LVCVA executive bought travel gift cards in secret
A former Las Vegas Convention and Visitors Authority executive hid the purchase of $90,000 in Southwest Airlines gift cards in records at the agency, an audit report shows.
In funding requests between 2012 and 2017, Brig Lawson, senior director of business partnerships, said the money was for promotional events and did not disclose that it was for the gift cards, the report shows.
Lawson also instructed Southwest employees to submit invoices to the publicly funded convention authority without mentioning the purchases were for the cards.
“Discussions with management indicate the gift cards were purchased with LVCVA funds by check and recorded as a promotional expense in accounting records,” the report states.
Auditors could not account for more than $50,000 of the cards, and they learned that longtime CEO Rossi Ralenkotter and his wife used $16,207 in cards for personal travel.
In a 2013 email conversation, Lawson told a Southwest employee to provide an invoice identifying a $12,000 gift card purchase as a special travel program.
“Can’t pull the invoice, but the request for invoice had this: Summer Travel Program Sponsorship,” the Southwest employee wrote. “Would you prefer it say this and not gift cards?”
Lawson responded, “Yes…that’s perfect.”
The report shows that Lawson submitted a request for $54,000 in 2015 to sponsor a Southwest event, but he did not mention that $12,000 of those funds were for buying airline gift cards. Emails reviewed by auditors show the budget for the hanger event was only $42,000.
A second $15,000 gift card purchase from Southwest in 2015 was described as a “planning summit,” the report shows.
In 2017, Lawson told a Southwest employee in an email that the invoice for a $14,000 gift card purchase needed to say “Sponsorship: 2017 Southwest Airlines Deck Event,” according to the audit report.
Ed Finger, the convention authority’s chief financial officer, told auditors that Southwest officials indicated they did not keep records of any gift cards issued to the agency.
“As of the date of this report, we have made no additional inquiries to Southwest to determine if this information may become available at a later date,” auditors said in the report.
Southwest Airlines spokesman Dan Landson declined to comment on Monday.
Auditors also discovered that there was little agency tracking of the gift cards.
Bill Noonan, who chairs the convention authority board’s audit committee, ordered the audit amid a Review-Journal investigation into the agency’s spending and perks for board members and staff.
The Review-Journal had requested employee gift and travel records months before the original gift card disclosure in 2017, but the authority did not provide any records of the airline cards. It maintains there was no process in place at the time to track use of the cards.
Personal use
Ralenkotter and his wife used the Southwest gift cards on a combined 56 trips to several cities, including Burbank, Calif., Chicago, Phoenix, San Diego and San Francisco, the report says.
Ralenkotter, who has stepped up retirement plans, has apologized for his actions and paid back the money to the agency. The cards can no longer be used for personal travel.
The report does not address whether any other authority staff knew the agency had bought the gift cards.
“I believe (Lawson) hid it from the CEO as well,” Noonan said. “I don’t believe Rossi Ralenkotter had a clue at all.”
Jean Burnett, the authority’s travel coordinator, told auditors that Ralenkotter directed her to “use Southwest gift cards to pay for personal travel and that some of the gift cards were kept in Ralenkotter’s top desk drawer.”
Lawson, who resigned as auditors finalized their review, admitted to auditors that he gave the cards to Ralenkotter, but was unaware Ralenkotter used them for personal travel.
Lawson could not be reached for comment Monday, and convention authority spokeswoman Jacqueline Peterson has declined to discuss his resignation, calling it a personnel matter.
Ralenkotter and Peterson on Monday declined to discuss the latest findings in the audit report.
Auditors said they were unable to determine whether $50,188 in cards were used for personal or business travel.
Nearly $20,000 of the $90,000 in cards went toward legitimate business travel, the report says.
Lawson purchased a total of 612 cards valued at $50, $100 and $200 between 2012 and 2017, the report says.
The 14-member authority board is expected to take up the audit report at its monthly meeting on Tuesday.
Following preliminary audit findings last month, the board approved several recommendations to curb the abuse, including storing the cards under lock and key, requiring written approval of any card requests and recording receipts.
In April 2017, the newspaper’s review of financial records over three years showed lavish expenses on high-end entertainment, gifts for employees and first-class trips overseas for board members.
The newspaper also found convention security officers were providing rides to Ralenkotter and former Las Vegas Mayor Oscar Goodman, who was paid $72,000 a year to serve as the agency’s tourism ambassador. Other records revealed lax controls over iPads, speakers and other warehouse items handed out as gifts.
Ralenkotter, 71, who has headed the high-profile tourism agency since 2004, has been preparing to retire after a year of battling cancer and criticism of the agency’s misspending and cozy relationship with board members.
Authority financial executives learned of the Southwest gift cards between January and February 2017, but it took more than a year to get that information to the board, according to the audit report.
Finger, the chief financial officer, was informed on January 31 of this year that Ralenkotter and others had used the cards for personal trips. Days later, Noonan, the audit committe chair, ordered the review.
In their three-month examination of the cards, auditors searched more than 51,000 emails of 13 staffers, including Lawson, Ralenkotter and Cathy Tull, the chief marketing officer.
The trio was among a half-dozen people, including the agency’s counsel, Luke Puschnig, who were interviewed by auditors.
The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson. Las Vegas Sands Corp. operates the Sands Expo and Convention Center.
Contact Jeff German at jgerman@reviewjournal.com or 702-380-4564. Follow @JGermanRJ on Twitter.
