Las Vegas Sun

November 22, 2014

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Galardi bugged out of FBI sting

FBI agents came within hours in late August 2003 of wiring up topless club owner Michael Galardi and sending him to a meeting to set up then-Las Vegas Councilman Michael Mack, FBI reports obtained by the Sun show.

Galardi canceled the 5 p.m. Aug. 27 meeting, which was to take place at his office at the Jaguars topless club, after negotiations aimed at striking a plea agreement on corruption charges temporarily broke down with federal prosecutors that morning, the FBI reports show.

In earlier discussions with FBI agents, Galardi claimed that he had given Mack, who is identified in the reports as "public official #2," thousands of dollars in cash to further Galardi's business interests in the city.

Galardi ended up pleading guilty on Oct. 24, 2003, to a racketeering charge of bribing other public officials, and he agreed to get out of the topless club business and continue his cooperation with the government. He told agents that he provided cash and favors to an array of local elected leaders, judges, prosecutors, police officers and even FBI agents.

Galardi is expected to be one of the government's star witnesses in the corruption trial now under way of former Clark County Commissioners Dario Herrera and Mary Kincaid-Chauncey. The former commissioners are accused of taking cash from Galardi to further his business interests.

As he sought his deal in 2003, Galardi offered to help the FBI gather incriminating evidence on Mack "regarding an ongoing corrupt relationship with Galardi," one FBI report said.

"The last time Galardi paid PO #2 a bribe was a $10,000 cash payment made a couple months before the May 14, 2003, searches," the report said. "Galardi said PO #2 was going broke and wanted money."

May 14 was the date agents executed search warrants at Jaguars and Cheetahs and elsewhere in town as part of their investigation into allegations Galardi had given money under the table to public officials in Southern Nevada.

Mack, who did not run for re-election last year following a term marred by ethical missteps, is among the latest public officials identified by the Sun in the heavily censored FBI reports of Galardi's debriefings with agents. The reports do not show whether Galardi ever wore a wire for the FBI.

In an interview with the Sun on Wednesday, Mack strongly denied any wrongdoing, including accepting cash or any other favors from Galardi.

"These claims are ludicrous," Mack said. "He's lashed out at a lot of public officials and judges. He's grabbing."

Mack said he knew Galardi, but he added: "I didn't have a really close relationship with the guy."

Mack also said the FBI has not interviewed him about Galardi's allegations.

Although his name is blacked out in the reports of the FBI debriefings of Galardi, which occurred from July 15 through Oct. 31, the Sun has identified public official #2 as Mack from the descriptions of the official in the reports matched with independent research and information from sources familiar with Galardi's claims.

In one FBI report, agents offered the best clue about Mack's identity by including public official #2's ties to another strip club, Treasures, when referring to the official.

"Public official #2 is working as a consultant to competing strip club," the FBI reported in September 2003. The FBI went on to report: "Public official #2 was in Galardi's strip club Jaguars about three weeks ago recruiting girls to work at Treasures."

It has been widely reported that Mack was a consultant to Treasures dating back to his City Council tenure. And Mack told the Sun on Wednesday that he still does some "government relations" consulting for Treasures.

In September 2002 FBI wiretaps played this week at the trial of Herrera and Kincaid-Chauncey, Galardi was overheard saying that he was looking to Mack for help in trying to get Jaguars annexed into the city from the county, which was getting tough on topless clubs at the time.

In an FBI report of a July 30, 2003, interview with Galardi, agents said Galardi provided details of his dealings with Mack.

"Public official #2 was a frequent visitor to the Cheetahs Topless Club and Galardi estimated providing public official #2 with at least $25,000 in cash," Galardi later told the FBI. "Galardi described public official #2 as arrogant, very demanding, and self-centered.

"Galardi estimated that public official #2 would visit his establishment at least once a week and that he (Galardi) would comp sexual favors that were performed on public official #2. Galardi emphasized that public official #2 never paid for anything and that public official #2 always expected sexual favors from the girls at Cheetahs."

Galardi told the FBI that he became tired of public official #2's demands "and actually taped public official #2 being serviced by one of the dancers at the Cheetahs Topless Club."

Following the May 14, 2003, raid on Galardi's clubs, the FBI reported that it had seized a videotape of Mack receiving a lap dance at Cheetahs.

In another report of Galardi's July 30 interview with the FBI, agents said Galardi told them that public official #2 had thumbprint access to the exclusive Grand Havana Room at Jaguars, a VIP area where Galardi contended sexual favors were performed. Former Las Vegas Councilman Michael McDonald, once a paid consultant to Galardi, also had thumbprint access to the VIP room, Galardi told the FBI.

Others, Galardi said, had to pay a lifetime membership charge of $20,000 for access to the room - which was equipped with cameras - and Galardi explained that he was the only individual who could authorize sexual favors there.

The FBI reports made it clear that public official #2 was a member of the City Council.

"Galardi emphasized that even though he had McDonald for his use as a councilman, public official #2 was used when McDonald would be absent for voting during council hearings concerning the adult entertainment business agendas," one report said.

"Galardi stated that public official #2 extorted him by demanding money in return for not passing ordinances detrimental to Galardi's business interests. Galardi stated to agents that he will eventually get out of the strip club business because, in all honesty, he is held hostage by the politicians."

Galardi told the FBI that he and public official #2 discussed the licensing of dancers and prohibition of dancers under age 21 in Las Vegas strip clubs. They also discussed a Metro Police letter urging the city to abide by a Nevada attorney general's office ruling that dancers under age 21 should not be allowed to perform in Nevada.

"Public official #2 told Galardi that he was against the prohibition of dancers under the age of 21," the FBI reported. "Galardi stated he thought he could offer to put public official #2 on the Cheetahs tip-out, something that would be very desirable for public official #2 if public official #2 would make the Metro letter go away."

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