Prive bad rap a wrap?

Planet Hollywood foots the bill; Privé is mum. So now what?

Prive in Planet Hollywood.
Sun file photo

"I have no comment, per the hotel.” The barbarians are at the gate. There’s but a small window of time for Privé to go on the record about the degree to which it may or may not be guilty of the many allegations being tossed at a mute target. But by his own admission, managing partner Justin Levine is restricted from even attempting a defense.

While bloodthirsty scandal-watchers sit on pins and needles hoping for a dramatic steel-cage match between the Gaming Control Board, Planet Hollywood and Privé Nightclub, the casino and its attorney, Frank Schreck, seem determined to make this the most peaceful $750,000 wrist-slap in history, or rather, a $500,000 one if they can avoid the additional $250,000 fine for any future noncompliance.

According to Schreck, chair of Brownstein, Hyatt, Farber & Schreck’s gaming law group, the hotel immediately stepped up to take its medicine, which hints that the casino is perhaps in agreement that things were getting out of control and is looking for an out. In fact, a number of current and former Privé employees who were interviewed under condition of anonymity agree that this smells like a coup d’etat. Schreck denies this, but adds the caveat, “as long as the Opium Group abides by the terms of the lease.”

Since Planet Hollywood has paid Privé’s tab, the nightclub’s lease has been rewritten, Schreck says, “to reflect the greater authority of Planet Hollywood over Privé.” While the new deal doesn’t affect the length of the contract term, it does affect the provisions that now enforce Planet Hollywood’s right to send casino security through the club and to have Privé security trained through the casino. Schreck states that his client has admitted its negligence of wrongdoing on the part of a tenant, the matter is settled financially and that, with the exception of reviewing the criminal backgrounds of Privé employees, there will be no further investigation into the allegations against the club.

With Planet Hollywood nearly tripping over itself to write that check, two assumptions about Privé can and are being made: guilty as sin, innocent as spring lambs, and I’ll offer a third option, that the truth lies somewhere between the two. But we may never know. As Schreck said, no further investigation.

On the state level, the Gaming Commission, at press time, had the matter of Planet Hollywood’s settlement agreement on its agenda for Thursday, July 23. But on the county level, there’s a fourth player in the matter, and a more immediate threat to Privé’s livelihood: booze.

In a statement released by business license director Jacqueline Holloway, “Privé has been operating on a ‘limited’ license, which expires on July 28. We are evaluating whether to extend that license or not. If there is no extension, Privé will be forced to close its doors since it cannot legally operate without a business license. No action is contemplated regarding Planet Hollywood’s business or gaming license.”

Privé has been operating on a temporary liquor license since its New Years Eve 2008 grand opening, a practice not entirely unheard of. Privé Vegas LLC is a foreign entity, so the long process of getting a permanent liquor license is made all the more challenging.

Through its own investigation, the County Business License Department uncovered three violations, which were issued against Privé on May 14, 2008. In these violations, it is stated that a Privé security manager “stalled agents” who were conducting a compliance inspection and similarly “interfered with license agents” during a routine inspection. A third violation states that Privé also breached its duty to prevent toplessness and lewdness.

Some are calling this last-minute drama a fitting karmic twist, since it is Privé’s managing director, Greg Jarmolowich, who has long been rumored to be the whistle-blower in the IRS raid on competitor Pure Management Group in February 2008. In addition to the state and county’s allegations against Privé, former and current employees have speculated—and why shouldn’t they?—on the interesting timing of this matter, what with Privé being cited just three months after the PMG raids. Last week, Las Vegas Review-Journal writer John L. Smith posed the question, “Will Privé fine jam up Pure investigation?” 

Stroking my chin, I’ll pose my own: Will Privé’s fine in fact shed light on the PMG investigation? Ooh. I just got chills.


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