Malone goes on trial in San Diego

Tuesday, May 10, 2005 | 11:09 a.m.

Federal prosecutors were to square off today against a former Clark County commissioner and two San Diego councilmen.

The trial is the first of two stemming from the federal investigation into an alleged cash-for-votes scheme involving the operator of several Las Vegas area strip clubs and the Clark County Commission. The investigation later expanded to include San Diego city councilmen, and opening arguments in that trial were delivered this morning in a San Diego courtroom.

In both cases, former Metro Police officer and Clark County commissioner Lance Malone was indicted on multiple counts. Federal prosecutors allege that Malone worked as a go-between for Michael Galardi, then-owner of topless clubs in Las Vegas and San Diego, and politicians in office in both cities.

Galardi is cooperating with the government. Malone's attorney, Dominic Gentile, said his client did not know of bribery attempted by Galardi in exchange for prior warning of police raids on the strip club in San Diego.

Galardi has pleaded guilty in both the San Diego case and the Las Vegas case, which is scheduled to go to trial Sept. 13 but is expected to be postponed.

On Friday Gentile reiterated that Malone is not guilty.

"He's feeling great," Gentile said. "We feel very strongly about our position down here."

Rick Wright, attorney for former Clark County Commission Chairwoman Mary Kincaid-Chauncey, said the Las Vegas trial is likely to be put off until at least the beginning of 2006.

Kincaid-Chauncey and former Commission Chairman Dario Herrera are co-defendants in the Las Vegas trial. Former Commissioner Erin Kenny has pleaded guilty to public corruption charges and is cooperating with the government.

Wright said he is not worried about what will happen in San Diego.

"The evidence in this thing is so voluminous that you don't have time to worry about somebody else's case," Wright said, referring to hundreds of pages of transcripts from federal wiretaps of the defendants and Galardi.

Christopher Blakesley, a professor at the UNLV Boyd School of Law, cautioned that what happens in San Diego, at least legally, will stay in San Diego. A decision for guilt or innocence does not imply the same result in the trial here.

"When it is prosecuted here, it is a brand new separate trial," he said, although the government could try to re-introduce the same evidence here.

In the real world, however, there is some spillover.

"Both sides will go to school, so to speak, in the San Diego trial," Blakesley said. And aggressive media coverage could affect potential jurors in Las Vegas.

"The jury here could be tainted by information that comes out in San Diego," he said. "That's not a matter of law but a matter of reality."

Lynne Henderson, a Boyd law school professor, agreed that the trials will be different because with one exception, there are different defendants, different lawyers and "they won't be deciding the same issues."

However, "it gives more credibility to the prosecution's case if they succeed," she said. "It gives them a boost."

A prosecution defeat might not give the defendants in Las Vegas the same sort of boost, she said.

"It's probably a wash," Henderson said. The prosecution could use a defeat in San Diego to hone its tactics and witnesses for the Las Vegas case.

"I don't think the U.S. attorney is going to back off," she said with a chuckle. "It could enhance the prosecution. It won't hurt that much."

In the days leading up to the San Diego trial, Malone sat down with KLAS TV Channel 8 reporter George Knapp and defended himself. In an interview aired Monday night, Malone predicted that "at the end of the day, when this trial is completed, the public is going to be outraged."

"I don't know why they (federal prosecutors) want me so badly," the former county commissioner and Metro Police officer said.

"Growing up, I didn't attend any of these places," Malone said of the topless clubs he represented.

Malone said he was raised in a church, didn't drink or smoke and went into modeling before becoming a police officer.

After one term on the commission, Malone opened a consulting firm and his first client was Michael Galardi.

"Once you become involved," Malone said of his role as go-between for Galardi with elected officials, "it's just a job."

Federal interest in the topless industry may be a question of morality, Malone said.

"One councilman was outraged that they'd go in there for an hour or two and watch to see if anybody touched anyone," Malone said.

He said if he worked for "Greenpeace or the hotel-motel association, I don't think we would be here right now. It wouldn't be an issue."

FBI agents spent almost three years conducting electronic surveillance in both states and most of the recordings have never been made public.

The investigation apparently began as a drug investigation in 1999. Agents thought Mike and Jack Galardi might be laundering drug money through their clubs. Those suspicions were not confirmed, but political connections emerged as the surveillance continued for 30 months.

Two years ago this month, FBI agents in Las Vegas and San Diego raided adult nightclubs and other locations as part of an investigation that has become known as G-Sting. Agents say they found evidence of political corruption in taped conversations involving club owner Mike Galardi, his employees, elected officials and others.

Hundreds of phone conversations were recorded between Malone and then Clark County commissioners Kenny, Herrera and Kincaid-Chauncey.

The FBI secretly set up surveillance operations in some of the best known Las Vegas restaurants where the suspects met.

Kenny has since pleaded guilty to corruption charges after she was taped offering to help Galardi with numerous issues. In one conversation, Kenny offered to help Malone get appointed as Clark County Parks and Recreation director, Knapp reported.

Kenny also urged county officials to speed up issuing a dust permit for Galardi's new home, under construction at the time, Knapp reported.

Agents heard Galardi on tape tell Malone that if Kenny came through with the permit they should "give her a bonus," according to Knapp's report.

Knapp also reported that as Kenny and Malone sat in front of Luv It Custard in January 2002, Kenny asked, "So how's everything going with the FBI?" Malone responded, "It's been real quiet." Agents had tapped into the car's satellite locator system to overhear that conversation, Knapp reported.

The FBI also recorded Herrera and Galardi at a Paradise Road steakhouse and at a breakfast meeting. Days later Malone met Herrera, as an FBI surveillance team watched, to allegedly hand over $30,000 in cash so the former commissioner and rising political star could get a furnished apartment as he moved out of his home during a separation, Knapp reported.