Las Vegas NowCabbie Kickbacks Corruption - Part 2

Cabbie Kickbacks Corruption - Part 2

Local businesses say they paid more than $20 million in 2004 as bounties for cab drivers. The practice is illegal. It's also illegal for drivers to divert customers to a business where they can collect a kickback, but it happens all the time. So who is keeping an eye on drivers and businesses, and what might happen next?

Rob Stewart said, "You can't leave your cab running and unattended at the same time. Do you know how many cabs get stolen like that?" Taxicab Authority investigator Rob Stewart is making his rounds, keeping an eye on 6,500 licensed cab drivers, 2,000 of which may be on the streets at any given time. "Batteries, assaults, sexual assault complaints. Virtually everything that happens on the street happens in a cab."

Drivers have been arrested for working as pimps, for DUIs, even for smoking dope behind the wheel. But it's a small number considering the huge volume of business conducted by Las Vegas cabbies. Stewart says, "Eighty-five to ninety-five percent of the drivers are good, honest, hardworking people. Ten to fifteen percent are out to make a buck any way they can, and those are the ones we have problems with."

With only 35 investigators total, the T.A. doesn't have the manpower to watch everything. If a driver is violating the diversion law -- taking a passenger to someplace other than what was requested -- there's no way for the T.A. cops to know unless a complaint is filed. They get 7 or 8 diversion complaints each month, which means there may be a lot more of it going on that is never reported.

Stewart says the state has no authority to enforce laws that ban the payment of gratuities to cab drivers by strip clubs, massage parlors, and other businesses. It's illegal, but not on the part of the drivers. And when upset, drivers staged a slowdown on the Las Vegas Strip as a protest against a proposed ban on the cabbie kickbacks, the T.A. had to stand on the sidelines, even though drivers threatened to shut the town down. Stewart says, "We can't go out there and order them to pick up people."

As far as the T.A. is concerned, the current fight over businesses paying bounties to drivers is the fault of the strip clubs because quote, "They're the ones who started it." The fact is -- no they didn't. Bounties for drivers were first paid by area restaurants back in the early 80s. Phillips Supper Club paid drivers $2 a head for customers, which led many drivers to begin diverting customers who wanted to go somewhere else.

An undercover probe found more than half of drivers engaged in diversion. It destroyed the business of those restaurants that didn't pay, which is why the diversion law was created and why a blanket ban on business tokes to drivers was enacted. Strip clubs picked up on the practice years later. And with few exceptions, government regulators didn't stop them, despite it being out in the open.

Last year, Spearmint Rhino paid $4.8 million to driver. Crazy Horse Too paid 4.9 million -- just two clubs and $9 million. Most drivers get only a small taste of that money.

Cab driver Craig Harris says, "If I get two guys going to a club and I collect 40 bucks from them, it's the first time in a week or a month that it happens." But, Harris says some drivers chase the kickbacks like a vampire chases blood. They exclude all other passengers and concentrate on the strip club runs.

Brent Jordan, former Cheetahs doorman, says, "We're talking $1,000 a weekend for some of these guys." Jordan spent 12 years as a doorman and bouncer for Cheetahs and wrote "Stripped", a scathing book about his experiences.

On a busy night, Cheetahs would pay $18,000 to drivers and if they dared to pay less, there was trouble. Jordan says, "I'd almost get into fistfights all the time with these guys if you try to cut it a dollar. Hundreds of times my life was threatened by cab drivers because I was paying less payout."

Clubs have been threatened with a total cab boycott unless they continue to pay, something that sounds like extortion. The drivers say they are entitled to a fair share of what the clubs earn. Clubs are so afraid of driver backlash that no one would speak to the Eyewitness News I-Team on camera for this story. While some drivers may extort money from businesses, it also appears that drivers are the victims of an extortion racket.

One source of driver anger is a widespread practice involving limo drivers and hotel doormen. Doormen who learn that customers are heading for strip clubs divert passengers to limos in return for a piece of the kickback, cutting cab drivers out altogether.

Craig Harris says, "Half the gratuity he would receive from the club is in that palm and goes to the doorman. They're pimping a ride so to speak."

If kickbacks to cabbies are eliminated but limo drivers are not included, the taxi folks hint they're prepared to take drastic steps that could affect the whole town. Cab driver Mike Doctor says, "It's gonna be difficult to get a cab."

Clark County officials say it's been three years since they've cited any businesses for paying kickbacks to drivers. They were preparing a new wave of enforcement but a moratorium has been called.

State and local officials will try to figure out whether to enforce existing laws in a fair way or re-write them altogether.

Contact I-Team Investigative Reporter George Knapp