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Benjamin Spillman

Vegas still smarting over Obama comments

12 February 2009

LAS VEGAS, Nevada -- President Barack Obama might have to hold a Cabinet meeting in a gondola at The Venetian to settle this Las Vegas kerfuffle.

Obama's recent swipe at corporate excess that used Las Vegas for rhetorical flourish has politicians and tourism boosters from the Potomac to the fountains at Bellagio clamoring to defend Sin City's honor.

Two days after Obama slammed bailout-taking bankers for planning a get-together at a swanky Las Vegas resort, Nevada-connected boosters, politicians and businesspeople were still talking back.

"We've had about six major groups cancel," said Karen Gordon, president of the destination management company Activity Planners in Las Vegas. "Las Vegas and the entire meeting and incentive industry is being unfairly portrayed in a negative light."

On Monday during a question-and-answer session in Elkhart, Ind., Obama conjured imagery of crooked bankers cavorting in Las Vegas to make a point about accountability and responsibility.

"You can't take a trip to Las Vegas or down to the Super Bowl on the taxpayers' dime," Obama said.

The comment echoed recent jabs by other politicians and commentators suggesting companies that take taxpayer money to plug holes in their balance sheets should eschew meetings in Las Vegas.

In one widely publicized instance, Wells Fargo bank, recipient of $25 billion in taxpayer bailout bucks, backed out of a 12-day event at Wynn Las Vegas in the face of a backlash from angry taxpayers and indignant politicians.

In addition to Wells Fargo's decision to take a powder, banking giant Goldman Sachs also bailed from a planned event at Mandalay Bay.

The company, which received $10 billion in taxpayer money, moved the event to San Francisco, a city with pricier hotel rooms and higher average airfares.

An official with Mandalay Bay parent company MGM Mirage told The Associated Press the move included a $600,000 cancellation fee.

"This is ridiculous. This is what frustrates the American people," Sen. John Ensign, R-Nev., said in a statement. "I'll shoot this straight -- what Goldman Sachs did was purely a phony public relations gimmick, but it's not fooling anyone."

On Wednesday, Las Vegas Mayor Oscar Goodman and officials from the Las Vegas Convention and Visitors Authority said insurance giant State Farm also has backed out of an event.

They said the event would have delivered 11,000 room-nights for Las Vegas, a city that has been hit as hard as any by the recession. State Farm did not return a call for comment.

The mayor renewed his call for Obama to apologize for singling out Las Vegas or at least to clarify his remarks.

"Serious business is done here. Serious deals are struck here," Goodman said. "I think he has to straighten out the record."

Goodman also recalled Obama's numerous visits to Southern Nevada during his campaign for president.

"I hope he wasn't engaged in frivolity," Goodman said. "I hope he was here for serious meetings."

The mayor brushed off a suggestion that Las Vegas boosters have brought the problem on themselves by spending hundreds of millions of dollars promoting the naughty side of Las Vegas, primarily through the cheeky "What happens here, stays here" advertising campaign.

"There are different markets that we are trying to attract here," he said. "We are just trying to promote what we're famous for."

Folks on the business end of Las Vegas tourism say it is critical for potential visitors to distinguish between professional and party aspects of the city.

They say Obama's and others' pejorative references to Las Vegas specifically and employee incentive meetings in general are especially infuriating in the context of an economic recovery conversation.

They say figures show that in 2008, in Las Vegas alone there were more than 22,000 meetings that directly sustained about 43,000 jobs and generated an estimated $8.5 billion for the local economy.

"It goes to the hotel clerks, the bus boys, the taxicabs. When meetings are canceled, there is a ripple effect," said Brenda Anderson, CEO of the Society for Incentive Travel Executives.

Anderson said incentive trips to popular destinations such as Las Vegas, Hawaii and Mexico play an important and productive role in the world of business.

For a predetermined amount of money, a company can buy a trip in advance for employees who meet certain goals.

The incentive can be cheaper for the company than cash bonuses, and it can be memorable for employees who earn one of the slots.

"When a motivational event is properly run, the incremental revenue that is raised pays for the event before the reward piece even occurs," Anderson said. "Somehow these facts have gotten contorted and confused with executive excess."

Anderson cited a trip she earned to New York City in 1988 when she worked for a major employment agency as an example.

"I worked my butt off to achieve a sales goal I thought was impossible," she said.

As part of the trip, Anderson, who made less than $40,000 in pay that year, got to have tea on top of the World Trade Center with the chief executive of the company, who asked her to share techniques she used to be successful.

"I felt the company believed in me and they cared," she said. "There is a misconception these trips are for wealthy people who have it all. That is not always the case."

Rep. Shelley Berkley, D-Nev., also joined the fray Wednesday, calling "for a cease-fire in the war of words over travel to Las Vegas and other destinations by businesses."

Sen. Harry Reid, D-Nev., said he contacted Obama chief of staff Rahm Emanuel about the remarks.

"He made it clear to me that the president's criticism was aimed at the potential use of taxpayer funds for junkets and in no way reflects his thoughts about any one particular city," Reid said. "In fact, (Obama) just accepted my invitation to visit again this spring, for the first time as our president."