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Nevada legalizes extortion

INSIDE VEGAS by Steve Miller
AmeicanMafia.com
February 12, 2007

LAS VEGAS - In this 2005 Las Vegas Sun photo, hundreds of local cabbies are shown blocking the Las Vegas Strip in protest of a bill passed by unanimous vote of the Nevada Legislature that would have prohibited many of them from taking pay offs from strip clubs and other adult businesses while allowing limo and shuttle van drivers to continue the practice unimpeded.

After the 2005 bill was approved, former Governor Kenny Guinn vetoed it when cabbies -- on company time and using company equipment -- shut down the Strip and threatened to shut down the airport.

Governor Guinn claimed to have received over 500 calls and emails asking for his veto. Using the reason "Taxicab drivers contribute greatly to the economy of this state," and that the bill was unfair because "It singles out and hurts the financial well-being of taxicab drivers" (while allowing limo and shuttle van drivers to extort at will), he dutifully signed the veto while not taking into consideration the dire consequences that doing nothing would inflict on tourists and local businesses.

Shortly after his veto, some taxi drivers declared victory and vowed to use the same obstructionist tactics in the future to accomplish their goals if the need again arises. Cab company owners remained silent, though average citizens complained loudly about being inconvenienced and threatened, along with their continued complaints about receiving poor taxi service in the outlying areas before the demonstration.

Then last week, the 2007 Nevada Assembly amazingly cowered and voted 42 - 0 to support Guinn's veto thereby legalizing extortion throughout the state! Maybe the casinos blocked by the protesting cabbies told their elected representatives to acquiesce for fear of future demonstrations on the Strip or airport. Whatever the reason, it was one of the biggest shockers in the history of the Silver State.

Now, other business owners are reporting that they also are being extorted if they depend on tourist business. These include wedding chapels, well known off-Strip restaurants, pawn shops, bridal shops, and florists. Remember, the state government is supposed to be protecting the convenience and necessity of all citizens, not just taxi and limo drivers. But Governor Guinn seemed to miss this fact and many small businesses are left paying the price.

Now its up to our new Governor, Jim Gibbons, to straighten out this mess before a few cabbies -- through threats -- are able to take over the state any time they see fit by using their boss' equipment to snarl traffic and cripple the tourist economy while leaving many locals walking or taking the bus.

Some cab and limo company owners are known to condone the practice of some drivers diverting passengers for profit. It saves those owners the expense of having to pay a living wage with benefits. It also allows them to claim they need more vehicles to meet the needs of locals and conventioneers.

After no company owners complained when their equipment and personnel were involved without permission in the 2005 civil disobedience, some observers began to speculate that another scheme was in the works. They also wondered how our State government could be so controlled by the threat of only one industry, and why the public's roadways were allowed to be used to threaten the Governor, especially when the taxi industry is supposed to be regulated by the state?

Keep in mind that most cab and limo drivers in Vegas are moral law abiding citizens like this driver who wrote to INSIDE VEGAS: "Steve: Regarding 'club runs', having driven a cab in Vegas for some 140 days since July of 2005, I wouldn't rely on those 'tips' to pay for my food budget, much less the rent. In my experience, with only a couple of exceptions, when passengers desired to go to a club, they knew exactly where they wanted to go. And that's just where I took them. No questions asked. Plus, as I understood it, any diversion of passengers was not only illegal, more important, it was unethical. Out of some 3200 trips, there were only two instances that I can recall being asked for a recommendation regarding a strip bar when I collected any extra dough from having made one." - Jon

And there are many more ethical drivers who feel the same, but I understand that most of them work the less lucrative day shift when "club runs" are not so prevalent. After the sun goes down things change. That's when you see dozens of idling cabs in front of every strip club up and down Industrial Road while local citizens wait and wait and wait for a cab to the airport. Also, the doormen at the major hotels want a cut, and will only direct guests wishing to go to an adult club to the cabs and limos of drivers who give them a hefty kick back. Hotel management looks the other way in typical "What happens in Vegas, stays in Vegas" style. No one seems to care that thousands of our tourists are being ripped off, extorted, and sometimes beat up after they arrive at an illicit sex business they may not have originally intended to visit -- something else the transportation company owners would rather not be held liable for.

On that subject, Brent Kenton Jordan, the former strip bar bouncer turned author of the best selling novel "Stripped," tells INSIDE VEGAS: "Steve: The standard cabdriver extortion rate is currently (for the past several months, and as of today) $70.00 per head. Kevin Kelly at the Spearmint Rhino was the last holdout at $30.00 per head until this past week, where he broke down to the pressure. The Rhino, in court documents, claims they paid out over 10 million dollars in 2005, alone (at $30.00 per head). I can understand the spineless politicians cowing down to these terrorist cabdrivers (what else would you call a group that boycotts businesses, shuts down the strip, and threatens to shut down the airport if their extortion money is cut off?) but how is it that the IRS is ignoring this? Look at the numbers: 10 million per year from the Rhino, and similar amounts from Cheetahs, the Crazy Horse, Treasures, The Olympic Garden, Sapphire, Club Paradise... (all the clubs––over thirty––now paying, with the exception of the Palomino). Possibly fifty million dollars per year divided between, maybe a hundred cabdrivers who work those areas and shifts. Millions in and out of the clubs and cabdriver pockets without a dollar in taxes being paid. What about Homeland Security? Do you suppose any of those millions are being funneled to terrorist organizations (without making any obvious references to cabdrivers with mideast and Somali ties)?"

In the case of cab and limo drivers diverting tourists to businesses that pay per customer delivered, keep in mind that some shuttle vans have 20 or more seats!

Unscrupulous drivers can make hundreds or possibly thousands of dollars per night by just waiting in the queue in front of any Industrial Road strip bar for patrons who want to go to another strip bar -- recommend the closest one that offers pay offs, and drive a few blocks down the road. In some instances, the only reason gasoline is used is to power the auto air conditioners while vehicles sit motionless in the queue. When they do hit the street, its only for a couple of blocks, and the whole scenario starts over again until the sun comes up. In the meantime, radio volume is turned down, and local residents wonder why they can't get a cab?

Because of the current situation, there's no need for the regulating agency known as the Nevada Taxicab Authority (T.A.) whose only purpose is to make sure new companies don't get approved to compete with existing cab and limo operators who are famous for giving generous political campaign contributions to Governors, and wining and dining his appointed T.A. commissioners.

Nevada has strict laws that protect the exclusivity of the owners and their desire to squelch competition. The "Public Convenience and Necessity" law allows each owner to "intervene" when a new operator applies for a taxi or limo certificate. The intervention permits company attorneys to claim an "adverse impact" if competition was allowed -- that their client would suffer financial harm with new competition. Because of this law that has been ruled unconstitutional in 47 states, Nevada only allows several companies to ply our streets with cabs, limos, and shuttle vans. Those outsiders who apply for certificates soon learn an expensive lesson like that taught to Music Express Limousines, one of the nation's largest limo companies, when they tried to get a permit to operate in Clark County (Las Vegas).

It seemed that the "public's convenience and necessity" was overpowered by the existing company's convenience and necessity to limit legitimate competition.

At the time, I was fresh off the Clark County Regional Transportation Commission where I had spent four tumultuous years exposing the $10 - $17 million per year skimming operation of the former transit bus system on the Strip. Like most former public officials after leaving public office, I opened a consulting business, and my first client was Music Express.

After spending a quarter million in legal fees, a hearing was held before Governor Bob Miller's appointed Nevada Transportation Services Authority. At that hearing the other limo operators sent their attorneys to plead that there would be an "adverse impact" on their business if Music Express was allowed to operate in Nevada.

Knowing the players on the-then Nevada Transportation Services Authority, I soon realized I would have to become a bag man to make it work, and that's not my style. I told my clients who immediately pulled out. The firm with branches in New York, Washington D.C., LA, and San Francisco folded their tents and left Sin City never to return. They were too legitimate to do business in Nevada.

Imagine the same set of rules for pizza parlors, dry cleaners, or beauty salons? Someone who legitimately applies for a business license would have to face the high powered attorneys of the neighborhood competition who would appear at a hearing officiated by a bunch of paid off appointees of the Governor who say the new business will cause an "adverse impact" on existing pizza parlors, dry cleaners, or beauty salons, therefore no competitive license should be granted.

Sound ridiculous? It would be in any other town. But in Sin City, it's par for the course, at least with taxicab, limo, shuttle van, and tow truck companies.

At present, no new "Certificate of Public Convenience and Necessity" can be issued without the approval of the men and women the former Governor appointed to the state Taxi Authority or Transportation Services Authority, and many of those same men and women are notorious for taking bribes.

Get the picture?

Taxi and limo certificates or medallions should be available to anyone with a commercial drivers license and insurance who wants to fulfill the American Dream. Why doesn't Nevada allow one owner - one cab businesses? Or allow new operators to own fleets? Ask our new Governor Jim Gibbons? It all depends on who he plans to appoint to his next state transportation boards and commissions, and whether they enforce the laws that are supposed to protect the public's best interests.

Meanwhile, call at least two hours in advance for a cab to McCarran Airport if you need to catch a red eye.

Copyright © Steve Miller