Thursday, May 15, 2003
Copyright © Las Vegas Review-Journal

STRIP CLUBS SEARCHED: Raids seek corruption clues

Feds say former County Commissioner Malone is 'a focus' of investigation

FBI agents who raided Cheetah's leave the topless club Wednesday afternoon after searching the business for evidence in an ongoing government corruption probe. Photo by K.M. Cannon. Topless dancer Kaissa Maura, 25, talks to an FBI agent Wednesday afternoon as she leaves Cheetah's. Photo by K.M. Cannon. Lance Malone Identified as 'a focus' of government corruption probe Click image for enlargement. FBI agents mill around the front door of Jaguars, near Desert Inn Road and Interstate 15, shortly after raiding the 25,000-square-foot topless club Wednesday afternoon. Photo by Craig L. Moran. Erin Kenny Michael McDonald Dario Herrera Emily Herrera Mary Kincaid-Chauncey

The FBI on Wednesday raided the Las Vegas-based Galardi family's strip clubs here and in San Diego as well as the offices of three San Diego City Council members as part of a two-year government corruption probe.

Former Clark County Commissioner Lance Malone is among the targets of the investigation, in part for his work on behalf of the Galardis after being voted off the commission in 2000, according to federal law enforcement officials involved in the case and Clark County government officials.

"He is a focus," said a federal law enforcement official who spoke on condition of anonymity.

About 1 p.m., FBI agents toting assault rifles converged on Cheetah's and Jaguars, two topless cabarets near Interstate 15 and Sahara Avenue that are operated by father-son partners Jack and Mike Galardi. Agents also raided Galardi Enterprises in downtown Las Vegas and an unidentified private residence in Southern Nevada.

According to a source who viewed the FBI search warrant, agents sought all ''campaign contribution records from 1997 made on behalf of or by'' the strip clubs and several businesses connected to the Galardis.

According to the source, the warrant also asked for all ''records including ledgers or journals or handwritten notes of payments or gifts'' to individuals that include current and former elected officials.

The source said the FBI sought records relating to Las Vegas City Councilman Michael McDonald; former Clark County Commissioner Erin Kenny and her husband, John; former County Commissioner Dario Herrera and his wife, Emily; County Commissioner Mary Kincaid-Chauncey and her husband, Robert; and several officials in the county's building inspections division.

A federal law enforcement official and two Clark County government officials said agents sought to contact several of these individuals while the raids were unfolding Wednesday.

"Some of them are targets. Some of them are not," the federal law enforcement official said. "Some are only witnesses."

Multiple messages left for Malone, Kenny, the Herreras and Kincaid-Chauncey were not returned Wednesday.

McDonald confirmed Wednesday that he had been interviewed by FBI agents as part of their inquiry, but he did not say whether he was contacted as a target or simply to provide information.

McDonald said he and Mike Galardi have been friends for years. He said he also is friends with many of Mike Galardi's employees, some of whom were his schoolmates at Western High School.

The councilman said he always has disclosed these relationships and abstained from voting whenever the council considered matters in which Mike Galardi had an interest.

"I've never voted on his issues," McDonald said. "I've always disclosed and abstained on the issues of his employees."

Word of the inquiry comes as the two-term councilman faces a tough re-election campaign against challenger Janet Moncrief. Early voting starts Saturday.

McDonald, who like Malone is a former Las Vegas police officer, said he plans to address the matter publicly in greater detail during the coming days.

"Our books are open," he said. "We are prepared to do everything we can if there are any questions in the public's eyes."

Two FBI agents arrived without warning at the County Government Center about 3:30 p.m. Wednesday and asked to speak with Ardel Jorgensen, director of the Business License department.

A Clark County government source said it was obvious that Jorgensen was interviewed as a potential source of information, not as a target of the inquiry.

The source said the agents were concerned chiefly with a 1999 County Commission vote that prevented police from further delving into the background of Jack Galardi.

The 4-3 vote in which Malone, Herrera, Kenny and Commissioner Myrna Williams voted to end the police investigation also paved the way for Jaguars to open.

Before the controversial 1999 vote, Jorgensen pleaded with commissioners to approve sending two Las Vegas police officers to Georgia to learn more about a possible grand jury investigation into Jack Galardi's Atlanta strip clubs.

The police investigation was part of a routine background check conducted when business owners apply for new liquor licenses, such as the ones the Galardis were seeking for Jaguars.

Jorgensen told commissioners that backing the police trip to Atlanta was crucial to learn more about the grand jury investigation before issuing a business license.

In their interview with Jorgensen on Wednesday, the agents repeatedly mentioned "money for favors," the county source said.

"They were asking about favors done for the Galardi family," the county official said of the FBI agents' interview with Jorgensen.

Malone, Herrera, Kenny and Williams said at the time it would be unfair to hold up Jack Galardi's project because of a grand jury investigation that the business owner told the commission he hadn't been informed about.

Williams could not be reached for comment Wednesday.

The vote in favor of the Galardi family was a departure for Malone, who frequently pushed for more stringent restrictions against adult-oriented businesses. In August 1999, he even proposed increasing the distance requirements between adult businesses.

But after a conflict-of-interest scandal led to his defeat in the 2000 election, Malone went to work on behalf of the Galardis.

Malone was hired by the Galardis' attorney in early 2001 as a consultant tasked with persuading the city of Las Vegas to resolve a legal battle with Cheetah's.

Las Vegas Mayor Oscar Goodman said when he met with Malone in January 2001, Malone never told him what he wanted from the city.

"For the first 45 minutes, I wasn't sure what was happening," Goodman said at the time. "I thought he was asking for a job. After I said that to him, he segued into that he was doing some work for the Galardis."

The FBI said Wednesday's raids at Cheetah's and Jaguars were not related to the high-profile raid earlier this year on Crazy Horse Too, a topless club formerly owned by Jack Galardi. That Feb. 20 raid was conducted as part of a lengthy and ongoing racketeering investigation targeting the club's current owner, Rick Rizzolo.

"They're completely unrelated," FBI Special Agent Bob Loosle said in an interview 10 minutes after he and about two dozen others raided Cheetah's, 2112 Western Ave.

Several topless dancers leaving that club moments after the raid said they were terrified when agents entered the club with weapons drawn.

"They were screaming, 'Get your hands up,' " said 39-year-old dancer Janie Davis. "These were big guns, and they were pointing them right at some of the girls."

Kaissa Maura was freshening up in the club's dressing room after making $100 performing lap dances when she turned around and saw a female FBI agent pointing a gun at her.

"She said, 'Do you have any weapons?' and I was like, 'I'm naked. There's nowhere for me to hide an Uzi,' " said Maura, 25, who dances under the stage name "Salsa."

Patrons inside were released immediately while the dancers were herded into the club's VIP area, the strippers said.

The women said they were escorted four at a time to the locker room, where agents asked whether they had any contraband.

Maura said she admitted to an FBI agent that she had cocaine and then showed it to her. But after she told the agent she had no prior record, the agent confiscated the drugs and allowed her to leave the club.

Meanwhile, management at Jaguars, 3355 Procyon St., did not seem overly troubled by their surprise guests from the federal government.

"Our environment is always under scrutiny," General Manager Rich Buonantony said. "It's just the way that it is. We're giving them access to whatever they want. When you do the right thing, you don't have a thing to worry about. Everyone has the right to investigate. They're paid to do their job, and we respect that."

Galardi attorney Peter S. Christiansen declined comment while visiting Jaguars on Wednesday.

Simultaneous to the Las Vegas raids Wednesday, FBI agents in San Diego raided the Galardi-owned Cheetah's strip club in that city, as well as the offices of Councilman and Deputy Mayor Ralph Inzunza, Councilman Charles Lewis and Councilman Michael Zucchet.

The San Diego Union-Tribune reported in August 2001 that Malone had helped Mike Galardi try to obtain city permits for a topless club in San Diego.

Mike Galardi contributed at least $2,000 to Lewis and $1,500 to Inzunza in the politicians' most recent campaigns, the newspaper reported. Lewis told the Union-Tribune that Malone was the contact between his campaign and Mike Galardi.

Citing sources close to the federal investigation, the Union-Tribune reported on its Web site Wednesday evening that the recently revealed probe might involve campaign contributions.

A Clark County government source said the FBI agents who visited the Government Center were not concerned with campaign contributions that were reported properly.

A search of recent campaign contributions showed that Mike Galardi made a $5,000 contribution to county Assessor Mark Schofield; donations to David Roger in his successful bid for district attorney, which later were returned; and a $5,000 contribution to the Nevada Democratic Party.

Two Supreme Court justices, Bill Maupin and Mark Gibbons, accepted $5,000 contributions from Mike Galardi in 2002.

Schofield said he asked Malone whether Galardi would contribute to his campaign, and Malone delivered a $5,000 check. The assessor said he had provided Malone information about property and zoning issues but never talked to Galardi. No request for favors accompanied the check, Schofield said.

Nevada's last major multiple-suspect political corruption investigation broke in May 1982 under the code name of Operation Yobo. Five politicians were convicted for accepting bribes from an undercover FBI agent posing as a wheeler-dealer seeking favors. His exchanges were taped secretly.

Five Nevada politicians either pleaded guilty or were convicted. Among those charged were former state Sen. Floyd Lamb, former state Sen. Gene Echols, former Clark County Commissioner Jack Petitti, former Assemblyman Woodrow Wilson and former Reno City Councilman Joe McClelland.

Jaguars and Cheetah's opened for business following the raids. No arrests were made.

Review-Journal writers Michael Squires, Frank Geary and Frank Curreri contributed to this report.