Las Vegas- Strip club owner Michael Galardi delivered monthly cash payments to then-Clark County Commissioner Dario Herrera totaling $200,000 over three years, federal prosecutors told jurors last Thursday.
While Mary Kincaid-Chauncey held a seat on the County Commission, Galardi paid her $19,000 during secret meetings, the prosecutors said.
The alleged illicit payments were the focus of the federal government's opening statements Thursday in a political corruption case that became public when federal indictments were handed up in May 2003.
Defense attorneys and prosecutors spent Thursday outlining their sides of a case that will play out in U.S. District Court over the next three months.
During the period that Kincaid-Chauncey and Herrera received cash payments, they worked behind the scenes to loosen strip club regulations, keep competing businesses away and help Galardi secure important permits for his establishments, Assistant U.S. Attorney Daniel Schiess said.
He said the cash was delivered to commissioners by their former colleague, Lance Malone, who went to work for Galardi after losing his bid for re-election in 2000.
Neither commissioner disclosed any payments or relationships with Galardi and Malone when they voted on matters related to Galardi's Clark County strip clubs, Leopard Lounge and Jaguars.
"Dario Herrera and Mary Kincaid-Chauncey pretended to be fair and impartial in dealing with matters before the County Commission," Schiess told jurors.
Schiess' four-hour presentation stunned defense attorneys. Not once did he use the word "bribery" or the phrase "quid pro quo," a key Latin legal term meaning "one thing in exchange for another." Bribery is the core allegation in the government's 40-page indictment.
"It was a glaring omission," attorney Jerry Bernstein, who is defending Herrera, said outside court. "It speaks volumes about what they think about their case."
Bernstein also noted that the indictment makes no mention of the monthly payments to Herrera. He said the federal government's case is so weak that prosecutors have resorted to a "smear campaign" against Herrera. The prosecution has clouded the case by detailing sexual encounters Herrera, who is married, had with Galardi's employees, Bernstein said.
"Those are issues for Dario Herrera and issues for his wife, Emily, not these people," he said, pointing to the table where prosecutors were seated.
Schiess told the jurors that he didn't discuss lap dances and oral sex given to Herrera to "take the case in the gutter."
"I'm telling you that this was the expectation between Herrera and Galardi," Schiess said. "This was the currency of their corruption."
After the opening statements, Herrera said he was relieved that his side of the story could finally be told to the public.
"I've known the facts for a long, long time," Herrera said. "It's somewhat gratifying for people to understand this."
Bernstein maintained Thursday that neither of the government's star witnesses, Galardi and former Clark County Commissioner Erin Kenny, are credible. Both were named in the indictment, and each struck a plea agreement with prosecutors.
Galardi and Kenny promised to deliver damning information on scores of elected officials in return for lenient sentences. Each has reason to exact revenge on Herrera by providing the government with false information, Bernstein said.
Galardi is a racist who might dislike Herrera because he is Latino, Bernstein said. In addition, he said, Galardi often expressed frustration with Herrera because of his lack of interest in lobbying for issues important to the strip club owner.
In intercepted telephone conversations recorded by the government and played for jurors Thursday, Galardi is heard using obscenities to describe Herrera after he failed to vote in favor of his clubs.
Kenny vowed to "destroy" Herrera after he leaked to a reporter a scheme that involved her, Galardi and Malone. Kenny and Galardi were trying to get county officials to hire Malone as Parks and Recreation director. Kenny called Malone after being questioned by the reporter.
"That prick. That son of a bitch," Kenny said of Herrera during a recorded telephone conversation with Malone. "You know. He's gonna (expletive) pay. He'll pay. I will destroy him."
After playing the recording for jurors, Bernstein asked: "Will you believe what Erin Kenny will say about Dario Herrera?"
Galardi had a menu of favors he wanted from the commissioners, both sides said. The favors ranged from lifting a "red tag," a stop construction order issued for his Jaguars club in 2001, to lobbying for an ordinance that would allow alcohol to be served at all-nude clubs.
On several occasions, Galardi appeared before the commission to renew liquor licenses for his businesses.
Prosecutors claimed Herrera voted in favor of Galardi on issues crucial to his business empire. Bernstein showed jurors that Herrera voted favorably only for the renewal of licenses. Each time, Herrera followed recommendations made by county staff members.
On all other issues listed by prosecutors, Bernstein produced official voting records that showed Herrera had voted against Galardi.
"What kind of corruption case is this? What kind of bribery case is this?" Bernstein asked. "Dario Herrera isn't helping Michael Galardi on any of the issues Michael Galardi really cares about."
Bernstein suggested that Malone might have stolen the bribe cash that Galardi thought had been delivered to commissioners.
In an October 2001 telephone conversation with his father, Malone pondered keeping $20,000 that Galardi had asked him to deliver to an unnamed politician. His father talked him out of taking the cash.
"It's not a very big leap for you to concede that Lance Malone pocketed some of the bribe money Michael Galardi thought was going to be paid to Dario Herrera," Bernstein said.
Herrera received money from Galardi on one occasion, his attorney told jurors. Galardi wrote Herrera a $10,000 check during his campaign for U.S. Congress. Herrera reported the contribution on his financial disclosure forms.
Other than that, Bernstein said, Herrera took advantage only of Galardi's offer to pay for pricey rounds of golf, lap dances, drinks and meals. If Herrera failed to list those gifts on campaign forms, it amounted to a civil penalty, not a federal crime, Bernstein said.
"Like it or not, comps in Las Vegas are a way of life, but they're not bribes," he said.
Attorney Richard Wright, who represents Kincaid-Chauncey, also criticized the prosecution's dependency on information provided by Galardi.
When Kincaid-Chauncey was interviewed by federal agents in May 2003, she admitted receiving a total of $9,000 from Galardi.
Malone gave her $5,000 in cash to pass on to her son Mark Kincaid, who was running for North Las Vegas City Council. On another occasion, Galardi gave her $4,000 for her grandson's tuition to an Olympic ski school.
Wright said Galardi was not the only Las Vegas businessman who was asked to contribute to a foundation formed to fund her grandson's training.
Wright said that based on information the government had received from Galardi, authorities initially accused Kincaid-Chauncey of taking $300,000 in cash bribes. By Thursday, prosecutors claimed she had taken $19,000.
"This is the incredible shrinking case against Mary Kincaid-Chauncey," Wright said.
He called Galardi's plea agreement "one of the greatest deals in the history of law enforcement."
Galardi agreed to provide information on dozens of public officials. In return, the government put a five-year cap on his prison term and forced him to forfeit $4 million.
"He said he could give them multiple dozens of people; one of the people he could give up was Mary Kincaid-Chauncey," Wright said.
He questioned why Galardi's information hasn't led to the arrest of the others he implicated.
"Why has nothing happened?" Wright said. "Because the government knows Mr. Galardi, who they made a deal with; they know they got snookered. It's that simple."
