manipulated the board on the same day into giving him the authority in writing to act alone.

Eight months earlier, during the administration of Ralenkotter's predecessor, Manny Cortez, R&R, almost brazenly, was claiming that it already owned the prized slogan.

R&R filed an application March 22, 2004, with the U.S. Patent and Trademark Office in Alexandria, Va., for a federal mark to use the slogan in advertising and public relations. In that application R&R General Counsel Morgan Baumgartner said she believed R&R owned the mark.

On that same day, R&R filed a federal trademark infringement complaint in Reno against Dorothy Tovar of Placerville, Calif., to stop her from marketing a risque line of clothing under the similar logo, "What happens in Vegas, stays in Vegas."

In the complaint R&R said the LVCVA registered the mark for "What happens here, stays here" with the Nevada secretary of state on July 11, 2003, but had since "transferred all right, title and interest in and to the mark to R&R."

The firm, however did not explain in the complaint when it acquired the rights to the slogan. And, of course, there was no written agreement yet with the LVCVA to support R&R's claim. The company later said in court papers that it had obtained the rights through an oral agreement in "late 2003" -- again under the watch of Cortez, who did not return phone calls.

Daniel Ballard, a Sacramento trademark attorney representing Tovar, contends R&R legally didn't own the rights to "What happens here, stays here" when it filed suit against his client.

"I think back then they still weren't thinking that there was any distinction between the LVCVA and R&R Partners," he said. "Their longterm relationship led them to believe that R & R Partners could assert rights that belonged to the LVCVA."

Ballard said deals transferring ownership of valued marks are generally "arms-length" transactions.

But that wasn't the case with the Grand Giveaway.

It wasn't until Ballard started questioning the validity of R&R's ownership later in 2004 that the LVCVA and R&R started thinking about putting something in writing.

That resulted in the poorly put-together Nov. 9 agreement in which the LVCVA appeared to give R&R everything but the kitchen sink in the interests of keeping alive the lawsuit against Tovar.

The ink was barely dry when R&R sent off another application to the Patent and Trademark Office giving notice it intended to market "souvenirs and clothing" under the "What happens here, stays here," logo.

In the Nov. 9 agreement, both Ralenkotter and Vassiliadis practiced some more revisionism. They said the deal was effective not on that date, but on Jan. 1, 2004 -- 11 weeks before R&R filed suit against Tovar.

The incestuous relationship between the LVCVA and R&R, meanwhile, hasn't lessened in the ensuing months, which is raising still more red flags.

In January Luke Puschnig, the LVCVA's legal counsel, wrote Ballard informing him that Kirstin Jahn, the lawyer who filed the complaint for R&R, "is serving as counsel" for the LVCVA in "all matters involving LVCVA's license and use of 'What happens here, stays here.' "

It makes me wonder whether this is the public's LVCVA -- or R&R's.