Tuesday, Feb. 10, 2004 | 11:26 a.m.
Topless club owner Jack Galardi's lawyer said Monday Las Vegas city officials were being either greedy or vindictive in their plan to file a second complaint over the strip club Cheetahs' liquor license.
"Either the city intended to do that in the first place, in which case they were just trying to get a million-dollar fine before they came back for a second bite, or it's in retaliation for La Fuente (Cheetahs' parent company) exercising its right to have access to the courts," lawyer Dominic Gentile said. "And that's a First Amendment right, to petition for the redress of grievances."
But Mayor Oscar Goodman said "this has nothing to do with Mr. Gentile going to court. That's what lawyers are supposed to do ... When you do that you assume the risk."
When asked whether that reference couldn't be considered retaliation, Goodman said the city simply was following up multiple causes to consider discipline against La Fuente, the current holder of the liquor license.
"There are all sorts of grounds (for discipline), and we're proceeding diligently. Mr. Gentile feels he's doing his job properly and I feel I'm doing my job properly," said Goodman, who had previously called Galardi's appeal a "slap in my face."
The City Council ordered the fine of just over $1 million for criminal acts committed by Jack Galardi's son Michael while the younger Galardi was a 40 percent owner of La Fuente. Last fall, after he pleaded guilty to corruption charges first in San Diego and then in Las Vegas, he retired his share of the company, giving full ownership of La Fuente to his father, Jack Galardi.
The city's complaint was based only on Michael Galardi's guilty plea in San Diego. The city's second complaint -- which could be approved as soon as the council meeting of Feb. 18, and would be followed by a hearing to assess potential penalties -- would be based on Michael Galardi's guilty plea in Las Vegas.
The fine amount stemming from the first complaint was based on city statutes that allow up to $1,000 a day for each day of violation -- between August 2000 and May 2003. However, Gentile is arguing that the city has no jurisdiction to discipline the license, because Michael Galardi has not been convicted.
A section of the city code states that disciplinary action is warranted if the licensee or any of its principals have been convicted. However, another section states that the licensee is liable for acts committed by its principals, and does not mention the need for a conviction.
Gentile argues that when two portions of a code are in conflict, the more specific -- in this case, requiring a conviction before discipline can be enforced -- takes precedence.
District Judge Jennifer Togliatti on Friday issued a stay on payment of the fine until she received more information from the city about what the council's intent was when it passed the rules years ago.
That could include transcripts of the council meetings, for example. Togliatti set Friday as the first deadline to assess the information. She did not set a deadline for ruling.
Goodman said Monday morning that he also asked the city attorney to look into a second potential violation -- not coming to council for approval of an ownership transfer when Michael Galardi gave up his share in the company to his father.
The city rules say that ownership transfers of more than 10 percent must be approved by council, but Gentile has argued that Michael Galardi simply retired his 40 percent stake in Cheetahs in October, and no ownership interest was transferred.
Councilman Gary Reese said it's appropriate for the city to explore every avenue in assessing how to discipline the liquor license for La Fuente.
"In the first hearing the attorney said, 'Don't kill us, give us a chance,' and we gave them a chance," said Reese, who supported his colleague Janet Moncrief's motion to revoke the liquor license held by La Fuente, and when that failed, voted in favor of the fine. "Apparently they don't want to pay a fine."
Councilwoman Janet Moncrief, in whose district Cheetahs operates, pushed for revoking Cheetah's license during the Jan. 7 meeting, echoing the city lawyer's arguments that the crimes to which Michael Galardi admitted struck to the heart of the regulatory system. She said she was looking forward to continued council discussion of the issue.
"I think (Jack Galardi) might get more than what he wanted by doing this (appealing the fine)," Moncrief said.
As for concerns that if Cheetahs lost its liquor license it would have to close, putting hundreds of people out of work, Moncrief said: "I feel there's enough sexually oriented businesses so those people would have a job within a day, so that's not a concern."
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