Las Vegas Sun

March 18, 2024

Power of Triple Five

During Erin Kenny's testimony last month at the corruption trial of two former Clark County commissioners, federal prosecutors asked if she had taken bribes from anyone other than ex-strip club owner Michael Galardi.

"Yes, one other party," replied Kenny, a former county commissioner who had also taken bribes from Galardi but later agreed to cooperate in the government's case.

In 2000, Kenny said, she began receiving $3,000 a month in cash from Triple Five Nevada Development Corp., one of Southern Nevada's most prominent real estate developers. The payments began just months after she voted in favor of the company's ill-fated casino proposal in Spring Valley and the money flowed for nearly three years, she said.

Kenny added that Triple Five started paying her only after she asked for a job. The company knew it had no other business coming before the commission, she said.

Nonetheless, her testimony cast a shadow over the high-powered Triple Five - a company with international ties that has built some of the Las Vegas Valley's largest retail centers and is a major political player in Southern Nevada.

Triple Five issued a statement after Kenny's testimony, strongly denying the allegation.

"Having already pleaded guilty to betrayal of the public trust in so many different ways, her alleged testimony is not worthy of belief," the statement said.

Jurors, however, regarded her testimony, and Galardi's, as credible enough to convict former County Commissioners Dario Herrera and Mary Kincaid-Chauncey. Whether federal authorities believed her about Triple Five is an open question.

Assistant U.S. Attorney Daniel Schiess, the lead prosecutor, said he had asked Kenny about her dealings with Triple Five to show the jury that she was "involved in other corrupt activities," which he did not identify.

After the trial, prosecutors said the federal corruption investigation is continuing. But they will not comment on the Triple Five bribery claim or whether they are looking into Kenny's allegation.

Local ethics and political experts say the government now has an obligation to resolve the accusation one way or another.

"It's just hanging there right now," said Craig Walton, a UNLV professor emeritus and president of the Nevada Center for Public Ethics.

"It's got to be looked at," Walton said. "There are a lot of us in the valley who don't believe that bribery on retainer is the way of political life."

Sig Rogich, a longtime political consultant who has represented gaming and development interests, said investigators have no choice but to delve further into the allegation.

"It would not speak highly of the government if it only went after the elected officials and not the businesses that may have contributed to the problem," Rogich said.

Don Williams, another veteran political consultant, said state and local law enforcement authorities, including the Nevada attorney general's office, also should be looking into Kenny's claim.

"There ought to be investigations popping up from all kinds of government entities," Williams said.

Williams said Kenny's testimony did not surprise him.

"Every step of the political process here is vulnerable," said Williams, who has been part of the Southern Nevada political scene for nearly 40 years. "You can make deals up and down the line."

In a relatively short period of time, Triple Five Nevada - part of a privately owned conglomeration run by one of Canada's wealthiest families, the Ghermezians - has become a political force in Southern Nevada, contributing to many campaigns.

The family empire was built by patriarch Jacob Ghermezian, who grew up in Azerbaijan in the former Soviet Union and eventually moved to Tehran, where he operated a carpet business. An apartment complex Ghermezian owned in Tehran played host to a 1943 conclave involving then-President Franklin Roosevelt, British leader Winston Churchill and Soviet leader Joseph Stalin that helped plan the invasion of Nazi-occupied Europe in World War II.

Ghermezian moved his carpet business to Montreal in the 1950s, becoming one of North America's largest importers of Persian rugs. A decade later, Ghermezian moved again to Edmonton, Alberta, and began investing in land there. That's where the family's parent company, Triple Five Corp., is based.

After Ghermezian died in 2000, his four sons, Eskandar, Nader, Bahman and Raphael, took over the family business. A third generation of Ghermezians, including Eskandar's son David, now help run many of Triple Five's businesses in Las Vegas and elsewhere in this country.

"Behind the facade of Marx Brothers-style merriment, the close-knit, hyperactive Ghermezian brothers are demanding, high-pressure negotiators who drive a hard bargain," the Washington Post wrote in 1986.

The newspaper reported that the brothers "work from a suite of interconnecting offices and share the same telephone lines. They frequently tap into one another's calls and drop in on each other's meetings. Each of the brothers has an area of expertise. Eskandar concentrates on finance and construction. Nader is the public relations spokesman and liaison with governments. Raphael focuses on legal matters. Bahman, the youngest, specializes in real estate and operations."

The family is secretive, which is why little is known about them. The Toronto Star reported in 1988 that they lived in a private Edmonton compound surrounded by barbed wire. Other news accounts have stated that the homes are connected by tunnels.

"Their marriages were arranged," the newspaper wrote of the brothers. "Their mother went to Iran to hand-pick her sons' wives, each of whom has a different religion, which has been adopted by each husband.

"The brothers eat lunch together every day to break up their regular 12-hour work schedules, often shouting each other down to get a point across."

During rare interviews, they have declined to answer personal questions and almost never agree to be photographed. Their elusiveness has left the family open to numerous rumors, including speculation that they have been financed by Middle Eastern oil money, something they have denied.

Over the years the family has become adept at developing grandiose shopping malls. It built the world's largest, the West Edmonton Mall in Edmonton, in 1981, and later this country's largest, the Mall of America in Bloomington, Minn., in 1992.

The Ghermezians entered the booming Las Vegas real estate market in the 1990s with little fanfare and quietly built an empire of upscale retail centers around the valley.

Triple Five's developments include Grand Canyon Parkway, Silverado Ranch Place, Boca Park Marketplace, Village Square and Colonnade Square at Pebble.

In the works is the company's most ambitious project here, the enclosed Great Mall of Las Vegas at the northwest corner of U.S. 95 and the Las Vegas Beltway, which could open by 2008.

As it has carved out its niche in commercial real estate, Triple Five has seen the value of contributing to local campaigns to boost its business interests.

The company and its long list of local affiliates (it has created dozens of limited liability companies here) have given money almost exclusively to candidates in Clark County Commission races and in city council and mayoral contests in Las Vegas, North Las Vegas and Henderson.

These are the elected offices that have authority over zoning matters that have affected Triple Five's projects.

Records show that since 1998 the company and its affiliates, most of which are based at 9510 W. Sahara Ave., Suite 200, have poured at least $153,000 into Southern Nevada campaigns .

Current and former county commissioners who have received contributions include Kenny, Kincaid-Chauncey, Lance Malone, Mark James, Chip Maxfield, Myrna Williams, Rory Reid, Yvonne Atkinson Gates, Bruce Woodbury and Lynette Boggs McDonald.

Three local mayors, Oscar Goodman of Las Vegas, Michael Montandon of North Las Vegas and Jim Gibson of Henderson, have been Triple Five recipients.

Gibson recently returned $10,000 he received in December for his Democratic gubernatorial bid after his Democratic primary foe, Senate Minority Leader Dina Titus of Las Vegas, made a campaign issue out of the contribution. Titus called upon Gibson to give back the money to "avoid any appearance of impropriety."

Among the current and former Las Vegas City Council members who have received Triple Five donations are Michael McDonald, Larry Brown, Lawrence Weekly, Steven Ross, Gary Reese and Janet Moncrief. Henderson City Council members Andy Hafen, Steven Kirk and Amanda Cyphers also were Triple Five recipients.

Triple Five also has not been shy about putting public officials on its payroll.

Former Las Vegas Councilman Michael Mack served as a graphics art consultant to Triple Five while he was on the council. Throughout his council tenure, Mack was accused of ethical breaches, and Galardi told FBI agents that he had given him cash under the table, though Mack was not charged in the Galardi case.

At times the Ghermezian family's business dealings have been mired in controversy in Edmonton and Las Vegas.

In 1974, two of the brothers, Eskandar and Raphael, were accused of offering $40,000 to an Edmonton city alderman for a favorable vote on one of their projects, according to Canadian newspaper reports. A judicial inquiry confirmed that the money was offered but concluded that it was for "past services" and did not constitute a bribe.

Then, in August 1998, the government-owned Alberta Treasury Branches filed a lawsuit against the Ghermezians, alleging that the family used a secret Israeli bank account to bribe the financial institution's former top executive in return for approving a $440 million refinancing package for the West Edmonton Mall.

The Ghermezians and the former bank official flatly denied the bribery allegation, and the family filed a countersuit against Alberta Treasury Branches. The bribery allegation was never proven and the two sides reached an out-of-court settlement in December 2002.

Triple Five's biggest brouhaha here involved its Spring Valley casino proposal, which was approved by the County Commission in January 2000 despite strenuous objections from residents in the neighborhood. The project later died, however, after it was rejected by a state oversight panel.

Kenny's testimony in the corruption trial last month rekindled the controversy, shedding new light on why she ignored the pleas of her constituents and pushed hard for the casino on behalf of Triple Five.

She testified that after she voted for the proposal, Triple Five started paying her $3,000 a month through May 2003, when FBI agents broke open the corruption investigation with raids on Galardi's strip clubs.

She said the payments were made by former Triple Five Vice President Don Davidson on behalf of Eskandar Ghermezian, who claimed he owed her a "life debt" over the Spring Valley casino vote.

In the beginning, Kenny said, Davidson brought her work to do in return for the money - she edited company brochures. Eventually, however, the work stopped coming in, but not the money.

"What happened with respect to the job and money?" Schiess asked Kenny.

"Over time, he would give me jobs to do," she said. "I would do the jobs, whatever they were, and at the end of every month he would pay me. And after about three or four months, maybe a little longer, he stopped giving me work to do ..."

Schiess: "What would happen each month when the work would stop coming in connection with Mr. Davidson?"

Kenny: "He just continued to pay me."

Schiess: "How much did he pay you?"

Kenny: "Three thousand dollars."

Schiess: "In what form?"

Kenny: "Cash."

Evidence provided by Kenny led to a federal indictment in November of Davidson on charges he gave Kenny $200,000 in bribes unrelated to Triple Five. He allegedly paid the money for Kenny's help in pushing zoning changes that cleared the way for construction of a CVS Pharmacy at Desert Inn Road and Buffalo Drive.

Triple Five was not involved in that project. But the indictment does give investigators leverage if they have reason to pressure him for possible evidence against Triple Five. Davidson's son, Lawrence, a disbarred lawyer, was also named in the indictment. Both have pleaded not guilty.

The alleged Triple Five payments to Kenny were mentioned in the indictment, although the company was not identified by name.

"From in or around 2000 to in or about May 2003, defendant Donald Davidson and Kenny met each other monthly for social reasons," the indictment said. "Each month defendant Donald Davidson gave Kenny $3,000 cash from a real estate developer because of a favorable vote that Kenny had cast in a controversial matter on behalf of the developer."

Her admitted dealings with Triple Five don't surprise Spring Valley residents who battled the Triple Five casino proposal six years ago.

"A lot of us didn't understand why we had to fight so hard," said Lisa Mayo-DeRiso, one of the activists in the political battle. "People always suspected she was getting paid off, but no one really wanted to believe it."

Though Triple Five and Davidson denied paying bribes to Kenny, Mayo-DeRiso said the company owes the community an apology.

"You would like to see Triple Five come back and say, 'We're sorry. We really violated the trust of the community, and we're going to make things right,' " she said.

Andy Rankin, general counsel for Triple Five in Nevada, would not comment for this story. But sources close to the company said Triple Five is confident that Kenny's courtroom testimony did not demonstrate wrongdoing by the company.

Davidson's lawyer, Dominic Gentile, also said his client did nothing wrong.

Kenny, it turns out, wasn't the only commissioner whose actions were questioned in the Spring Valley casino debate.

Former County Commissioner Lance Malone had promised Triple Five's competitor in the area, neighborhood casino giant Station Casinos Inc., that he would not support the Triple Five project. He also told residents in the area that he wouldn't vote for the proposal.

But at the last minute, Malone switched allegiance to Triple Five and ended up becoming the swing vote that led to the County Commission's approval.

"It just smacked us in the face," Mayo-DeRiso recalled. "We were like, 'How could this happen?' "

After the vote, in which Malone admitted going back on his word, an outraged Station Casinos worked successfully to defeat him in his re-election bid in 2000.

Malone later went to work as a lobbyist for Galardi. He became the middleman allegedly spreading around cash to Kenny, Herrera, Kincaid-Chauncey and others who were asked to favor Galardi's business interests.

Malone was convicted in San Diego federal court last year of being Galardi's bagman with politicians there. He is scheduled to stand trial on similar charges in Las Vegas in August.

A couple of months before the Spring Valley casino vote, campaign records show, Malone collected $14,500 in campaign contributions from Triple Five and its affiliates.

FBI reports obtained by the Sun quote Galardi alleging more questionable conduct on the part of Malone and Triple Five.

Galardi, while striking a deal to cooperate with the government in 2003, told FBI agents that Malone told him that he received $150,000 from Triple Five and the Ghermezian brothers for supporting the Spring Valley proposal.

Malone reportedly indicated that he had "worked under the table" with the Ghermezians without the knowledge of Station Casinos and others who thought he was opposing the project.

"Malone came to Galardi and advised him of what he was doing and Galardi indicated to Malone that it was not the right thing to do," the FBI said in the reports of interviews with Galardi.

Many names were blacked out in the FBI reports, with persons and companies identified only generically. A close reading of the reports by the Sun shows that "Company #1" referred to Triple Five, and the brothers were identified together as "individual #10."

The FBI also quoted Galardi as alleging that the Ghermezians gave money to former Las Vegas Councilman Michael McDonald.

Galardi claimed that McDonald, once a paid Galardi consultant, told him that he had received $50,000 in cash from the "brothers" for his "City Council influence on business deals that would affect" Triple Five.

"After McDonald received the $50,000 cash," FBI agents said, "he came over to the construction site of Galardi's new residence and, while visiting in the construction trailer on Galardi's property, advised him of the receipt of the $50,000 from company #1."

Later Galardi told FBI agents that Malone had set up a meeting between McDonald and one of the "individual #10" brothers at a development project, where McDonald received the money.

Galardi recalled that McDonald showed him a duffle bag that he said contained the cash.

Rankin declined to comment on Galardi's claims.

But Gentile, who also represents Malone, said the allegations about his client were "absolutely not true.

"There's so much that Mike Galardi has said that is untrue and fabricated," Gentile said. "This is just one more item that falls into that category."

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