Reno hired a private investigator to spy on strip clubs — and it won't share what it found

Editor's note: On the afternoon of Sept. 22, Reno City Manager Sabra Newby announced the city would make the report public. Read more about the announcement here.

The Reno City Council chamber was standing-room only Wednesday night for a debate over whether to force strip clubs out of downtown when Councilwoman Jenny Brekhus dropped a bombshell.

Unbeknownst even to Reno's police chief, City Attorney Karl Hall had hired a private investigator to go undercover at each of the city's strip clubs to look for illicit behavior.

Brekhus said she learned of the report during a staff briefing on the proposed ordinance changes for strip clubs.

To Brekhus, that information was critical for determining whether to support the proposed changes, which would require strip clubs to remove their digital signs and stop serving alcohol in coming months and ultimately force them to relocate into industrial areas within five years.

The entire ordinance rests on a legal concept known as the secondary effects doctrine. It essentially allows cities to regulate adult businesses based on the negative consequences they may have on the neighborhood while preventing cities from regulating the content of their entertainment.

Brekhus, other council members and many in the public wanted to know if any Reno strip club was causing specific negative effects in their neighborhoods. Relying on national and academic studies wasn't enough for them.

And to Brekhus, this private investigator's report was key.

"I thought it was a gap in the record to not have that," Brekhus said. "What evidence do you have?"

But when she asked Deputy City Attorney Chandeni Sendall to describe the private investigator's findings, Sendall balked.

"That was commissioned under an attorney-client privilege basis based on (an) investigation in anticipation of litigation," Sendall said. "It's a privileged document in relation to anticipated litigation."

Hall also declined to discuss the report during the public meeting, saying it is an attorney work product.

The city's strip clubs have been vocal about their intent to sue the city if the council passes the proposed ordinances. But they haven't yet sued.

Transparency in question

The existence of the secret report raises important transparency questions.

Under Nevada state law, documents used by the city council to make a policy decision must be made public. The Open Meeting Law requires the public be given any reports at the same time the council receives the report.

In this case, the written report was never delivered to council members. Instead, they learned of its existence and its findings in individual oral briefings before the meeting on the ordinance changes.

Brekhus said her briefing included all of the key staff members from the various departments working on the ordinance, as well as the city attorney. A representative from the private investigator's firm also attended the meeting.

"This gal came in, and she said they had reached out to a national expert who said you want to hire a private investigator to have a good qualitative study, eyewitness account of what's going on," Brekhus said. "They got it and frankly they were surprised by how much activity was going on."

Brekhus said the private investigator described victimizations of patrons and dancers and behavior that would rise to a criminal level. She said city staff wasn't certain what they were going to do with the report.

"I was just kind of dumbfounded," Brekhus said. "They were like, 'So, we don't know what to do. We could have this in our back pocket for future litigation. We don't know if we should have her come to a meeting discuss it.'"

Brekhus said she never heard a resolution to those questions, so during the public meeting she felt it was important to bring it up herself.

"To me, it was never brought up in an attorney-client setting and it was background being created for law-making, for rulemaking," she said.

The Reno Gazette-Journal has submitted a public records request for the investigator's report, as well as invoices detailing how much the investigator was paid.

Other council members mum on report

Mayor Hillary Schieve said she was troubled by the entire episode. She called into question the reliability of the information gathered by the private investigator and the appropriateness of sending investigators into private businesses at all.

"None of us knew that was going to happen," Schieve said. "It plays into the whole (Hall's) his own elected position. Sometimes I think he doesn't feel like he really works for the council.

"Then it makes me wonder if it's valid information if it's a PI. Do you have video? Do you have proof? Is that hearsay? I don't know."

Schieve said it was "murky" whether the information was gathered to help the council make a policy decision or to defend against a possible lawsuit.

"Were they trying to sway the council," Schieve asked. "I guess I don't know what the purpose of that was."

Schieve wants the report made public and said Brekhus did the right thing is bringing it up during the meeting.

Other council members reached by phone said they believed the report was part of a legal briefing on any potential lawsuits, and not meant as information upon which to base a decision on the proposed ordinances.

"They told me this was privileged information, so I'm really not at liberty to get into what they found," Councilwoman Naomi Duerr said. "It was a legal briefing, like any legal briefing."

Duerr acknowledged that other staff members from outside the city attorney's office were present at her briefing. She described the investigation as part of Hall's legal research into creating the ordinance, as well as preparation for potential litigation.

Councilwoman Neoma Jardon said she was made aware of the report during a briefing.

"Just individual briefings that made us aware this was something that was done," she said. "I don't have possession of it and I don't recall specific details. There was a third party that went in and documented some things."

Asked where the line is between a policy briefing and a legal briefing, Jardon answered, "That's a good question for the city attorney's office."

Councilman Oscar Delgado said he did not want to comment at all on the report since Hall described it as attorney-client privilege.

Councilman David Bobzien said it was clear to him that he was being briefed by the city attorney on a legal matter. Now that it is public, Bobzien said the public rightly needs to know what the city is doing to addressing the behavior at the clubs.

Councilman Paul McKenzie also said he was clear it was a legal briefing. While no strip clubs have sued over the proposed ordinance changes themselves, the owner of Fantasy Girls has sued the city over a recent administrative action taken against his business license.

"I don't believe that the actions they took with the private investigator are part of a policy decision," McKenzie said. "I believe legal actions will come based upon the ordinance. And given there's pending litigation out there that claims they are completely innocent of everything and we are just retaliating against them, the attorneys are doing their job to protect the city."

Hall, who did not immediately returns calls for comment, left a voicemail for the reporter Friday afternoon saying that he agrees with McKenzie's comments.

"We obviously everything we did was to defend the city from any potential litigation," he said.

Reno police chief: 'The whole thing was bizarre'

In June, the city of Reno ordered Jamy Keshmiri to "show cause" for why he should be able to keep his business license to operate Fantasy Girls. Reno police alleged that six shooting incidents had occurred on and around the East Fourth Street strip club earlier this spring and that its employees were not cooperative in police investigations.

The strip club's lawyer, Mark Thierman, said they have sued the city, claiming that the law cited as the reason to suspend or revoke the club's license is unconstitutionally vague, and that the city is retaliating against the business because they don't like topless clubs.

In the meantime, however, the club has complied with police recommendations to install security cameras and take other measures to deter criminal activity.

Thierman contends Hall's decision to send a private investigator into the clubs is un-American.

"If the report has anything to say, it ought to be public," he said. "The public has a right to know, especially when council says they are making up their minds based on this secret report. Is this the Inquisition? The Star Chamber? Where is our opportunity to rebut it?"

The fact that the police department was unaware of the investigation also troubles some council members, who said Hall has a duty to report any potential criminal activity rather than try to keep the report as some kind of secret weapon in a potential lawsuit.

Assistant Police Chief Jason Soto said he first learned of the private investigation when Brekhus brought it up at Wednesday's meeting.

"I had heard a rumor of some type of an investigation that was done that I didn't know about, but I don't know any of the details. I still don't know. I haven't seen it," Soto said on Thursday.

Soto said he would follow up with Hall to see if there is anything his department needs to investigate.

"The whole thing was bizarre," Soto said. "I'll sit down and talk with him next week to find out exactly what is contained in the report."

City Manager Sabra Newby said she has asked both code enforcement and the police department to follow up on the report.

Editor's note: This story was edited to include comments from Bobzien and Hall.