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Savvis: CEO Has to Pay Topless Club Bill
Friday November 18, 7:53 pm ET
By Samuel Maull, Associated Press Writer
Savvis Says $241,000 Topless Club Bill CEO Charged to Corporate Credit Card Is His to Pay
NEW YORK (AP) -- Savvis Inc., a St. Louis-based telecommunications company, says the $241,000 topless club bill that its chief executive charged on an American Express corporate credit card was a personal expense and the bill is his to pay.
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Savvis filed a motion earlier this week asking the court to dismiss a complaint by American Express, which is trying to recoup from Savvis the $241,000 that CEO Robert A. McCormick allegedly charged at Scores, a Manhattan topless club, on Oct. 22, 2003.
Savvis' motion papers also say McCormick is responsible for the bill. They say Savvis' general counsel, Grier Raclin, stated this in a Nov. 7, 2003, letter to Scores and to American Express' fraud office in the New York. That letter states McCormick "will pay the resulting costs personally," court papers say.
In the Nov. 7 letter, Raclin gave Harvey Osher, director of Scores, what was apparently McCormick's version of what he spent -- less than $20,000 -- and included a statement that the CEO would pay the bill.
The letter says that when McCormick arrived at the club with three business acquaintances shortly after midnight Oct. 22, 2003, he was offered a private room at $1,000 an hour and told the fee for dancers in the room was $400 per dancer per hour.
McCormick, currently on leave from Savvis, rented the room for "not more than six hours," the Raclin letter says, with four to six dancers in the room with McCormick and his guests. McCormick also bought about $400 worth of "Diamond Dollars" when he arrived and none after that, the letter says. The only other expenditures were for wine.
The letter acknowledges a maximum of $19,000 spent by McCormick, and says the CEO is treating the bill as "an outrageous fraud perpetrated on him" unless Scores credits his Amex account for unauthorized charges during the club visit.
Savvis' dismissal motion says "nowhere ... does the (American Express) complaint allege, as it must, that Mr. McCormick's charges were 'business expenses' -- and that omission is fatal to American Express' complaint."
Savvis also says in motion papers that it has an American Express "expanded protection" agreement, entered into in May 2000, that insulates corporate customers from liability for non-business expenses charged by employees.
"Under the agreement on which American Express rests its claims, Savvis is only liable for business expenses charged on the company's American Express card," the company's papers say.
"Nowhere in American Express' complaint is there any allegation that the charges on which it sues were business expenses."
American Express says Scores has been paid in full, while neither Savvis nor McCormick has paid any of the charges. Failure to pay is a violation of the American Express corporate credit card agreement, the charge card company's court papers say.
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