LVCVA board members have ties to ad firm

Monday, July 11, 2005 | 10:45 a.m.

There's something that doesn't smell right to Craig Walton about the Las Vegas Convention and Visitors Authority agreement to transfer the rights to the potentially lucrative slogan "What happens here, stays here" to its advertising agency.

Walton, emeritus professor of ethics and public policy at UNLV and president of the Nevada Center for Public Ethics, is Southern Nevada's most often quoted authority on government ethics.

He thinks the November agreement between the LVCVA and R&R Partners Inc. of Las Vegas is bad public policy because it assigns all potential profit to the ad agency, even though the slogan was work R&R developed for the tourism authority. And most of what the LVCVA pays for work product comes from hotel and motel room taxes.

"It seems that since the work was done under a contract for the authority that the work belongs to the people who paid for it," Walton said. "It is something the LVCVA bought and paid for. You're dealing with public money."

Las Vegas Mayor Oscar Goodman, chairman of the LVCVA board, placed the trademark transfer agreement on Tuesday morning's board meeting agenda and has promised that there would be no "whitewash" of the issue.

That was after the Sun last month revealed the existence of the agreement, which was signed secretly by LVCVA President Rossi Ralenkotter and R&R Chief Executive Billy Vassiliadis without the board's knowledge. The deal, signed on Nov. 9, the same day the board gave Ralenkotter permission to assign intellectual property rights, was back-dated to Jan. 1, 2004.

Ralenkotter and Vassiliadis both have said that the agreement was signed to give R&R a better standing to defend the slogan in court. R&R is the plaintiff in an ongoing federal lawsuit against a California clothier that the ad agency has accused of trademark infringement through use of the slogan "What happens in Vegas stays in Vegas."

Vassiliadis has also said that he would not allow R&R to profit from the slogan, which was first used in advertisements in 2003, even though the agency has applied for a federal trademark to use the slogan on clothing and other souvenirs.

Vassiliadis said it's possible that the slogan could be merchandised out to a subcontractor, but he said R&R would not profit off any such deal.

But the agreement raises several questions:

Why didn't the LVCVA apply for a federal trademark back in 2003 when it became clear that the slogan was becoming immensely popular?

How is it that the LVCVA -- whose fiscal 2005 budget of $190.1 million in revenue is by far the largest for an American tourism authority -- doesn't believe it can defend the "What happens here" slogan when other tourism bureaus with far smaller budgets retain the rights to their slogans and fight their own fights?

If the trademark transfer agreement was simply a legal maneuver to protect the slogan in court, why did Ralenkotter and Vassiliadis wait until eight months after R&R filed the lawsuit in March 2004 to sign the agreement?

R&R and the LVCVA have a relationship dating to 1980, and questions about the agreement have been dismissed by some because of what has been described as a long, trusting relationship.

At least six of the 14 members of the LVCVA, including a new member who will be sworn in at the meeting, have ties to R&R Partners because of the Las Vegas agency's extensive reach into the worlds of marketing, legislative lobbying and political campaigning.

Walton said each of those members should disclose those ties at the meeting. But he stopped short of saying that they should recuse themselves from voting.

"I would disclose any relationship with R&R," Walton said. "If you are going to abstain, stay out of it. But if you are going to vote, state your reason. You have to make the decision from the point of view of a reasonable person with independent judgment."

One member who joined the board last month, MGM Grand executive Chuck Bowling, has ties by virtue of the fact that parent company MGM Mirage is one of R&R's clients.

Four other board members -- Boyd Gaming Corp. President Keith Smith, Hard Rock Hotel President Kevin Kelley, Harrah's Entertainment Inc. executive Tom Jenkin and Station Casinos Inc. executive Glenn Christenson, who will be sworn in on Tuesday -- all belong to companies that are members of the Nevada Resort Association. Vassiliadis is one of the association's chief legislative lobbyists.

"Unitl I look at it I won't have any comment," Christenson said of the agenda item.

Vassiliadis also gave a $2,000 campaign contribution last year to Clark County Commissioner Tom Collins, who also serves on the LVCVA board.

"If someone is helped with getting elected, that's obviously a tie," Walton said.

Attempts to interview Vassiliadis, Bowling, Smith, Kelley and Jenkin were unsuccessful.

But Collins, a board member since January, said that since he disclosed the contribution on his campaign report he does not see the need to disclose it again at the meeting. And he said the contribution made up only a small part of the nearly $800,000 he raised for his successful 2004 campaign.

As for the trademark transfer agreement, Collins said: "I won't have a problem with it unless the experts at the meeting say there is one. R&R is not going to jeopardize its reputation over one of these trademark things."

Stacy Jennings, executive director of the Nevada Ethics Commission, declined to comment on whether any of the LVCVA board ties to R&R constitute a conflict of interest. But she said the state ethics law includes disclosure provisions covering continuing business relationships.

No such ethics complaints have been filed against the LVCVA, which promotes Las Vegas mostly through funds generated by hotel and motel room taxes.

In 2002 the ethics commission found that J. Phillip Keene III, former president and chief executive of the Reno-Sparks Convention and Visitors Authority, violated ethics laws by charging personal expenses on RSCVA credit cards, misusing a cellular phone and failing to promptly return unused travel advances. He was not fined.