Thursday, January 08, 2004
Copyright © Las Vegas Review-Journal

CHEETAH'S OWNER: Strip club must pay $1,095,000

City Council gives Jack Galardi 30 days to settle fine or lose license

Jack Galardi listens at Wednesday's Las Vegas City Council meeting. Photo by Gary Thompson.

After 90 minutes of evidence and argument, the fate of the Cheetah's strip club and its liquor license came down to how quickly owner Jack Galardi could come up with $1,095,000.

The Las Vegas City Council voted on Wednesday to fine La Fuente Inc., which operates Cheetah's and owns its liquor license, as punishment for Michael Galardi's guilty plea last year to federal corruption charges in San Diego.

Michael Galardi jointly owned La Fuente with his father, Jack Galardi, at the time of his plea. The father has since became its sole owner.

Mayor Oscar Goodman initially asked that the money be paid in a week. "If it's not paid within a week the (liquor) license will be revoked," he said.

Attorney Dominic Gentile, representing Jack Galardi, argued for more time.

After consulting with the elder Galardi, who sat front and center during the disciplinary hearing, Gentile said, "I'd ask for six months."

"If I were a banker, I'd loan him the money this afternoon," Goodman said of Jack Galardi, who owns an empire of strip clubs spanning the country. "Thirty days, take it or leave it."

City staff had recommended revoking Cheetah's liquor license. But Goodman moved to fine the company and allow it to maintain its license instead, saying Jack Galardi did not participate in his son's criminal activities and that closing the club would put out of work 250 employees and 1,500 strippers who work as independent contractors.

"We're talking about people here," Goodman said. "Jack Galardi didn't plead to that charge. Michael Galardi did. Jack Galardi unfortunately has to assume the sins of his son by being a partner with his son."

The council approved the fine 4-2, with Councilwoman Janet Moncrief and Councilman Lawrence Weekly opposed and Councilman Michael Mack abstaining.

The $1,095,000 represents a fine of $1,000 a day from August 2000 to May 2003, the period in which Michael Galardi bribed San Diego officials in a failed effort to loosen the city's regulations governing contact between dancers and clients.

An earlier motion by Moncrief to revoke Cheetah's liquor license failed in a 3-3 vote.

"Cheetah's punished its own employees by its own conduct," Moncrief said.

The freshman councilwoman, who represents the district where Cheetah's is located, had drawn fire for issuing a news release earlier in the week urging colleagues to support her in revoking the license. Both Goodman and Councilwoman Lynette Boggs McDonald characterized it as an effort to "coerce" them into voting with her.

Goodman, Boggs McDonald and Councilman Larry Brown opposed Moncrief's motion.

While the council was divided on the type of punishment, they unanimously agreed in a separate vote that the company should face some form of discipline.

By code, the city may revoke a liquor license if the owner is guilty of a crime or is shown to be dishonest or corrupt. The city also may hold a corporation, like La Fuente, liable for the acts of one of its principals.

William Henry, senior litigation counsel for Las Vegas, said Michael Galardi's actions were particularly egregious because they involved bribing members of the San Diego City Council for his own benefit.

"I cannot conceive of a more serious disciplinary offense having to do with a liquor licensee," Henry said. "He (Michael Galardi) conspired to go right to the heart of the regulatory authority, the political officials who make the rules, and paid them bribes to benefit his adult entertainment business."

Omitted from the city's case against La Fuente was Michael Galardi's guilty plea to political corruption charges in Las Vegas.

On Oct. 24, Michael Galardi appeared before U.S. District Judge James Mahan and admitted paying between $200,000 and $400,000 to "certain public officials" in exchange for their influence over matters affecting his Jaguars and Cheetah's strip clubs.

The complaint was initiated before the Las Vegas plea was entered and the city has no procedure for amending a complaint once it is begun, Henry said.

Gentile didn't dispute Michael Galardi's actions were grounds for discipline. "I'm not here to represent him. I'm not trying to say in any way he's a suitable person," he said.

But because Michael Galardi no longer owns or is allowed on the premises of Cheetah's, Gentile argued any action against the company would only punish innocent individuals.

"You're not punishing him. He's already out," Gentile said. "You'd be punishing the people who work there. And you'd be punishing yourself. People come into the city for that business."

Many of the strippers and employees who had worked at Michael Galardi's two other valley clubs, Jaguars and Leopard Lounge, now work at Cheetah's, Gentile said. Jack Galardi also has acquired those clubs in recent months.

Jaguars closed after Clark County officials revoked its liquor license. Leopard Lounge has been closed for renovations.

Revoking Cheetah's liquor license most likely would have led to that club's permanent closure. La Fuente obtained the license before the city instituted a 1,500 foot distance requirement. The topless club Crazy Horse Too is within that boundary.

Had the council revoked Cheetah's "non-conforming" license, Jack Galardi would have had only 90 days in which to qualify for a new license.

Las Vegas police present at Wednesday's meeting said the suitability investigation they have launched for Jack Galardi's application for a Clark County liquor license will take about nine months to complete.

"If you do revoke the license, it's the death penalty," Gentile said.

Gentile said there's no guarantee that Jack Galardi will be able to meet the 30-day deadline to come up with the $1,095,000 either.

Gentile said during Wednesday's meeting the elder Galardi asked him, "How am I going to get that kind of money?"