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Joan Whitely

Harrah's audit of remodeling stays under wraps

18 April 2008

LAS VEGAS, Nevada -- The county, a state board and a casino company each says it will not release a report that sheds light on undocumented, and therefore potentially unsafe, remodeling since 2000 at local hotels, through which millions of tourists and thousands of workers have passed.

Harrah's Entertainment, the casino company that compiled the report in question, contends it is an internal document, though it has shared the report with county building officials, who then shared it with the Nevada State Contractors Board.

The report is an audit that enumerates 34 "covert" remodel jobs at eight Harrah's-owned properties in Clark County. Some of the work occurred under other ownerships, before Harrah's bought the hotels.

Harrah's pinpointed the jobs by comparing capital expenditures against a record of construction permits.

"We continue to work closely with the County on all the identified projects," wrote Marybel Batjer, a Harrah's Entertainment executive, when she turned down the Review-Journal's request for an audit copy.

The county doesn't have to release the report because its legal counsel doesn't consider it a public record, spokeswoman Stacey Welling recently said. Mark Hinueber, general counsel for the Las Vegas Review-Journal, said the newspaper was reviewing its options.

The county, state board and casino company also have declined to disclose a combined dollar value for the 34 projects. Harrah's has claimed that the jobs were minor, both in dollar amount and building scope.

When building inspectors in late March reviewed the work at the eight hotels singled out by the audit, they generated 68 pages of violation notices; some simply note a hotel location and a failure to obtain permits.

On April 10, fire inspectors wrote up four pages of problems with the fire safety systems at Bill's Gamblin' Hall & Saloon, one of the eight properties. The fire issues affected only two guest rooms, a large party room and a computer room, according to records.

Disclosing the projects' value would also give a hint on how much revenue the county lost when the hotels failed to pay permit fees.

If Harrah's needs to remediate any faulty work connected with those 34 projects, the county will assess permit fees for the new work, Welling noted. In 2007, the county charged Harrah's $86,469 in fees for investigating past remodel projects.

From the county, the Review-Journal obtained several recent letters sent between the county and the contractors board, which mention the carefully guarded audit.

The letters were either sent by, or directed to, Greg Franklin, who is assistant director of Clark County Development Services, which houses the building division.

The contractors board has not publicly acknowledged the audit's existence, beyond what George Lyford, its director of investigations, wrote in a March 31 letter to the county: "Seventeen (17) of the thirty-four (34) incidents identified (in the audit) ... are outside the statute of limitations (so) board counsel recommends no action should be taken" on the 17 incidents that happened before 2004.

"We are not going to comment on an open investigation. The letter and the law speak for themselves," Art Nadler, a board spokesman, said. State law orders that information and documents about a complaint stay confidential until the board initiates disciplinary action.

The 2007 Nevada Legislature reworked the law so now the contractors board can release information only on complaints that lead to disciplinary action. The board releases nothing on complaints that lead to a settlement between parties.

Before, the board used to share upon request a five-year history for any contractor licensed in Nevada, including the numbers and outcomes of all complaints filed. The contractors board is eager to support new legislation in 2009 to undo the secrecy amendments, Nadler has said.

On March 21, the contractors board wrote to Franklin that it had closed the county's complaint alleging Ford Contracting Co. did unlicensed remodeling of guest rooms at Harrah's Las Vegas. Three other complaints remain open, all filed by the county in regard to work at the Rio, Harrah's or a company warehouse.

"Included on the project listing (in Harrah's audit of remodeling without permits) are names of contractors that Harrah's contends were involved with the projects," Franklin wrote back on March 21. To regulate contractors, the board can fine or cancel licenses for violations, such as doing construction without permits.

The county also has declined to extract from the audit to make public a simple list of contractors names or even a count of how many contractors participated.

Harrah's Batjer has said the company voluntarily undertook the remodeling audit.

But David Roger, district attorney, recently said his staff had requested a reckoning of building safety in local Harrah's-owned hotels before moving ahead with arraignments of two Harrah's employees charged with misdemeanor violations of building and fire codes related to remodeling projects at the Rio and Harrah's Las Vegas, in which permits and inspections were bypassed.

One defendant, Robert Bruna, had been chief facility engineer at Harrah's on the Strip. David "Skip" Matthews, the other, is facilities director at Rio. Justice Court officials reset the men's court dates to May 30 after discussions took place between Roger's office and Harrah's Entertainment, which was represented by lawyer Richard Bryan, the former governor and U.S. senator. The gaming company has announced it will change its name to Caesars Entertainment.

Harrah's audit of remodeling stays under wraps is republished from