Vegas Politicos Paid Off for Years

Las Vegas- The first time Michael Galardi delivered cash to a politician in exchange for help pushing through zoning matters for a topless club was in the early 1990s, he said Wednesday.

Galardi testified that first payment was $10,000, given to then-Las Vegas City Councilman Frank Hawkins.

"I was surprised he asked for money, being a family friend," Galardi told jurors in the political corruption trial of former Clark County Commissioners Dario Herrera and Mary Kincaid-Chauncey. "I was actually more pissed."

Galardi said he quickly learned that in the Las Vegas Valley, the most effective way to navigate through government bureaucracy was to shower elected officials with thousands of dollars in cash. It was a tactic he used for years.

"It got out of control," Galardi, 44, testified. "I just had everybody in town hitting me up for money."

The payments, he said, included as much as $80,000 to Kincaid-Chauncey.

In 2003, Galardi, Kincaid-Chauncey, Herrera and former Commissioners Erin Kenny and Lance Malone were indicted on corruption charges.

Kincaid-Chauncey, Herrera and Kenny are accused of pocketing cash bribes from Galardi and, in return, voting favorably on matters that benefited Galardi's strip club empire. Prosecutors claim that Malone became Galardi's bagman, delivering envelopes of cash to the politicians.

Galardi and Kenny pleaded guilty and are government witnesses. Malone is scheduled to go to trial in August.

Galardi described how, in mid-1999, he began paying Malone, who was on the commission at the time, $5,000 a month to help shepherd matters affecting his strip clubs through the county process. At that point, Galardi was pushing for an ordinance requiring greater distances between adult clubs.

"We wanted to make it tougher for other clubs to come in and make it tough for us," Galardi said, referring to potential competitors.

The distance ordinance passed, and Galardi rewarded Malone by putting a $20,000 down payment on a new Ford Excursion, Galardi testified. Galardi said Malone complained that he was only one vote and would need assistance to sway others on the commission in the future.

The two set their sights on Kenny, Herrera and Kincaid-Chauncey.

"At the time, my thought was that was just the way things were in Vegas," said Galardi, who has lived in Southern Nevada since he was 5 years old.

Within weeks, Galardi testified, Kenny had joined his "team" and was receiving payments of $5,000 and $10,000 a month.

Galardi's testimony was in conflict with that of Kenny, who was on the stand Monday. Kenny, who said she suffers from vertigo, told the jury that she received payments from Malone and Galardi six to 12 times. Galardi said he paid Kenny 15 to 20 times from late 1999 through 2002.

Galardi testified that he and Malone paid Kincaid-Chauncey from late 1999 until May 2003 -- when the indictment was issued -- to watch over Galardi-related issues before the board. During opening statements, prosecutors said Kincaid-Chauncey had received about $19,000 from the strip club owner.

Kincaid-Chauncey's attorney, Richard Wright, declined to comment after Wednesday's hearing.

Galardi also implicated former Deputy District Attorney Gary Guymon during his testimony in U.S. District Judge Larry Hicks' courtroom. He said he established a relationship with Guymon in the mid-1990s, when Guymon frequented Cheetah's.

Galardi testified that he paid for Guymon's lap dances, oral sex and intercourse with strippers. In return, Guymon took care of Cheetah's employees' tickets for DUIs, speeding and assault charges, Galardi said.

Guymon did not return phone calls seeking comment Wednesday.

Galardi spent most of his time on the stand discussing his relationship with Herrera, whom he met in 1998 shooting hoops at the Sporting House fitness club. He then spotted Herrera at Cheetah's drinking cocktails and having lap dances in early 1999.

That was the first time Galardi paid Herrera's bill. He told jurors it was his practice to comp elected officials, local attorneys, police officers and firefighters.

"I didn't talk to him about it," Galardi said of Herrera's bill.

By late 1999, Herrera was also "on board" and Malone began delivering cash to the commissioner, Galardi said. The former strip club owner estimated that he paid Herrera, whom state Democrats had labeled as their "rising star," 15 to 20 times. Each installment, made from late 1999 to 2002, was either $5,000 or $10,000.

Herrera's attorney, Jerry Bernstein, said Galardi's testimony conflicted with statements he made to the FBI in 2003. During interviews with law enforcement, Galardi said he had paid Herrera monthly.

"I thought it was notable the prosecution had to impeach his own witness on the most critical point of the case," Bernstein said outside of court.

Herrera received more than cash, Galardi said. He said he saw Herrera in Cheetah's "seven to 10 times" over the years, receiving lap dances and sexual favors. Each time, Galardi said, he compensated the dancers $500 to $1,000.

Asked why he continued to cover Herrera's bills, Galardi responded: "Because he was a county commissioner, and I wanted to take care of him. ... I wanted his vote on Jaguars."

Galardi testified that he was concerned about how commissioners might react to liquor license permits critical to opening his two new strip clubs, Leopard Lounge and Jaguars. In the past two decades, he and his father, Jack, had lost 40 potential club sites across the country because of elected officials' views of the industry.

"To open topless clubs in the city or the county, it's tough," Galardi said. "We thought we were going to get jerked around."

It was Michael McDonald who first suggested to Galardi that it would be beneficial to pay elected officials to watch over matters concerning the strip club industry, Galardi testified.

In 1994, McDonald unseated Hawkins on the City Council. McDonald pitched his suggestion to Galardi after six or seven months in office, Galardi said. He testified that he began paying McDonald, an old high school friend, $5,000 a month.

Assistant U.S. Attorney Daniel Schiess asked Galardi whether he had given McDonald a title along with the money.

"He gave himself a title," Galardi said, adding later, "as consultant."

Galardi added that he never gave McDonald any work.

Neither McDonald nor Hawkins could be reached for comment Wednesday.

Malone was another high school acquaintance of Galardi's.

Although the two knew each other only casually in the early 1980s, their relationship developed from chatting at bonfires in the desert as teenagers to corrupting politicians and living a lavish lifestyle.

In early 1999, Galardi was beginning construction on Jaguars and Leopard Lounge, and he expressed concerns to McDonald about securing the proper zoning and permits. McDonald, he said, suggested developing a relationship with a Clark County commissioner.

Through Guymon, who was then a deputy district attorney, Galardi set up a meeting with Malone and another deputy district attorney who had also received free lap dances and sexual favors from Cheetah's employees, Galardi said.

At that point, Malone was also hired as a consultant, Galardi said.

"You were having a conversation with a prosecutor about bribing a county commissioner?" Schiess asked.

"I was friends with him; I'd taken care of him before," Galardi said, referring to Guymon.

Other prominent Las Vegas businessmen also frequented his club.

Galardi testified that Friday afternoons was known as Lawyer Day at Cheetah's because of all the private attorneys and district attorneys who filed into the club.

Galardi said he supplied Pete Christiansen, then his attorney, with about $500 cash to buy drinks and lap dances for the lawyers. Anywhere from 15 to 40 attorneys showed up on Fridays, he testified.

During his testimony, Galardi offered a glimpse into the lucrative business of operating strip clubs in the Las Vegas Valley. In 2002, Galardi earned $6 million operating Cheetah's alone.

During that same year, Cheetah's made $14 million in liquor sale profits by charging inflated prices for alcohol. A bottle of Budweiser cost the club 75 cents; Cheetah's charged $6.

Aside from alcohol, the club made money from strippers, who paid a house fee of $60 to $80 to work a shift.

"If you have 500 girls working a day, that's a lot of money," Galardi said.

Revenue was also generated from ATM machines; managers split the $7 surcharge for each transaction. Along with a $2,500 a day management fee that Galardi earned, he said he also received about $15,000 a month in ATM surcharges.

Galardi's plea agreement requires him to forfeit $4 million and spend no more than five years in prison. If he provides "substantial assistance" in helping the government win its case, Galardi could receive probation.

During opening statements last month, jurors were told to keep in mind that when someone is trying to get a more lenient sentence, that person has an incentive to lie, to make his or her testimony sound better in order to get more leniency. The jurors were urged to evaluate such testimony very carefully.

Review-Journal writer Alan Maimon contributed to this report.