Editorial: Kickbacks kicking back

Wednesday, June 15, 2005 | 9:13 a.m.

Decades ago managers of Las Vegas strip clubs resigned themselves to forever paying off cab drivers who brought free-spending patrons to their establishments. It was a cost of doing business. The tight-fisted strip club manager who refused to participate in the unsavory practice soon found himself at a competitive disadvantage. Twenty years ago both the city of Las Vegas and Clark County intervened. They each passed ordinances forbidding the strip clubs from making the payoffs.

Overnight, the practice stopped. Yeah, right.

In reality, drivers' hands continued reaching out for the per-passenger kickbacks and were continually stuffed with the going rate. So ingrained were the kickbacks in the symbiotic world of cabs and strip clubs that no real enforcement of the ordinances was ever undertaken. Today the minimum rate is $20 per passenger.

This illegal padding of cab drivers' incomes would still be a low-profile fact of life in the big city had it not been for a surprise amendment passed by the 2005 Legislature in its closing hours. Assemblyman John Oceguera, D-Las Vegas, proposed the amendment, which bans cab drivers statewide from accepting kickbacks from strip clubs or any other destination requested by their passengers. The amendment infuriated cab drivers, who protested Thursday night by driving slowly from the Strip to downtown, backing up traffic the whole way. Cab drivers have signed a petition asking for an investigation of how the amendment came to be, and they have talked of striking -- an action that could blister Las Vegas' tourism economy.

We opposed the amendment, not so much because of its content, but because of how it was so sneakily introduced and passed. There were no hearings that could have addressed the bill's singling out of cab drivers, when drivers of limousines and shuttle buses also reach out to businesses for gratuities. Gov. Kenny Guinn also criticized the way the amendment was passed, and he has vetoed it.

Amid all the uproar, Clark County last week suddenly began enforcing its ordinance by sending letters to strip clubs, ordering them to cease the kickbacks or face having their liquor licenses revoked. The county has since retreated from that aggressive stance. It plans to hold off on enforcement until there is consensus among the state and local governments about just how to approach the issue.

In our view, the county and city made a big mistake in not enforcing their ordinances after they were first passed. But sudden enforcement, after a 20-year hiatus, would also be a mistake. The state has jurisdiction over cab drivers and the county regulates the strip clubs. The county should notify the strip clubs of a date that enforcement will begin -- and stick with that date even if drivers threaten retaliation. And the Legislature, at its 2007 session, should consider a properly reviewed bill affecting not only cab drivers, but also limousine and shuttle bus drivers.