City Council makes deal with Galardi

Sito Negron

Thursday, Feb. 19, 2004 | 11:47 a.m.

Lawyer Dominic Gentile handed Las Vegas two checks totaling $1.017 million Wednesday, payable in two weeks, after the City Council agreed not to pursue further charges against the liquor license for Cheetahs, a topless club owned by Jack Galardi.

"Last night, I considered changing my name to 'City of Las Vegas,' " Gentile joked, in an exchange in which Mayor Oscar Goodman suggested, tongue-in-cheek, that the million-dollar checks could be made payable to Goodman on behalf of the city.

The vote was 5-1 in favor of the deal, with Councilwoman Janet Moncrief opposing. Councilman Michael Mack abstained, because he is a paid consultant for competing strip club Treasures.

The affable end of the legal wrangling -- which saw Las Vegas levy the $1.017 million fine Jan. 7, followed by an appeal by Gentile, followed by a city second complaint against Galardi's license -- was in contrast the opening of the discussion, in which each side put a more serious legal foot forward.

Goodman opened the discussion by saying that council had been fair in its Jan. 7 action, acceding to Gentile's request not to pull the liquor license entirely, something that would have closed the club. He also said that the city was not being "vindictive or retaliative" in filing a second complaint against the license.

"We had been requested not to (impose) the death penalty," Goodman said. "We imposed a fine we considered appropriate at the time ... thereafter the corporation appealed."

Once that happened, Goodman said, "the rules changed. Mr. Gentile is smart enough to know the rules change when you go to court." The idea that the city retaliated for the appeal by filing a second complaint may have been due "in small part" to Goodman's comment that the appeal was a "slap in my face," the mayor said.

Following Goodman's remarks, Gentile read into the record a letter he sent council Tuesday, describing the settlement offer.

"The seeking of this judicial review should not be interpreted by you as dissatisfaction with the quality of the discipline you imposed," Gentile read. "Although the amount of the fine was miscalculated and the largest ever imposed by this body, La Fuente Inc. and Jack Galardi are grateful that it allows the business to continue."

La Fuente, now wholly owned by Jack Galardi, is the parent company of Cheetah's, and holds the liquor license for the topless club.

The City Council ordered the fine of just over $1 million for criminal acts committed by Jack Galardi's son, Michael Galardi, 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, Michael Galardi retired his share of the company.

The fine amount was based on city statutes that allow up to $1,000 a day for each day of violation -- between August 2000 and May 2003.

Acting for Jack Galardi, Gentile appealed the fine, claiming in court that the city did not have jurisdiction to impose the penalty, which he called "arbitrary and capricious.'

He noted that two portions of the city code conflict over whether a conviction is required for disciplinary action, and argued that when one part disagrees with another, the more specific -- in this case, requiring a conviction -- takes precedence. Michael Galardi is not considered convicted until his plea is entered, a procedure that can be lengthy.

Gentile said that the city's second complaint was "stunning, but it provides an opportunity for a global settlement, something that we have always sought."

The council action Wednesday was to decline the second complaint. As part of that, council directed staff to nail down the details of an agreement and put it on the next meeting agenda as an action item.

The written agreement generally would prevent the city from filing complaints against Jack Galardi for acts committed by anyone other than him. The details -- such as the time period covered by the agreement -- remain to be settled.

Councilwoman Janet Moncrief, who strongly opposed allowing Galardi to keep the license, declined to comment after the meeting. During the meeting, she made a statement saying she would oppose any penalty short of revocation, and contrasted the city's fine with county actions.

After the discussion, Goodman turned to Moncrief and asked her if she wanted to make a motion. Moncrief, whose Ward 1 contains Cheetah's, declined.

Goodman then made a motion to accept the fine and enter into the settlement with Galardi. However, because that item was not posted, City Attorney Bradford Jerbic recommended the council vote up or down on the second complaint.

Goodman then made the motion to deny the second complaint.

Michael Galardi owned two clubs -- Jaguars and the Leopard Lounge -- in the county, which took his liquor license because of the guilty pleas. Those clubs now belong to Jack Galardi, who is willing to sell them, said Suzanne Coe, an East Coast lawyer who represents him.

Councilwoman Lynette Boggs McDonald, who voted in favor of the fine and has been at odds with Moncrief since she issued a press release urging her colleagues to revoke Cheetahs' liquor license, took issue with the comparison with the county.

First, she said, the Cheetahs license is a "nonconforming use," which means if it is revoked, a new owner in the same location will not be allowed to get a liquor license.

Also, Boggs McDonald said, the county does not have the authority to levy a fine as an alternative to revocation. And, she said, Michael Galardi was a 100 percent owner of the clubs in the county. At Cheetahs, he was a 40 percent owner.

In other action Wednesday, the council, with little discussion, revoked Michael Galardi's liquor license for Blue Heaven Bar, at 2025 E. Charleston. The reason was Galardi's guilty plea in relation to charges of bribing San Diego city council members to gain favorable treatment for his clubs in that city.

Nobody appeared to defend Galardi's license. The action took place just before the city discussion on what to do about the liquor license for Cheetah's.

In assessing the penalty, city staff told council that an anonymous caller the day before had said that Michael Galardi sold the liquor license. Goodman said, "We don't do business on the basis of anonymous phone calls."