Officials at the Las Vegas Convention and Visitors Authority complain that legal challenges to their expansion plan have thrown the construction project behind schedule. Since steel and labor costs have been going up in the interim, those delays may already have cost the authority $10 million, according to LVCVA attorney Luke Puschnig.
The authority board -- including Las Vegas Mayor Oscar Goodman and Clark County Commissioner Mary Kincaid -- blames those delays on what they consider to be a "frivolous" lawsuit filed by Sheldon Adelson of the Sands Expo center, the convention center's private competitor.
Of course, if Mr. Adelson's suit was "frivolous," one might have expected the judge who heard the case to throw it out on those grounds when asked to do so. But he did not. While the authority eventually won the case in District Court -- it's being appealed -- the judge obviously thought Mr. Adelson raised enough substantive points to proceed.
Mr. Adelson, who also owns the Venetian hotel and casino, contends among other things that the failed attempt to issue $150 million in revenue bonds to fund the expansion project was improper, because the bond issue was not put out for competitive bids.
Taking all this into account, the LVCVA board of directors voted unanimously Dec. 14 to authorize authority Executive Director Manny Cortez to hire lawyers to counter-sue Mr. Adelson and The Venetian.
The relief sought will be not only the actual costs which the authority believes have been caused by the delays. "We will also be seeking exemplary and punitive damages as a result of intentional conduct," Mr. Puschnig informed his board.
"It's your belief that we would like to set a precedent that these types of frivolous lawsuits as we see it will not be tolerated by the board in the future?" board member William McBeath asked Mr. Cortez.
"Well that, certainly," Mr. Cortez responded.
The Las Vegas Convention and Visitors Authority isn't "just any business." Since the LVCVA is a tax-funded entity, Mr. Adelson has as much right as any taxpayer to challenge the authority to defend its use of tax money. Lawsuits like the one now contemplated -- transparently designed to make it darned expensive to question or criticize this government agency -- are clearly intended to chill future criticism of the government agency. They will even use (start ital)taxpayer funds(end ital) to haul Mr. Adelson into the tax-funded courts to do so!
(In a typical piece of casuistry, the authority's defenders contend most of their revenue comes from room taxes, which aren't "real taxes" since they're paid by tourists and not "locals." In fact, room taxes are paid by local hotels, leaving them less money to pay out in wages. There is a maximum room charge tourists can be assessed before they stay away -- as many Las Vegas hotels managed to prove by foolishly overpricing their New Year's packages this year. Room taxes cannot be added to that maximum; they must be deducted from it.)
Nor has the authority board made any secret of its "chilling" intention. A transcript of the Dec. 14 meeting shows Ms. Kincaid worrying: "I just am concerned ... what kind of precedent it will make. Whether it will be something, that is, of someone would be afraid. Well, we'd like people to be a little more afraid to file lawsuits against us. But I wouldn't want to make it where someone, make it a precedent where someone else might have a very legitimate case would file a suit and we would be prohibiting them from doing just that."
Yet, in the end, Ms. Kincaid joined in the unanimous vote to do just that.
Mr. Adelson's criticisms are that the LVCVA, bloated with its tax subsidies, operates with an inefficiently high overhead, loses money, and disguises through divided bookkeeping the actual amount of cash it hemorrhages. He then goes on to assert that offering $150 million in taxpayer-backed revenue bonds without going out to competitive bids is an inappropriate way to fund new construction.
Further, Mr. Adelson asserts, to bring down the apparent cost of their project the LVCVA has attempted to "pre-sign" major conventions at rates so low that the arrangement virtually guarantees the authority would (start ital)continue(end ital) to hemorrhage tax subsidies indefinitely, since they will have committed virtually all their available dates to such money-losing arrangements.
Are Mr. Adelson's charges true? I don't know. But as a tax-funded entity, the responsibility of the LVCVA board is to make sure such charges are thoroughly investigated and publicly answered -- especially when brought by someone as knowledgable about this industry as Sheldon Adelson -- not to use more taxpayer funds to drag him into court in an attempt to shut him up.
Vin Suprynowicz is assistant editorial page editor of the Las Vegas Review-Journal. His new book, "Send in the Waco Killers: Essays on the Freedom Movement, 1993-1998," is available by dialing 1-800-244-2224; or via web site http://www.thespiritof76.com/wacokillers.html.
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Vin Suprynowicz, vin@lvrj.com
"The evils of tyranny are rarely seen but by him who resists it." -- John Hay, 1872
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