Welcome to VegasWell this is bad.

Earlier this week, Las Vegas Weekly reported an allegation of sexual assault following an event hosted by Tony Hseih’s Downtown Project (Awkward disclosure: Hsieh is an investor in Pando, personally and through his Vegas Tech Fund.)

[A]fter talks in DTP’s Learning Village, [a female visitor from out of town and her husband] stopped by a get-together at the Ogden [apartment complex], where attendees and speakers drank beer in the rooftop whirlpool. When they got up to leave, one attendee handed [the woman] a towel, and in the process—to put it in adolescent terms—felt her up. When [her husband] found out, he confronted the man. The groper smiled and offered him a fist bump.

The report is troubling for the obvious reason that any report of sexual assault is troubling, but also because it likely won’t come as a surprise to those who have much spent time around the Downtown Project. Indeed, it’s telling that Vegas Weekly chose to bury the allegation within a longer story about widely-known problems with the Downtown Project.

Before NSFWCORP (another VTF investment) was acquired by Pando, we had an office in the Odgen and would often hear stories of after-hours bacchanalia in the building. Most of the stories — and, to be clear, they were just stories — involved consensual behavior, but every so often there would be reports of groping or worse. I tried a few times to report out the claims but, as most of the stories involved unnamed victims and/or visitors from out of town, there were never any solid leads. Also, if there were any criminal complaints made I couldn’t find  record of them. With this most recent report, too, it’s unclear if the alleged groper was an employee of the DTP, an Ogden resident or a guest.

What’s clear is this: Allegations like this pose a serious problem for Hsieh’s Vegas project.

Douchebags and sex offenders exist in every city in America. But every city in America isn’t trying to promote itself under the banner of “delivering happiness” as the ideal place to relocate your family and start a serious company.  Certainly, every city in America isn’t trying to do that while overcoming a well-founded reputation for drunkenness, casual sex and… well, exactly the kind of behavior alleged in Vegas Weekly.

It was a running joke at NSFWCORP that, despite our company name, our team often felt like outsiders in Downtown Vegas because we were so comparatively boring. We didn’t attend any of DTP’s seemingly endless schedule of parties or social events, preferring to channel our energies into actually publishing a magazine and trying to stay in business as long as we could.

While I’m sure there were many in the Downtown Project (including Hsieh himself) who were genuinely committed to creating an oasis of entrepreneurship in the heart of Sin City, there often appeared to be just as many who saw the project as little more than a giant frat house where work was something to do after an honest week’s partying. I watched as some very capable, experienced entrepreneurs fled Vegas once they realized that their unwillingness to do shots on a party bus made them a bad “cultural fit.”

Again, this is not unique to Vegas: There are plenty of parties in San Francisco, or New York, or London. I’m also aware of the irony of me complaining about drunken behavior in others, having written several books about my previous life as an alcoholic, failed entrepreneur in London, San Francisco and elsewhere. But a few drunken idiots in San Francisco, New York or London can’t tank an entire entrepreneurial community. None of those cities is trying to build a reputation for serious entrepreneurship inside a place famed for only three successful industries: Sex, gambling and (previously) organized crime. In Vegas, just one creepy dude can bring the whole thing crashing down.

What makes that challenge worse is that the DTP team often seems, at best, oblivious to the bad actors in their midst and, at worst, tacitly supportive of them.

Back at NSFWCORP, we reported one particularly breathtaking example of this: The hiring of a former pickup artist as the head of downtown security, with special responsibility for providing nighttime safety escorts for women. It’s a story that bears repeating in the light of the new allegations:

When Hsieh announced that he was moving Zappos’ headquarters to downtown Vegas, some employees voiced concerns about the area’s after-dark safety. To reassure them, DTP announced it was hiring a former cop to head up a round-the-clock “Downtown Rangers” security patrol. The guy they chose for the job — Chris Curtis — had apparently impeccable credentials: he was a former hostage negotiator for LVMPD, had been voted “officer of the year” by visitors to Officer.com and was frequently interviewed by local and national media.

And yet. Had the Downtown Project read those interviews carefully, they might have paused before hiring Curtis. In one, with Vegas Weekly’s PJ Perez, Curtis described himself as LV Metro PD’s “unofficial Date Doctor…”

All the cops, from all the way up in the ranks, everyone that knows me, kind of knows what I’m about, and they come to me for advice. I’m like the Metro Hitch.”

Curtis’ boast of advising Vegas cops on how to flirt with women is somewhat more sinister than it sounds. As I reported at NSFWCORP, Vegas law enforcement has been hit by numerous criminal complaints involving sexual assault and harassment by police officers. The problem of officer misconduct in Vegas is so rife that it has its own Wikipedia page.

Dig deeper into Curtis’ background and you soon find a whole load of other interviews given to promote his book “MACK Tactics: The Science of Seduction Meets the Art of Hostage Negotiation.

As I explained at NSFWCORP:

The book, which references other negotiation manuals like “Getting Past No” by William Ury, also details Curtis’ rule of reciprocity: how, when a “MACK” does something nice for a woman it is reasonable to expect something in return. (We can only speculate on the appropriate reward for walking someone safely to her car)…

“When you’re a negotiator, the way to speak to people is drilled into you. It becomes natural,” Curtis explained to Karyn Miller from London’s Daily Telegraph. “You don’t ever say to a woman, ‘Let’s go back to my place.’ Women don’t want to seem easy. Instead, suggest there’s something you want to share with her, like a CD you talked about or a bottle of wine.”

To be absolutely clear, it’s possible that the allegation reported by Vegas Weekly really was an isolated incident and that all of the other rumors of a wider sexual harassment and/or assault problem within DTP are just baseless rumors. Still, rumors or not, they present a serious setback for Downtown Project’s efforts to convince serious entrepreneurs, and their families, to relocate to Vegas.

I contacted two spokespeople for the Downtown Project for comment [24+ hours before publication] on the allegations but neither had responded by publication time. I’ll update this story if I hear back.

Sadly, in my experience, there will likely be those within the DTP community who will respond with the equivalent of a smile and a fist bump: “Ah, lighten up! What do you expect? This is Vegas! It’s just a bit of harmless groping!”

It’s those people who should be made to feel seriously uncomfortable in Hsieh’s great happiness experiment, not anyone else.