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Arnold M. Knightly

County urged to probe Harrah's

19 March 2008

and Joan Whitely

LAS VEGAS, Nevada -- Fred Frazzetta, the non-union electrician who blew the whistle on illegal remodeling at the Rio hotel, encouraged Clark County commissioners to push Tuesday for "a thorough and complete investigation" of management at Harrah's Entertainment for wrongdoing and poor oversight during the illegal room renovations.

"What Harrah's Entertainment did, I feel, is criminal in every sense of the word," Frazzetta told the commissioners. "It was bad enough that Harrah's circumvented the permit system. It was unconscionable of Harrah's to have left the rooms they remodeled unsafe for guests and the employees of their hotels."

Frazzetta's statement came during the public comment period at the end of Tuesday's commission meeting. The commissioners had just received a report from the Clark County Building Department and the Clark County Fire Department on plans to implement improved oversight of inspections of commercial and residential construction and renovations.

Harrah's Entertainment issued a statement late Tuesday saying the company was "surprised to learn Mr. Frazzetta implied to the County Commission today that we haven't cooperated with the county and that Harrah's executives who were not involved in the renovation projects should be 'cited' for alleged illegal activity. Those suggestions are irresponsible and should erode any credibility Mr. Frazzetta has built up to this point."

The whistle-blower filed a complaint with the county building division in August 2006, alleging the Rio did significant remodeling, roughly from late 2004 to early 2006, without permits or inspections. A county inspector went out six months later to briefly investigate the complaint, and closed the file the same day.

Frazzetta on Tuesday asked Ron Lynn, who heads the county's building division, why citations have not been issued to top-level executives at the Rio and Harrah's Las Vegas, naming Rio President Marilyn Winn, Harrah's President Don Marandino or Gary Loveman, who is chief executive officer of Harrah's Entertainment, the hotels' parent company.

On Dec. 18, the county did issue 18 misdemeanor citations for problematic remodeling at the Rio, Harrah's and a warehouse. Named in the citations were Rio head of engineering David "Skip" Matthews and Harrah's Las Vegas chief engineer Robert Bruna.

On Feb. 5, the Clark County district attorney's office affirmed those citations by charging the two men with 17 misdemeanors.

Both men are scheduled to be arraigned in Justice Court on April 1.

Frazzetta contended during his comments that the two men were aware of the illegal remodeling projects and remained silent, but neither of them was directly responsible for bypassing the permitting process, he said.

Frazzetta also expressed concern over the refusal of Michael Kostrinsky, Harrah's Entertainment's chief litigation officer, to allow out-of-state consultant Michael Kessler to interview any employees. The consultant wrote in his report that Kostrinsky denied permission because "the county caused him problems with the (state) contractor's board, and thus he did not want to have to defend any other claims."

Commissioners hired Kessler, a New York consultant, to explore how the county handles complaints about commercial buildings, including Frazzetta's 2006 complaint about the Rio. The report, which was released last week, found severe shortcomings in complaint response time and record-keeping, as well as evidence of falsified records and uneven charging of fees for doing construction work without permits.

Clark County named Harrah's Entertainment as the contractor in three of four complaints it filed with the Nevada State Contractors board in late October. All complaints, which the board is now processing, relate to improper construction at the two properties and the warehouse.

"Harrah's ran all these illegal remodel projects," Frazzetta told commissioners. "It was not contractors. There were licensed contractors that were involved, but Harrah's was the one that was ultimately responsible."

In Tuesday's statement, Harrah's Entertainment said it "took numerous steps to ensure the mistakes made during room renovations were corrected and that similar mistakes don't reoccur. Among other things, we closed the subsidiary that supervised the Las Vegas room-renovation projects in question, eliminated the associated jobs and implemented a construction review process to verify compliance with all relevant building codes. And we've worked with the county throughout this process to ensure the appropriate remedies were made."

Many of the people that need to be held responsible, Frazzetta told the commissioners, include some people who have already left the company or been fired, as well as three licensed contractors.

"Harrah's personnel that was responsible for the illegal remodel projects that I am aware of were Kirk England, Tom Jenkin, Tom Adams, Mike Nasby, Mike Whitehead, Leon Vermillion, George Kirkwood," Frazzetta said, also mentioning three licensed contractors.

England, Harrah's Entertainment vice president of design and construction, left the company Jan. 31 after eight years to join his family in Colorado.

Jenkin has been Harrah's Entertainment Western division president since 2004 and oversees 14 casino properties in Nevada, Arizona and California.

Jenkin was named senior vice president and general manager of Harrah's Las Vegas in 1993, and was put in charge of overseeing the Rio in 2001.

Frazzetta worked under Adams and Whitehead at the Rio and then Harrah's Las Vegas.

Adams was a director of facilities and projects for Harrah's Las Vegas and the Flamingo at the time of the Rio remodeling. He then led Roman Empire Development after it was formed in late 2006 as a remodeling subsidiary of Harrah's Entertainment.

The subsidiary was closed in December. The company has not suggested that any of the terminated employees were responsible for the improper renovation work.

Whitehead is a former chief engineer at the Flamingo Hotel who helped lead Roman Empire Development.

Nasby is a former chief engineer at Harrah's Las Vegas who moved over to Harrah's Entertainment. Vermillion, the former chief engineer at Harrah's Las Vegas, retired in 2007 and was replaced by Bruna.

Kirkwood's position with the company has not been verified.

Harrah's Entertainment has repeatedly declined to discuss the current employment status of Adams, Nasby, Whitehead and Kirkwood.

A call to a cell phone previously owned by Adams revealed the number has been disconnected.

"If someone has perpetrated a crime, no longer being a employee of the company does not make them not guilty of the crime," Frazzetta said, adding that the Clark County Fire Department has the list of names. He suggested the information be forwarded to District Attorney David Roger.

Meanwhile, the district attorney's office is still evaluating material submitted by the fire department on improper work it found at the same hotels, involving life safety systems that the fire department monitors for code compliance, such as equipment for fire detection and fire suppression.

"I can only hope that Harrah's will be held responsible to the full extent of the law," Frazzetta said.

County urged to probe Harrah's is republished from