COMMENTARY: Steve Miller
Las Vegas Tribune
January 16, 2002
Cabbie Diversion Hypocrisy

Since the late 1990s, Nevada Administrative Code prohibits topless clubs from tipping cab drivers for diverting customers to their places of business. However, the illegal practice has been openly ongoing for many years.

Now several topless clubs want the legal hammer dropped on their wayward competitors. Unfortunately, one of the clubs seeking judicial relief is renown for once being the worst offender.

Though no one is defending the practice of tipping cabbies to divert customers, cab drivers are not dummies though it appears at least one local attorney wishes they were.

Many cab drivers are members of Mensa. Mensa is an international society that has one qualification for membership: a score in the top 2% of the population on a standardized intelligence test. When I have been asked to speak at Mensa meetings there was always a lineup of taxicabs parked in front of the restaurant. At first I thought that Mensa members didn't like to drive, however I was soon surprised to learn that the cabs were driven to the meeting by Mensa members on their lunch break.

Some background: A summit conference of sorts took place in December 1998 at the now defunct Pizzeria Uno on West Sahara. Councilman Mike McDonald scheduled the get-together on behalf of his close friend Rick Rizzolo, owner of the Crazy Horse Too topless bar. The organizer of the meeting was Chris Christoff, Chairman of Citizens for Better Transportation. Also in attendance were a number of owners and managers of other adult clubs.

The meeting was intended to address customers being diverted to clubs that were paying cabbies up to $20 per passenger. The participants at the meeting discussed standardizing the amount of money the clubs would pay each taxi driver per passenger. The group agreed on paying $5 per head - a clear violation of Nevada Administrative Code.

Several months later, without warning, the Crazy Horse Too broke rank and openly began paying cabbies $10 a head. Councilman McDonald, a former policeman, took no action.

Within days, the Crazy Horse Too front entrance was crowded with as many as 75 idling taxies per hour. Investigative reporter Darcy Spears of KVBC TV News set up a sting and several drivers were taped diverting passengers to the club. After the newscast, the Nevada Taxi Authority stepped in and conducted a cursory investigation.

A source at the Nevada Taxi Authority gave the Las Vegas Tribune the following written report from an investigator who was assigned to count the number of cabs accessing the Crazy Horse Too on January 14, and 15, 2000:

"Friday, 01/14/00, 10:00 PM, 204 minutes total on stakeout. 176 cabs. One cab every 70 seconds. Approx. 4-5 minutes from parking lot across to the business and back to cab. Narrative: I parked in my private vehicle across in parking lot at the tire shop, same lot cabs park to go inside."

The following night the same investigator reported: "Saturday, 01/15/00, 9:57 PM, 172 minutes on stakeout. 140 cabs. One cab every 73 seconds. Narrative: Parked same location as Friday night. Got spotted by valet that wrote down my tag number. I left, informed (name withheld).

The diversion problems worsened.

On September 19, 2001, at a special hearing, citizens from Green Valley and Summerlin complained to the state Taxi Authority of waiting for over two hours for taxi service while dozens of cabs line up in front of local adult entertainment clubs that tip the drivers. The Crazy Horse Too was mentioned as the worst offender.

Following the citizen's remarks, taxi board Chairman Jim Jimmerson said that the Authority has no resources to enforce the existing anti-diversion law. Jimmerson said that it was the responsibility of the city and county to enforce against the business owners, possibly threatening liquor and gaming licenses, if businesses continue to pay taxi drivers to divert customers. Jimmerson also said that the Authority only has power over the drivers and company owners, and to stop the practice, business owners would have to pay high fines.

Business at the Crazy Horse boomed until headlines appeared on the front page of the Las Vegas Tribune followed by Channel 8 and Review Journal stories telling of robberies, beatings, and a possible murder at the club. The events of 911 also had an effect on the business.

Instead of working to stop the violence that was obviously scaring customers away, the Crazy Horse's loyal attorney, Tony Sgro, tried - but failed - to get a Gag Order against the Tribune.

During the Gag Order hearing, Mr. Sgro falsely accused this writer of being the owner of the Las Vegas Tribune. He also accused me of motivating the stories about his client based on my being a co-trustee of a family trust that is landlord to a competitive adult cabaret. Curiously, Sgro did not object to Channel 8 and the RJ's coverage of the same violent events.

Years of court records show Tony Sgro, partner in the law firm of Patti and Sgro, as the primary attorney for the Crazy Horse and its owner Rick Rizzolo. Sgro was not listed as being associated with any other topless club until December 2001 when he filed the cabbie diversion suit.

The law firm is also known for holding its lavish annual Christmas parties attended by politicians, strippers, lawyers and judges at Mr. Rizzolo's Canyon Gate estate.

Now, with new higher tech clubs on the horizon and business falling off at his primary client's club, Tony Sgro is suing at least half a dozen other topless clubs to stop what his primary client once thrived by doing.

The charade?

Insiders believe that Mr. Sgro did not want to infuriate hundreds of cab drivers and alienate his client in their eyes, so to make it look as though it was not just his primary client who was orchestrating the lawsuit, it is believed that Sgro cleverly included the Club Paradise and Olympic Gardens as co-Plaintiffs.

Last Monday, District Judge Sally Loehrer granted a preliminary injunction preventing gentlemen's clubs from tipping cab drivers. Then last Wednesday, Sgro said that several clubs are still tipping drivers and he is in the process of drafting the documents to have them held in contempt of court. "I believe, however, that they are making a calculated economic decision," Sgro said. "They know they are violating the judge's order and that they face monetary sanctions, but they are under the belief that they make more money by (diverting customers) than the judge can fine them." Sgro said it is his job to persuade the judge to make the fines high enough to be a deterrent.

If ever there was a clear example of "The pot calling the kettle black," this is it!

It was Sgro's primary client that was the subject of the TV investigative report on cabbie diversion that inspired the complaint to the Taxi Authority. Now the shoe is on the other foot and Mr. Sgro wants to punish the competition for doing the same thing!

Evidently his client has recently "seen the light."

This is not the first time Patti and Sgro have gone after the competition or come to the defense of their client's political hatchet man.

In 1999, Tony Sgro's law partner Dean Patti's name appeared in a Metro Police report as having accompanied Rizzolo's sister, Annette Patterson, at the time she leased office space for a church located across from a property owned by Sig Rogich. It was alleged that Patterson, with the help of Councilman Mike McDonald, and Patti and Sgro, located the church to block Rogich from obtaining zoning to open a topless club that would compete with Rizzolo's.

Then, Councilwoman Lynette Boggs-McDonald identified Sgro's partner Patti as one of the men who accompanied Mike McDonald and Rizzolo on a tour of the city owned Las Vegas Sportspark. They were called "potential investors" who wanted to buy the facility. This event catapulted Mike McDonald before the City Ethics Board where he was found guilty of ethics violations for helping his friends. Tony Sgro supported McDonald at the hearing.

It now appears that Mr. Sgro wants cabbies to be convinced that it was not his leading client's exclusive idea to stop the tipping - a primary source of their income. However, I believe Mr. Sgro is grossly underestimating the intelligence of the average cabbie. It doesn't take a Mensa member to see that the two other adult clubs are being included in his lawsuit as a transparent diversion to conceal the true identity of the brains behind this scheme - a machination that is not the first of its kind in Patti and Sgro's bag of tricks.

Because of the very obvious hypocrisy in Sgro's current effort, the taxi drivers who once enjoyed $10 tips from the Crazy Horse may get the last laugh. They are the ones you currently see circumnavigating a wide berth around Mr. Sgro's number-one client's place of business.

Steve Miller is a former Clark County Regional Transportation Commissioner.