Stipulated Facts. At all material times relevant to the allegations in this matter, the Commission and ▇▇▇▇▇▇▇▇▇▇▇ agree to the following facts:1 ▇. ▇▇▇▇▇▇▇▇▇▇▇ was the LVCVA President and Chief Executive Officer (“CEO”). b. The CEO is appointed by and responsible for carrying out all policy directives of the LVCVA Board, including marketing, operation of facilities, human resources, finance and public affairs. c. The LVCVA is a statutorily created public entity responsible as the destination marketing organization for Las Vegas to promote tourism, conventions, meetings and special events throughout Southern Nevada. It operates one of 1 Stipulated Facts do not constitute part of the “Investigative File” as that term is defined by NRS 281A.755. All statutory and common law protections afforded to the Investigative File shall remain and are not affected by this Stipulated Agreement. the largest convention facilities in the world and competes for visitors with the largest visitor destinations in the world. d. The LVCVA is a governmental entity subject to Nevada’s Open Meeting Law (NRS Chapter 241), Public Records Law (NRS Chapter 239) and Ethics Law. e. The LVCVA obtains its funding, in part, from a percentage of hotel taxes and fees in Southern Nevada. Its primary goal is to increase tourism in the region for economic development purposes. f. The LVCVA is governed by a 14-member Board comprised of 8 elected officials representing the municipalities and counties in Southern Nevada and 6 representatives from the private sector. g. The LVCVA maintained Board Policies, which included Policy 8.01 - Code of Conduct and Conflicts of Interest Policy (the “Policy”). The Policy in effect during the relevant time period required compliance with the Ethics Law and states that LVCVA’s directors, officers and employees shall work for the common good of the public that LVCVA serves and not for any private or personal interest. The Policy also prohibited LVCVA’s directors, officers and employees from using their office or position for unlawful purposes or personal gain, including seeking or accepting gifts, services, favors, employments, engagements, emoluments or economic opportunities that would improperly influence their public duties; using their position in government to secure unwarranted privileges for themselves or persons to whom they have commitments in a private capacity; or using governmental property to benefit their personal or financial interests. h. Part of the LVCVA’s mission is to develop and maintain relationships with airlines to expand and improve air service to Las Vegas and to increase visitation and hotel occupancy. To support that mission, the LVCVA purchased and received promotional gift cards and certificates annually to be used for business purposes from several airlines, including Southwest Airlines. i. The LVCVA had an in-house travel agency operated by LVCVA staff that booked all business travel for LVCVA employees and Board Members, and also booked personal travel for certain LVCVA executives and family members. j. In early 2017, the LVCVA’s Finance Department became aware that the LVCVA was receiving and in possession of Southwest Airline gift cards. k. After the Southwest Airline gift cards were discovered, the Finance Department took possession of approximately $14,000 of Southwest Airline gift cards into its custody and thereafter maintained custody of the gift cards. l. When the Southwest Airline gift cards were discovered, the Finance Department learned there was no system for tracking and recording the distribution or usage of the Southwest Airline gift cards. m. In late 2017, ▇▇▇▇▇’s General ▇▇▇▇▇▇▇ learned that certain personal travel for ▇▇▇▇▇▇▇▇▇▇▇ and his spouse had been purchased with the LVCVA’s Southwest Airline gift cards. n. In February 2018, LVCVA’s General Counsel informed the Chair of the Audit Committee of the LVCVA Board of the discovery of the personal travel purchases for Ralenkotter and his spouse with LVCVA-funded Southwest Airline gift cards. o. The Audit Committee retained ▇▇▇▇ ▇▇▇▇, Esq. (“▇▇▇▇”) to investigate the matter and ▇▇▇▇ retained ▇▇▇▇ ▇▇▇▇▇▇ to perform forensic accounting services regarding any personal use of LVCVA’s Southwest Airline gift cards by LVCVA personnel. Ralenkotter fully cooperated with this forensic accounting investigation. ▇. ▇▇▇▇ ▇▇▇▇▇▇ prepared a June 8, 2018 Forensic Accounting Report (“Report”), which was presented to the LVCVA Board of Directors during a June 12, 2018 meeting. q. The Report revealed that the LVCVA purchased a total of 612 Southwest Airline gift cards totaling $90,000 with LVCVA funds between 2012 and 2017. The documentation and invoices regarding LVCVA’s purchases of the Southwest Airline gift cards did not identify the purchases as gift cards and, instead, designated the purchases as related to promotional activities/events such as “Summer Travel Programs,” “Deck Parties,” and “Sponsorship and Planning Summits.” ▇. ▇▇▇▇▇▇▇▇▇▇▇ knew that the LVCVA possessed the Southwest Airline gift cards. Ralenkotter believed the gift cards were part of the negotiated package of assets the LVCVA received for providing sponsorship funds to Southwest Airlines. s. The Audit Report revealed that personal/non-business travel totaling approximately $17,000 was booked through the in house LVCVA travel office for ▇▇▇▇▇▇▇▇▇▇▇ and his family members and paid for with Southwest Airline gift cards. t. The Report also revealed that gift cards were redeemed for appropriate business-related travel totaling $19,979.81. The Report did not make any findings whether ▇▇▇▇▇▇▇▇▇▇▇ knew about or directed the use of LVCVA funds to purchase the Southwest gift cards. u. The Report acknowledged that approximately 200 Southwest Airline gift cards (worth $50,000) could not be accounted, and the Report provided no explanation for how the missing gift cards might have been used. Pursuant to records provided by Southwest Airlines, the LVCVA purchased 480 Southwest gift cards between 2014 and 2017, totaling $68,000. Southwest did not retain records related to approximately 132 gift cards purchased by LVCVA between 2012 and 2014. v. The records provided by Southwest Airlines revealed that at least seven of the Southwest Airline gift cards purchased with LVCVA funds were used for personal travel by other LVCVA employees not identified in the Audit Report, including members of the LVCVA executive team. ▇▇▇▇▇▇▇▇▇▇▇ gave these gift cards (each valued at $200) to the employees as gifts. w. The LVCVA maintained an Employee Handbook that summarized the policies and programs of the agency applicable to its employees. The August 2012 and December 2015 versions of the Employee Handbook included a “Business Ethics” section that contained the following language, in relevant part: “Employees may not use, divert, or appropriate Authority property, equipment, services, or assets for personal use or benefit.” x. The September 2016 version of the LVCVA Employee Handbook included an expanded “Business Ethics” section that contained the following language, in relevant part: Employees are prohibited from taking personal opportunities that are discovered through the use of corporate property, information or position without approval. Employees may not use corporate property, information or position for personal gain. 1. Employees should protect the LVCVA’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the LVCVA’s profitability. All LVCVA assets should be used for legitimate business purposes. 2. LVCVA resources may be used for minor personal uses, as long as such use is reasonable, does not interfere with duties, is not done for pecuniary gain, does not conflict with the LVCVA’s business, and does not violate any LVCVA policy. y. The LVCVA maintained Board Policies, which included Policy 2.02 – Responsibilities of President and CEO. One responsibility of the President/CEO listed in Policy 2.02 was to “[e]nsure that LVCVA policies are uniformly understood and administered by his/her subordinates.” z. In response to the audit findings, ▇▇▇▇▇▇▇▇▇▇▇ reimbursed the LVCVA for the total value of the Southwest gift cards he used for his private use. aa. Also, in response to the audit findings, the LVCVA implemented new policies to clarify the procedure for using travel gift cards provided to the LVCVA, and to prevent use of gift cards for personal travel in the future. bb. During an LVCVA Audit Committee Meeting on April 25, 2018, ▇▇▇▇▇▇▇▇▇▇▇ acknowledged his unintentional misuse of the Southwest gift cards, recognized that LVCVA lacked proper procedure regarding these assets, and assured the Audit Committee that policies had been implemented to ensure the proper use of such assets in the future. cc. Later, during a Board of Directors Meeting on June 12, 2018, Secretary ▇▇▇▇ ▇▇▇▇▇▇ thanked the Audit Committee and independent counsel for their work, recognized ▇▇▇▇▇▇▇▇▇▇▇ for accepting responsibility for his unintentional misuse of the gift cards, and noted that ▇▇▇▇▇▇▇▇▇▇▇ lacked awareness regarding the purchase of the gift cards. dd. Between approximately April 2018 and August 31, 2018, LVCVA and ▇▇▇▇▇▇▇▇▇▇▇ publicly discussed ▇▇▇▇▇▇▇▇▇▇▇’▇ intentions to resign from the LCVA after more than 45 years with the agency and develop a succession plan with a new CEO. LVCVA and Ralenkotter were publicly transparent about intentions to seek a separation agreement with Ralenkotter which would include an on-going consulting agreement with LVCVA to transition to the new CEO. ee. Both the LVCVA and ▇▇▇▇▇▇▇▇▇▇▇ retained independent counsel to handle the consulting agreement negotiations. ff. LVCVA posted a public meeting agenda with backup staff materials and recommendations for its anticipated August 14, 2018 Board Meeting, which included a purported separation agreement and future consulting agreement between LVCVA and Ralenkotter. The proposed separation agreement included his anticipated PERS pension. gg. During the August 14, 2018 Board Meeting, the LVCVA Board approved the recommended separation agreement and future consulting agreement with Ralenkotter, through his private limited liability company, GoGaels, LLC. As part of the consulting agreement, LVCVA agreed to pay Ralenkotter a flat rate of $15,000 per month for 18 months for Ralenkotter’s services consulting on various projects and issues affecting LVCVA during the transition to the new CEO. The separation agreement and future consulting agreement were approved by the Board. hh. ▇▇▇▇▇▇▇▇▇▇▇ was still employed as the CEO of LVCVA during the time the consulting agreement was negotiated and executed, to be effective the day after his retirement on September 1, 2018.
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Sources: Stipulated Agreement, Stipulated Agreement