Las Vegas- The cash-rich duo of strip club owner Michael Galardi and his lobbyist, Lance Malone, had one mission in San Diego: repeal a no-touch ordinance hurting revenues at Galardi’s all-nude club.
The task was seemingly simple compared to the laundry list of favors they sought from Clark County commissioners to ensure Galardi remained emperor of topless clubs in Las Vegas.
Over a three-year period, Galardi handed thousands of dollars in cash to Malone, who then delivered the money to former colleagues on the commission, according to a 2003 federal indictment issued in Las Vegas.
Malone’s cash payments were designed to persuade board members to push through a variety of issues related to Galardi’s clubs.
Among the changes Galardi wanted were:
• A more stringent distance requirement between clubs to stifle competition.
• The reversal of a prohibition on alcohol in nude clubs.
• The weakening of an ordinance restricting touching of dancers and customers.
• The expediting of building inspections and permits at his topless palace, Jaguars.
And, dissatisfied with the results, Galardi wanted Jaguars to be annexed into the city of Las Vegas, where adult-use ordinances were more lax.
Their efforts in Las Vegas involved a significantly larger amount of money than the $34,500 in contributions paid to San Diego Councilmen Charles Lewis, Michael Zucchet and Ralph Inzunza.
Galardi doled out well over $100,000 in gifts and cash payments to commissioners, including $20,000 toward a sport utility vehicle for Malone while Malone was a sitting board member, the indictment says.
“My view is the Las Vegas case is much stronger,” said Stan Hunterton, a former federal prosecutor. “After the San Diego verdict, I talked to a number of people in the legal community who said ‘Malone’s got to throw in the towel now. Everyone in Las Vegas is going to plead.’ ”
Jurors deliberated three days before finding the San Diego councilmen guilty of accepting bribes from Malone to overturn the no-touch ordinance, even though the law was never changed.
Defense attorneys for Malone, Zucchet and Inzunza have vowed to appeal the verdict. Lewis died a year ago. But the appeals process wouldn’t preclude Malone from going to trial in Las Vegas, where attorneys predict an uphill battle.
The differences in the indictments lead attorneys to say the evidence in the California case is weaker than the case here.
In San Diego, the councilmen accepted campaign contribution checks from Galardi’s employees and friends. Galardi then reimbursed the contributors with cash, a misdemeanor. The councilmen reported the checks on their financial disclosure forms. Payments to the councilmen were sporadic and weren’t made around the time formal action was taken on the no-touch ordinance.
In Las Vegas, Malone made cash payments to commissioners Dario Herrera, Erin Kenny and Mary Kincaid-Chauncey, none of whom reported the money on campaign forms, the indictment says.
Envelopes containing thousands of dollars in cash were oftentimes delivered to the commissioners. They would rendezvous with Malone, meeting in parked cars, or they would meet with him at Galardi’s club, the indictment says.
Only one participant in the bribery scheme, Galardi, testified against Malone in San Diego. In the Las Vegas trial, expected to start early next year, Malone could face Galardi and Kenny, his one-time colleague. Both pleaded guilty and began cooperating with federal prosecutors shortly after the indictments were issued in 2003.
Kenny could prove to be a key witness in Las Vegas, Hunterton said.
“There, you had to rely on the tapes,” Hunterton said of the San Diego case. “Here, the government’s going to have an insider; a former elected official saying, ‘Yeah, I am a crook and they’re all crooks.’ ”
Houston defense attorney Douglas McNabb, who specializes in federal cases involving white-collar crimes, said Kenny’s testimony could be “incredibly harmful.”
Prosecutors will try to convince the jury that even though they might not like Galardi or Kenny, the government needed them because “it takes a rat to catch a rat,” McNabb said.
The indictments show Malone bounced back and forth between the two cities from 2001 until May 2003, delivering money and persuading public officials to move on policies and procedures harmful to Galardi’s businesses.
For example, on July 13, 2001, Malone discussed with his boss Kenny’s efforts to lift a “red tag” that had been placed on Jaguars. A red tag puts a hold on construction until a project complies with building code.
“Did you tell (Kenny) there’ll be a little bonus if it’s lifted today?” Galardi is heard asking during an intercepted phone call.
Six days later, Malone was back in San Diego, delivering $6,750 in straw campaign checks to Zucchet.
Prosecutors have said there was no indication the San Diego councilmen were interested in the strip club scene. They only sought Galardi’s cash. But in Las Vegas, public officials tapped into the activities Galardi offered as a strip club owner.
During a golf outing at Southern Highlands Golf Club in spring of 2001, Herrera was accompanied by a female employee of Galardi’s to “provide entertainment,” the indictment says. During a yearlong period ending in 2002, the once promising congressional candidate had Galardi pay for $3,000 worth of alcohol and lap dances for Herrera and his guests.
Kincaid-Chauncey also asked for favors from Galardi’s business, according to the federal government. After the commissioner told Malone her son was interested in visiting a Galardi strip club, her son was given free alcohol and $100 worth of lap dances. Strippers typically charge $20 for a lap dance.
Though Las Vegas residents have a tendency to excuse such behavior because of the nature of the city, Hunterton said, jurors might not be so lax with their views of the commissioners’ behavior.
“Sure, we have Light and Tangerine and the Palms’ Ghost Bar, but you’re not apt to find people who go to those places or run them or own them on the jury,” Hunterton said. “They are more apt to be conservative, older, retired military or retired law enforcement.”
San Diego prosecutors relied heavily on intercepted phone calls played in court for jurors. Although defense attorneys claimed the content of the calls was taken out of context, jurors said they influenced their guilty verdict.
Assistant U.S. Attorney John Rice repeatedly told the San Diego jury that Malone and the public officials don’t outwardly discuss bribes on tape, but jurors could infer from the conversations that a quid-pro-quo deal existed.
Recorded calls in Las Vegas appear to capture more blatant behavior.
According to the indictment, during an intercepted telephone conversation in July 2001, Galardi and Malone discuss Kenny’s failed attempt to expedite building permits for Jaguars.
“I’m glad we didn’t pay (Kenny) yet,” Malone said.
“Yeah, no (expletive). Saved me $50,000,” Galardi answered, according to the indictment.
In September 2002, Kenny spoke to Malone about needing more funding for her bid for lieutenant governor. Malone relayed Galardi’s anger that he delivers cash to commissioners, but proposals designed to benefit him never appear on the agenda.
“That’s not true. You know what, that’s (expletive),” Kenny told Malone when she was confronted with Galardi’s concerns, according to the indictment. “You know I have come through for him on Jaguars and every other … thing.”
Malone later told Galardi of his answer to Kenny: “Anything you’ve ever done for us, it’s not like you just did for free. … You’ve always been compensated. Uh, very heavily.”
McNabb has not listened to the recorded telephone calls, but through media reports he is familiar with the conversations included in the federal government’s indictment.
“From a practical standpoint, he’s got a super, uphill climb,” McNabb said of Malone.
“I think that in federal criminal cases, in the juror’s mind, the defendant did what the United States government said he did, or he wouldn’t be sitting there.”
