Monday, November 17, 2003
Copyright © Las Vegas Review-Journal

Federal indictment details Galardi's dealings with commissioners

Michael Galardi Strip club owner has pleaded guilty in Las Vegas and San Diego Jaguars, Michael Galardi's $15 million Las Vegas strip club, opened in spring 2002. REVIEW-JOURNAL FILE PHOTO

During a May 1999 meeting, County Commissioner Lance Malone seemed stumped by an unfamiliar name. Turning to county staff, he asked whether it was "Alardi" or "Galardi."

Malone and Michael Galardi would later become quite familiar.

Malone worked as a lobbyist for the strip club owner after leaving office in January 2001, and federal prosecutors say the two men bribed Las Vegas and San Diego officials.

Galardi has pleaded guilty in both jurisdictions and agreed to testify against the other defendants. In the Las Vegas case, they include Malone, County Commissioner Mary Kincaid-Chauncey and former Commissioners Erin Kenny and Dario Herrera.

Kenny also has pleaded guilty and agreed to testify for the prosecution. The others maintain their innocence.

The federal indictment returned Nov. 6 references numerous issues that came before the commission during the past few years. Among them are four issues detailed below:

ISSUE: A new ordinance extending distance requirements between adult-oriented businesses from 500 feet to 1,000 feet.

BACKGROUND: In 1999, Michael Galardi was planning to build Jaguars, the $15 million strip club that would open in spring 2002. A rival who had no prior involvement in adult clubs applied to convert the Sporting House fitness club into a massive strip club. Changing the distance requirement to 1,000 feet would block that project because the fitness club property was less than 1,000 feet from an existing adult bookstore.

MEETING DATE: Sept. 22, 1999.

DISCUSSION: Malone summoned Las Vegas City Councilman Michael McDonald to the commission meeting. McDonald urged commissioners to increase the distance requirement and place a moratorium on new adult clubs until the ordinance went into effect.

"What you are going to see while this law starts coming out, you're going to see opportunists: people that have never been in (the) adult business before start to creep into it," McDonald told the board.

Malone urged colleagues not to grandfather in those businesses that had already submitted an application. "I don't feel comfortable at all with any grandfathering; I prefer not to grandfather anyone in. I don't know, legally, if we can do that," he said.

Malone and McDonald were later hired by Galardi. McDonald, who was defeated for re-election earlier this year, has not been charged with any crime.

RESULT: Commissioners unanimously backed the increased distance requirement and made the moratorium on adult clubs applicable to existing applications. The move temporarily derailed the Sporting House's plans. But its owner successfully sued the county, and a new club, Sapphires, opened on the Industrial Road site six months after Jaguars.

BEHIND THE SCENES: The indictment alleges that one month after the September 1999 meeting, Galardi accompanied Malone to a car dealership and gave the sitting commissioner $20,000 toward a Ford Excursion.

ISSUE: Galardi's liquor license

BACKGROUND: In 1999, Galardi obtained a temporary liquor license as word spread that a rival wanted to open a strip club near Jaguars. Because of the 1,000-foot rule, only one of the clubs could operate. A lapse in Galardi's liquor license could have created an opening for that rival.

MEETING DATES: At least four commission meetings between September 1999 and September 2001.

DISCUSSION: In September 1999, commissioners considered whether to grant Galardi a temporary liquor license. Las Vegas police told the board Galardi had "established a pattern of unlawful activity" at his other clubs. Malone objected to the "innuendos."

"If these things can't be substantiated, they probably don't need to be brought up," he said.

When the commission considered whether to extend the temporary license in August 2001, Kenny made a motion for approval. That deviated from county procedures requiring business owners to obtain proper zoning before receiving a liquor license.

"I still don't understand the urgency and why there is a need to go ahead and approve it today," Commissioner Yvonne Atkinson Gates said.

Herrera participated in the meeting via telephone and hung up immediately after the vote on Galardi's license.

"He's going to a funeral, and he's actually one of the speakers at the funeral, and it starts in about 20 minutes," Kenny said.

Commissioners considered granting a permanent liquor license on Sept. 25, 2001. Las Vegas police attended to discuss their concern that Galardi's father, Jack, might have a financial interest in Jaguars.

Kenny opened the meeting by addressing this concern. "I think there was one question of ownership, and I understand Mr. Mike Galardi now has sole ownership of the property as well as the business," Kenny said.

RESULT: Commissioners granted the temporary liquor license in September 1999, extended it on several occasions and granted a permanent liquor license on Sept. 25, 2001. Only Gates voted in opposition on any of these occasions. There was no lapse in the license. Typically, temporary license approvals and subsequent extensions keep a license active for no longer than 90 days.

BEHIND THE SCENES: The indictment says Michael Galardi gave Kenny thousands of dollars in cash in early August 2001.

The indictment alleges that a day before the Sept. 25, 2001, meeting, federal agents intercepted a phone call in which Malone told Kenny, "Dario's on board, and Mary's on board. But you know Mike, he just wants you to do the speaking."

ISSUE: A use permit for Jaguars

BACKGROUND: Galardi's representatives appeared before the commission to seek a permit to serve alcohol on the premises. This was in addition to the liquor license discussed above.

MEETING DATE: Sept. 19, 2001

DISCUSSION: Las Vegas police Capt. Daniel Patrick Barry attended to express concerns about hidden ownership in Jaguars, but his presentation was cut short.

Kenny, Herrera and Kincaid-Chauncey said the meeting was not an appropriate setting for Barry's concerns.

"Sir, let me ask the DA a question because it seems as though you're going into license-suitability issues and this application is for land-use related issues, so your comments need to be addressed toward land use-related issues," Herrera said, interrupting Barry.

As Barry continued, Kincaid-Chauncey spoke up.

"We're discussing land use, not who the property owner is," Kincaid-Chauncey said.

"There would have to be something substantial brought to us, you know, that there are churches on four sides now, there are four elementary schools on four sides" of Jaguars, Kenny said. "Something that would be so compelling we would have to say we just couldn't put this use here anymore.

THE RESULT: Commissioners voted 4-0 to grant the use permit.

BEHIND THE SCENES: The indictment alleges that four days before the Sept. 19, 2001, meeting, Malone told Galardi he had spoken to "all three of them," and they indicated they would vote in favor of a pending matter affecting Jaguars. According to the indictment, Malone was referring to Kenny, Kincaid-Chauncey and Herrera.

The indictment alleges that five days before the hearing, Herrera told Malone he and his wife were separating. "So I might need a little bit of help getting, you know, getting a place and stuff, so, I'll let you know," he said.

The indictment alleges that Malone and Herrera met the day before the commission meeting, which was to take place on a Wednesday. Later that day, federal agents intercepted a telephone call in which Galardi asked Malone, "So, what's he expecting?"

"He was hoping, uh, three months in advance," Malone replied.

"Oh, we can do that. Just tell him I'll get it to him on Thursday," Galardi said.

ISSUE: Limited-touch ordinance for strip clubs

BACKGROUND: Concerned that strip clubs were becoming breeding grounds for prostitution, the commission considered restricting touching between strippers and customers. Such restrictions can be financially damaging to strip clubs.

MEETING DATES: A half-dozen commission meetings between June 2002 and December 2002

DISCUSSION: On June 19, 2002, commissioners placed a moratorium on adult business applications until new regulations were adopted.

At a July 2002 meeting in which the ordinance was approved, Kincaid-Chauncey expressed concerns that the final draft was more stringent than prior drafts she had reviewed.

"I did have the opportunity for input into this before I left town, and when I came back, things had been substantially changed, " she said.

At the July 2002 meeting, Las Vegas police officers testified that the proposed ordinance would be easier to enforce than the older law. But Herrera said the new law was unclear and noted that more permissible rules would still govern clubs located inside the city limits of Las Vegas.

"I have a question about whether or not this provides a competitive disadvantage to operators within Clark County limits," he said.

In August 2002, the commission brought the ordinance back to reconsider certain chapters.

Kenny, who missed the July meeting, supported Herrera's claim that the law was too vague. She said she was particularly confused by the way the ordinance described the portion of a customer's leg that a stripper was permitted to touch.

"I'm just curious now because my leg goes all the way up; is there some different definition of leg I need to know about?" Kenny asked.

Kincaid-Chauncey urged staff members to meet with representatives of the strip club industry.

"Some of these concerns could have been ironed out if the industry had been a little more involved and some of the commissioners were a little bit more involved," Kincaid-Chauncey said.

Herrera, who was the only commissioner to vote against the ordinance in July, reiterated his opposition.

"Of course, as the only no vote, I would prefer we rescind the whole ordinance because I believe we've already wasted too much of taxpayers' time," Herrera said.

RESULT: In July 2002, commissioners voted 5-1 to approve the ordinance. In August 2002, the board voted unanimously to suspend enforcement of the law until new recommendations were made. In December 2002, the commission unanimously approved an ordinance that was not as tough as the one they approved in July. For instance, the final ordinance permitted G-string tipping.

BEHIND THE SCENES: The indictment says that in April 2002, Malone told Kincaid-Chauncey in a voice-mail message that Galardi supported her backing another commissioner's selection for a judicial position in order to have that commissioner change her position on a provision in the no-touch ordinance. This proposed no-touch ordinance was far more stringent than the limited-touch ordinance, and it never even made a commission agenda.

In June 2002, Malone left a voice-mail message for Kenny in which he referred to her concerns about the political repercussions she might face if she opposed the no-touch ordinance. He said Galardi "wouldn't want you to do anything that would jeopardize your, your, your ability to move forward," according to the indictment.

The day before the limited-touch ordinance was adopted in July 2002, Kincaid-Chauncey and Malone discussed the likelihood the ordinance would pass and the repercussions she would face if she voted in opposition, according to the indictment.

"I don't think we should make it a hill to die for," she said.

"If it looks like it's a slam dunk, and you know, I'm sure Mike's not gonna want you to hang your head out there and get it chopped off," Malone said.

In August 2002, Malone told Galardi that Kenny, Kincaid-Chauncey and Herrera would vote to reconsider the limited-touch ordinance, according to the indictment:

"You've had Dario from the very beginning. ... We've developed that relationship a long, dude, how many times have we played golf with him, and, you know, when we hired him on. I mean, dude, that's your, that's your person. Erin's your person. ... Mary's your person."