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Oct. 10, 2007
Copyright © Las Vegas Review-Journal

RESORT REMODELING: Oversight defended

Official rebuts criticism of review of work at Rio, Harrah's Las Vegas

By JOAN WHITELY and ARNOLD M. KNIGHTLY
REVIEW-JOURNAL

People pass Harrah's Las Vegas on Tuesday. Rooms and suites in the hotel were closed Monday evening by Harrah's Entertainment amid a review of whether remodeling was done with proper permits.
Photo by Gary Thompson.



Harrah's Entertainment executive Jan Jones on Tuesday discusses company investigations that have closed rooms at Harrah's Las Vegas and the Rio. Jones says any problems with remodeling work at the company's properties appear to be limited to those two resorts.
Photo by Gary Thompson.

Clark County Manager Virginia Valentine attempted Tuesday to defuse two controversial aspects to the county's handling of remodeling projects at Harrah's Entertainment properties. Questions about those projects have led to the closure of hundreds of rooms at Harrah's Las Vegas and Rio.

Asked why the inspector who had signed off on a cursory February inspection of the Rio is now involved in the county's reopened investigation, Valentine said Rick Maddox has a lot of knowledge about the property because it falls in his geographic territory.

Asked whether Maddox might be biased, the county manager said Michael Bracy, another supervising building inspector, is present at all times. The two are monitoring what the contractor hired by Harrah's Entertainment is doing to expose or test the remodeling work done in the Rio's Ipanema tower from floors three through 19. Currently 140 rooms on two floors of the Ipanema are out of service indefinitely.

Up to four county inspectors have been onsite at the Rio when specialized construction expertise was called for, Valentine added.

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    • Valentine on Monday also denied that she has a close friendship with Harrah's executive Jan Jones who has been fielding the media questions about the room closures.

    Jones is a former mayor of Las Vegas and Valentine is a former city manager.

    "I knew her professionally," Valentine said. "I maybe have spoken to Jan Jones once a year, for the last few years."

    Their tenures barely overlapped at the city. According to Valentine, after she accepted the city job but before she started, Jones declared her candidacy in the 1998 Nevada governor's race, which was won by Kenny Guinn.

    Valentine left the city of Las Vegas in May 2002, becoming an assistant Clark County manager in October 2002, and the county's top administrator in July 2006.

    Valentine said it was prudent for the gaming company to voluntarily close rooms at Harrah's Las Vegas on Monday, after an internal investigation revealed several remodeling projects were done without getting proper permits.

    The gaming company shut down nearly 510 rooms and 27 suites at Harrah's Las Vegas.

    County and Harrah's officials met late Tuesday morning to discuss how to stage a joint investigation, similar to the one now in progress at the Rio, where the resort closed the rooms by county order.

    Phil Rosenquist, an assistant county manager, said executives of the gaming company told the county they decided on the abrupt Harrah's Las Vegas closure, in part, by "examining (filed building) plans in relation to what exists" on the property.

    Rosenquist also said executives indicated they are trying to establish what remodeling work took place by "going back to corporate records on capital expenditures" for such things as building materials or guest-room fixtures.

    In an interview Tuesday, Jones emphasized that the company has identified problems at only two of its Las Vegas properties and expects to find nothing more.

    "We believe, and our investigation has found, these incidents appear to be isolated to the two floors at the Rio and the 500-plus rooms at Harrah's Las Vegas," she said. "We are fairly confident we have identified the rooms, and they are isolated to the Rio and Harrah's."

    Despite the large number of rooms that have been closed, Jones said, the gaming company has not laid off any workers. She also noted that Harrah's has some 25,000 rooms on the Strip and will be able to move housekeeping and other workers to its other local properties: Caesars Palace, Paris, Bally's, Flamingo, Imperial Palace and Bill's.

    Jones said the remodeling problems have captured the attention of company Vice Chairman Chuck Atwood and Chairman and Chief Executive Officer Gary Loveman, who was out of town Tuesday and who has not publicly commented on the remodeling problems yet.

    "Gary Loveman takes very, very seriously his role in being the leader of integrity for Harrah's Entertainment," Jones said.

    Atwood is overseeing the internal investigation into the matter and is working with corporate counsel on the independent investigation.

    The problems are also drawing the attention of gaming regulators, who are tentatively scheduled to consider a $17.1 billion bid by Texas Pacific Group and Apollo Management to take Harrah's private at their December meeting.

    Texas Pacific Group declined again Tuesday to comment on the situation, and Apollo could not be reached for comment.

    State Gaming Control Board member Randall Sayre said Harrah's executives are cooperating with gaming regulators and, in fact, contacted him before Monday's decision to close the rooms at Harrah's Las Vegas.

    However, Sayre said the room closings and the buyout are separate issues and the remodeling problems should not have a major effect on deciding the suitability of the deal.

    Gaming Control Board Chairman Dennis Neilander and member Mark Clayton are in Chicago this week attending the International Association of Gaming Regulators conference and could not be reached for comment.

    Sayre said when the investigations by Harrah's, the county and independent investigators are completed, the control board might look at any possible culpability by Harrah's or its executives and decide whether appropriate action is necessary from a regulatory standpoint.

    The gaming company and the state regulators might not be the only ones awaiting the final reports.

    The state attorney general's office says it's up to local authorities to investigate potential criminal aspects to the remodeling problems.

    Nicole Moon, a spokeswoman for state Attorney General Catherine Cortez Masto, said her office has launched investigations against businesses based on complaints from individuals or agencies, such as the federal Occupational and Health Safety Administration.

    "At that point, we may be able to do criminal charges" against Harrah's, Moon said. "It's way too early to say."

    But Moon added that local and county authorities have primary jurisdiction in the matter.

    Nevada Deputy Attorney General John McGlamery, who heads the agency's consumer protection bureau, said his office doesn't normally get involved in matters such as these.

    "If it's a situation where a casino cut corners, local and county agencies would be the main arbiter," McGlamery said.

    But McGlamery said local and state officials could examine, among other things, whether Harrah's used unqualified workers for renovation projects or whether the safety of workers was jeopardized by conditions at a hotel.

    At that point, he said, they could decide what, if any, criminal statutes apply.

    Nevada law allows criminal penalties against hotel operators for violating safety in the "regulation of construction or reconstruction of (a) hotel or other establishment for transient lodging." Each day that a hotel is in violation constitutes a separate misdemeanor offense, according to Nevada Revised Statutes.

    But two Clark County agencies say it's not their job to investigate, either.

    "Our office is not staffed to investigate criminal matters. Rather, we receive requests for prosecution from local law enforcement once they have completed their investigations," said Christopher Lalli, head of the criminal division of the Clark County district attorney, by e-mail Tuesday to Fred Frazzetta, a whistle-blower in the expanding remodel crisis for Harrah's Entertainment. Frazzetta was a temporary electrician on the Rio remodel.

    "Enough is enough. It is time for you to step in, or if there is a conflict of interest, have the Attorney General's Office open an investigation," whistle-blower Frazzetta had written Lalli earlier Tuesday.

    The potential conflict of interest refers to the fact the civil division of the district attorney office is legal counsel to Clark County Development Services.

    But the hands of Las Vegas police are also tied, according to police spokesman Jose Montoya.

    "I'm not sure that we would get involved. It's not a criminal act. It's more a civil act," Montoya told the newspaper last week. He did not change his response when asked whether remodel managers for Harrah's Entertainment should have known to seek permits, and might have covered up faulty work.

    The county investigation of the Rio led to closure of two floors for remodeling that bypassed county safety procedures. One county official says the Rio failed to adequately protect holes between floors so smoke won't spread during a fire.

    Development Services in February had cleared the Rio of alleged remodeling without permits or inspection after a superficial one-day review.

    But the county department reopened the investigation in late September, after the Review-Journal researched allegations by Frazzetta, who had filed a complaint with Development Services on deficiencies in the Rio remodel in August 2006.

    Review-Journal writer Alan Maimon contributed to this report. Contact reporter Joan Whitely at jwhitely@reviewjournal.com or (702) 383-0268. Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or (702) 477-3893.



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    Tom wrote on October 13, 2007 12:39 AM: We were staying at Harrahs from the 2nd to the 11th,had a great day Monday seeing Hoover dam wandering the strip.Got back to our room at 10 pm and found a notice stuck on the door, please contact front desk,before we could do that had a security guard knocking on the door telling us we are to be moved to another room.Got moved to Imperial Palace a room 50 feet above Carnival Court,It did not take long to realise this was a downgrade,complained at desk,was told we could not be moved till Tuseday,did not get to sleep till gone 3 am because of the noise from Carnival Court. 8 am Tuesday got woke with a fire alarm,rushed down stairs to the lobby to be told it was a false alarm.Complained at Harrahs desk was told they would give us a full refund,
    when we asked for a printout of our full refund the printer was broke ???
    Was moved to another room Tuesday and got some sleep. Can anyone answer these questions? Was we in any danger at Harrahs,Why was we downgraded,Will we get any money back and who's in the wrong. We are home now 5000 miles away and not holding out much hope of getting our money back.We enjoyed Vegas an amasing place,but costomer care a bit lacking in the hotels.


    Jason wrote on October 11, 2007 01:15 AM: This shooter in the conneticut school shooting was a vitcim of racisim and bullying, but you wont hear about that due to political correctness. When are you poeple going to learn that you can't go around bullying and picking on people and not expect consequences, I was bullied in school and I dropped out because of it, in fact I was going to blow up a school because no one cared to solve the problem. Well my parents had to get a high paying lawyer to get me out of serious trouble, but since I was a minor not much could be done. I was 17 at that time and am 36 now, WAKE UP PEOPLE, stop hurting peoples feelings, some people can't handle bullying and being picked on. This is another strong case for the 2nd amendment.


    brad wrote on October 10, 2007 08:05 PM: Rebuts criticism ?? Only sounds like this official and a lot of others got caught with their pants down..I guess Harrahs didn't pay them a big enough of a bonus, or the comps weren't good enough. Most of the officials in Clark county all have their hands out when it comes to the casinos, and only a fool wouldn't realize it. For that matter even the police pull up all times of day and eat for free and hang out. I don't know why most residents of Clark County find this so shocking, it is just another beautiful day in Vegas, and it is business as usual.....


    yawn wrote on October 10, 2007 06:39 PM: This whole thing is actually starting to look bad for the RJ...they have done this 2 month investigation and have come up with nothing other than poorly fire caulked holes. Which Harrah's employees aren't even responsible for...that job was contracted out to a highly respected construction company. Now they are trying to insinuate that the rooms at Harrah's are unsafe...plz, the only reason the permit issue has come up is because the rooms were remodeled at breakneck speeds. Nobody on the strip ran a job as efficiently as Harrah's does when it comes to construction. The rooms are 100% safe and have all passed inspection. The RJ needs to get their sh** together, I cant believe what passes for journalism these days.

    Does Fred Frazzetta have anything better to do with his life? He has a personal vendetta with a Harrah's employee and now he is crying sour grapes...pathetic. This isn't the first time he has done this either, just ask his former employers.


    TOURIST wrote on October 10, 2007 05:58 PM: As a tourist, why would I dare stay at a hotel or with a company that could care less for my safety and well-being.

    I'm saying NO to bringing my family to Vegas and staying at any HARRAHS ill operated hotel/casino!


    Rodman88 wrote on October 10, 2007 04:14 PM: Three factors are at work here. 1.) It is easier to get forgiveness than permission. In other words do the work and if we get caught we will appeal to the proper sympathetic people. 2.) Everybody is ducking and running to cover their ass. Everone involved in this deal should be fired period. 3.) Just one more we are a hotel and we own this town and we will do what we want as far as construction/permits apply, hiring illegals, and telling the city and county how valuable they think they are and will be accountable to no one. It is time for the voters to wake up and elect people who are responsible and will run the city and county as it should be run.


    coverup wrote on October 10, 2007 03:16 PM: did I read this correct. Christopher Lalli you need to talk to your boss DA David Rogers because he hires private investergators all the time(David Glover) to look into certain issues, I guest it all depends who it is or maybe who it is not and who has the right amonnt of money and power to change things. The review Journal reporter has done a great job bringing this issue to light, keep it up. Don't let them snow you as they (DA, County, and casino) have in the past.

    "Our office is not staffed to investigate criminal matters. Rather, we receive requests for prosecution from local law enforcement once they have completed their investigations," said Christopher Lalli, head of the criminal division of the Clark County district attorney,


    kenodave wrote on October 10, 2007 02:47 PM: LOL! I love it! Harrahs is getting what they deserve. Their arrogance has been pronounced ever since Bill Harrah died and corporate America took over. You know very well our local leaders will do nothing but slap Harrahs on the hand for fear of being lambasted by Harrahs come election time. BUT, bad publicity from the media is killing Harrahs. Would you stay at a property that has bypassed safety regulations for the benefit of the bottom line? I think not, given there are many alternatives.


    dr wrote on October 10, 2007 01:49 PM: Harrah's corporate management are an arrogant bunch. Just ask anyone who has worked for them. Their attitude is act first and clean up the mess later. This does not surprise me at all. Las Vegas better wake up and start trying to hold these Mega-Corporations accountable.


    cover-up wrote on October 10, 2007 01:28 PM: The DA’s office is so quick to get involved in all other issues why not this one, the DA hires private investigator all the time, he was so quick to jump into the OJ issues instead of allowing the other deputy DA to deal with the issue, this is a cover-up on the part of the County, hotel, and DA, and I am sure this issues will be dropped and Mr. Fred Frazzetta will be labeled as a gad fly who has an issues with the hotel for some reason. I bet anything issue will fade, and the County will come back and say nothing was wrong, the DA will say we see no criminal issues, or civil issues, the hotel will we told you so. Give us a break this is major cover-up just read through the lines. Valentine and Jones cover-mode, conflict of interest for the DA's office and major cover-up. Ask for the phone records, meeting calendars, staff meetings on the issues and with whom, this will show who has talked to whom. I wish I was a fly on the wall to prove all the cover-ups going on this issue.
    The County is full of corruption and cover-ups When will it end?????? Next you will have Ralston adding to the cover-up for his friends Jones and Valentine. Cover-up, Cover-up, Cover-up.


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