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The Talk of Las Vegas Is Operation G-String

Current and former county officials are accused of taking bribes from a strip-club owner.

December 21, 2003|John Johnson | Times Staff Writer

LAS VEGAS — FBI agents burst into Jaguars -- an upscale "gentleman's club" a couple of blocks off the Strip -- just as the shift was changing in the early afternoon and the strippers were in their dressing room getting ready for the next performance.

Hearing the commotion outside his office and fearing a fight had broken out in the lounge, the club manager jumped to his feet, threw open the door -- and found two agents pointing guns at him.

"They had this battering ram and started battering the liquor room door," said the manager, who identified himself only as Joe C. "Initially, I was in shock."

The dramatic raid in mid-May was the first public confirmation of a sweeping corruption investigation, dubbed Operation G-String, that has roiled the nation's gambling capital and shined a spotlight on the city's booming, fast-growing strip-club industry.

A 42-page federal indictment unveiled last month accuses four current and former Clark County elected officials of accepting up to a total of $400,000 in bribes from Michael Galardi, a high-profile strip-club owner.

Galardi, 42, who along with his father owns a string of strip clubs across the country, has pleaded guilty to one count of racketeering and is cooperating with the government. His attorney declined to make Galardi available for comment.

The purpose of the bribes, according to the indictment, was to crush Galardi's rivals in the competitive strip-club industry that has proliferated just out of sight of the Strip's world-famous hotels. Galardi also wanted to defeat new rules designed to crack down on illicit sexual activities in the clubs, prosecutors say in court papers.

Much of the evidence against Galardi and the others comes from phone conversations the government was listening in on, records show.

Copies of phone excerpts released by U.S. Atty. Daniel G. Bogden show that the Clark County commissioners were asking the strip-club owners to fund everything from upcoming election campaigns to tuition for an Olympic ski school.

One former commissioner (a commissioner is like a county supervisor in California) was overheard boasting to a Galardi associate that he was doing "my duty to God and country" by helping out the strip-club owner, the indictment said.

The same commissioner, Erin Kenny, told the Galardi associate just before the 2002 November election that she was desperate for money, court papers show. "Tell me what I've got to do, but I've got to have money from him," Kenny said. "... I'm on my knees begging."

The prosecutions resulted from a joint investigation by the FBI, the Las Vegas Metropolitan Police Department and the Internal Revenue Service. Bogden's office, along with attorneys from the Department of Justice's organized crime and racketeering section, is prosecuting the case.

Some of the government's tactics are being criticized as going too far. One target is the alleged use of the Patriot Act -- passed in the wake of Sept. 11 to combat terrorism -- to quickly obtain financial records of investigation targets.

"I didn't vote for the Patriot Act to allow the FBI to go after strip-club owners," Rep. Shelley Berkley (D-Nev.) said in an interview.

The scandal, with its bizarre twists and turns, has replaced the tiger-mauling of Roy Horn as the hot topic of gossip around the craps tables on the Strip. Longtime Vegas watchers say Operation G-String is probably the biggest scandal to hit the city since the early 1980s.

"The last time we had anything approaching this was Operation Yobo in 1982," said Guy Rocha, Nevada's state archivist. Several state legislators went to prison for accepting bribes from an undercover FBI agent posing as a land developer.

Those accused in the latest scandal -- Kenny; former commissioners Dario Herrera and Lance Malone; and current Commissioner Mary Kincaid-Chauncey -- don't have the same political wattage attached to their names as those caught in Operation Yobo, Rocha said. But they had a bright future.

"These were some of the fair-haired boys and girls of the Democratic Party," Rocha said.

Kenny, 42, ran for lieutenant governor in 2002. Herrera, 30, had made a run at Congress and was considered an articulate leader-in-waiting of the fast-growing Latino community in Nevada. Kincaid-Chauncey is a 65-year-old grandmother respected for her work with foster children.

Herrera, Malone and Kincaid-Chauncey have pleaded innocent. Kenny pleaded guilty to three counts of wire fraud and conspiracy. Like Galardi, she is cooperating with the government. Also like Galardi, she faces a 20-year prison sentence on the most serious charge.

Lawyers for those indicted declined to make their clients available for comment.

As part of his guilty plea to racketeering, Galardi has agreed to forfeit $3.85 million and give up his interest in the clubs. He also awaits sentencing after pleading guilty to attempting to bribe three San Diego city councilmen in connection with his club in that city.

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