Tow companies complain regulation dictated by politics
Sisolak alleged to have paved way for campaign contributor
AutoReturn.com has contracts with law enforcement in a dozen states, as well as Rome, Italy. (AutoRenew.com image).
A move by Metro Police to remove politics from the selection process for its lucrative towing contracts was in fact a politically-motivated endeavor by elected officials, including then-Clark County Commissioner Steve Sisolak, to favor one company, according to competitors, and is tantamount to a monopoly.
“It was political. 100 percent,” says Yaron Cohen, owner of Fast Towing, of the decision by Metro to contract with AutoReturn, a tow management company that has been blamed for increasing costs to consumers in some of the more than two dozen cities and counties it serves.
“We are no longer in the towing business,” Metro Sheriff Joe Lombardo told the Current via text, citing the 2016 contract that put AutoReturn in charge of selecting tow companies and storage yards for vehicles towed at the direction of police. In exchange, Auto Return tacks on a $25 charge to customers’ bills for every law enforcement-related tow it dispatches — an estimated 2,000 vehicles a month removed from accident scenes, at DUI arrests, or for parking violations.
Metro recently renewed the contract for five years.
The arrangement has cut the previous half-hour tow truck response time in half, according to Metro, and reduced the risk to officers clearing accidents.
“Quick crash removal and clear roadways improve public safety, commerce and citizen services,” says the website for AutoReturn, the towing management company contracted by Metro at no cost to police. Instead, the dispatch service charges the additional fee when owners reclaim their cars.
“They (police) are no longer in the towing business because they put a middleman in charge,” countered former Clark County Commissioner Chris Giunchigliani, who says Sisolak, from his position on the County Commission and Metro’s Fiscal Affairs Committee, did the bidding of SNAP Towing owner Bob Ellis, who lacked a towing contract with Metro. Ellis’s SNAP Towing subsequently became one of the companies contracted by AutoReturn to tow and store vehicles at the request of law enforcement in Southern Nevada.
Sisolak, now governor of Nevada, did not respond to requests for comment submitted to his campaign.
If at first you don’t succeed….
Ellis, a Henderson businessman, has long sought to profit from law enforcement towing and storage contracts, according to insiders and public records.
A prolific contributor, Ellis donated some $55,000 to Sisolak’s campaigns during the last decade. He’s contributed $27,500 to Republican gubernatorial hopeful Lombardo since his first run for sheriff.
“AutoReturn was brought in to bid for dispatch by Bob Ellis. Once they got the contract, Quality Tow and Fast Tow had their contracts pulled,” says Patricia Davidson, owner of Royal Towing.
In addition to SNAP Towing, Ewing Bros., and Walker Towing, a subsidiary of Ewing, were selected by AutoReturn to tow and store vehicles.
Earlier this year, Davidson contacted AutoReturn about joining the rotation.
“The Vegas Metro PD will not be adding any additional towing companies to their rotation,” AutoReturn responded.
Unlike its contracts with other government agencies, which specify vendors, AutoReturn’s local agreement allows the company, not Metro, to select tow companies and storage yards.
Henderson and North Las Vegas police have signed on with AutoReturn, but North Las Vegas retained the right to choose its tow vendors.
Metro’s practice is out of step with the police department’s goal on its website “to strive for open and fair competition” and “encourage all qualified vendors to participate in our solicitation opportunities,“ say critics.
“The issue of towing was obviously highly politicized in a way no other contracting issue we have ever faced was,” says Metro CFO Richard Hoggan, citing extensive legislative debate on the issue.
“As we know from past experience, dictating which operators AutoReturn contracts with will quickly become political, complicated, and potentially unseemly,” Hoggan said. “Simply put, we are leaving that as a business decision by the professionals who know the business, (rather) than to political influences.”
Cohen maintains the “selection process” was purely political.
“Bob Ellis approached me. He approached Quality. He approached Ewing Bros. He said he was going to get the AutoReturn contract and wanted to merge with another company.”
Cohen says Ellis “decided to go with Ewing.”
“I don’t know why Fast Tow’s name has come up,” Ellis said in a text, adding he “met with them several times 8 to 10 years ago.”
“After research,” Ellis says he “felt it wasn’t a partnership I wanted to be involved in.”
Via phone, Ellis denied working with AutoReturn to obtain Metro’s contract. He referred questions to AutoReturn CEO Jerry Carnahan.
AutoReturn spokesman Sam Singer says the company “partnered with a group of towers. They were all well-regarded towing companies.”
Metro’s contract with AutoReturn names Snap Towing, Ewing Bros., and Walker as the designated subcontractors.
Ten years ago, Metro rotated between two companies — Ewing Bros. and Quality — to tow and store vehicles.
“Around 2013/2014, there was pressure from elected officials to revisit that model,” Hoggan said. “Commissioner (then) Sisolak was the most involved. Commissioner Brown also supported a restructure in the two-vendor rotation model.”
Hoggan says Metro was asked by Sisolak and Brown “to find a better model and to initiate a Request for Qualifications process that would provide an objective evaluation of tow operators.”
Metro added a third company, Fast Towing.
Ellis passed on an opportunity to apply to join the rotation, according to Cohen.
“In order to have a Metro contract, you have to have a few million dollars of expensive equipment,” he says. “Ellis did not want to buy it. He had a small tow company.”
Ellis says that’s not true, but would not elaborate.
Adding Ellis’ company would have meant a once-every-four-months rotation.
“For nine months you are sitting with a fleet and not doing any tows,” says Cohen. “He said that’s not a good deal for him. He wanted to make money off storage.”
In 2012, Sisolak, seeking to pass an ordinance that would have regulated tow storage yards to Ellis’s benefit, said Metro’s two-company rotation “may not be a monopoly” but was close.
“What’s important to me is the free enterprise and the competition that’s involved,” he said.
Operators complained the measure would have stifled competition and put them out of business by requiring increased storage lot size and capacity.
“They don’t make money towing trucks or cars from accidents,” attorney Don Campbell, representing Ewing Bros., told commissioners at the time. “Where they make their money is from storing them. That’s why the proponent wants to take it away.”
Legislation for one?
Tow yard storage bills can reach thousands of dollars, sometimes exceeding the value of the car, which can be auctioned by the tow yard to satisfy the bill.
Deficiency judgments are commonly issued against the owner when the vehicle sells for less than the bill.
Giunchigliani, Sisolak’s commission colleague at the time, said the ordinance was designed to assist one company — Snap Towing owned by Ellis.
“What is it you’re asking us to fix?” Giunchigliani asked Sisolak at the time. “Are we trying to fix it so our consumers don’t get gouged? Nothing in this does that.”
The ordinance failed.
The following year, the Legislature passed a measure applying only to Clark County, requiring that vehicles be towed to the storage lot approved by their insurer. Insurance lobbyists testifying in favor of the measure thanked Ellis for bringing the bill, which was sponsored by then-Assembly Speaker and now Clark County Commission Chair Marilyn Kirkpatrick.
Complaints among tow companies alleging failure to comply with the measure ensued, according to Metro, prompting the agency to consider tow management solutions and outsourcing vendors.
Davidson with Royal Towing says it’s “known throughout the industry that there is no bid process. You have to go through AutoReturn.”
AutoReturn, according to spokesman Singer, does not require that it select the vendors. The company employs half a dozen or more towing companies in some cities — some selected by government agencies and others selected by AutoReturn.
“If you are an eligible towing company, they will add you. It can be good for everyone — for the environment, for the officers,” says Cohen of the company’s operations elsewhere. “But here they won’t even talk to you. They just set it up for that one company.”
“As we know from past experience, dictating which operators Auto Return contracts with will quickly become political, complicated, and potentially unseemly,” Hoggan of Metro told the Current.
But Davidson says delegating the selection of vendors to a third party is inconsistent with Metro’s commitment to transparency and fostering competition among vendors.
“Our goal was to ensure at least some diversity and leave it to the professionals to determine the number of operators that would ensure adherence to contract terms,” Hoggan said.
“We provide AutoReturn our specs. They are required to hold the towers accountable,” said Lombardo. “If they don’t, AutoReturn puts their contract in jeopardy. Like I said, I’m not in the tow business.”
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