Thursday, May 15, 2003 | 11:36 a.m.
The FBI agents who raided two Las Vegas strip clubs Wed nesday were looking for documentation of payments to Las Vegas Councilman Michael McDonald, County Commissioner Mary Kincaid-Chauncey and former County Commissioners Erin Kenny and Dario Herrera, the search warrants said.
The searches involving more than 100 federal agents came after two years of federal investigation into businesses owned by Jack Galardi and his son, Michael Galardi.
Search warrants were served about 1 p.m. at two strip clubs -- Cheetahs and Jaguars -- as well as at the downtown offices of Galardi Enterprises and a Las Vegas home that sources say the family owns. Simultaneously another cadre of federal agents searched the Cheetahs in San Diego and the City Hall offices of three San Diego councilmen.
According to a copy of one of the warrants obtained by the Sun, FBI agents sought a "ledger or journals or handwritten notes of payments or gifts" to the well-known political figures, as well as to Kincaid-Chauncey's husband, Robert Chauncey, Herrera's wife, Emily Herrera, and Kenny's husband, John Kenny.
Records of payments or gifts to unidentified building inspectors also were sought.
The warrants, signed by U.S. Magistrate Peggy Leen, also gave FBI agents permission to take any records of 1997 campaign contributions made by Cheetahs, Jaguars, Cheetahs in San Diego and Galardi Enterprises.
Another central figure in the FBI investigation is former County Commissioner Lance Malone, a former Metro Police officer who went to work for the Galardis as a lobbyist after he was voted off the commission in 2000, sources close to the investigation said.
Malone was not named in the search warrants and could not be reached for comment. Attorneys for the Galardis said they have been unable to locate the former commissioner.
McDonald said he was interviewed Wednesday by FBI agents. He said they asked him about his ties to Michael Galardi.
"I went to high school with him," McDonald said. "I've never voted on any items involving him. I've always abstained."
McDonald said he has retained Richard Wright, a well-known criminal defense attorney who specializes in political corruption cases.
McDonald was subpoenaed this week to testify before a federal grand jury in connection with the Galardi case, a source close to the investigation said. McDonald declined to comment on whether he had already provided testimony or would soon testify.
Kincaid-Chauncey flew back from Carson City Wednesday night. She said this morning that she has not been served with a search warrant, and she was advised by county attorneys not to comment on the investigation.
"I haven't taken ... I don't know if I should comment on it," said Kincaid-Chauncey, who became chairwoman of the commission in January. "I have not taken any money personally. They did contribute to a trust fund that I was involved in.
"I've not taken any bribes from Mr. Galardi," she added. "My vote is not for sale."
Herrera said this morning that his vote has never been for sale either. He declined to discuss the implications of the search warrant in detail.
"My legal counsel has advised me not to comment on rumor, innuendo or media reports but rather (to wait to comment) in the appropriate legal forum," Herrera said.
Kenny could not be reached for comment Wednesday or this morning.
County spokesman Erik Pappa said Wednesday evening that the county was "fully cooperating" with the federal investigation, but said any information on the probe would have to come from the FBI.
"We don't want to do any thing to affect their investigation," Pappa said.
The warrants indicated that agents also were looking for evidence of secret financial interests in the Las Vegas and San Diego strip clubs owned by the Galardis. They sought records dating back to 1997, "which would establish the identity of those persons who may have a direct or hidden ownership of the clubs," the warrants said.
The search warrants allowed agents to seize all business records at the topless clubs dating back to 1997 -- including savings, checking and loan records, as well as employment and payroll records.
Agents also sought records of payments made to construction contractors.
The affidavits related to the searches are sealed. FBI officials said the investigation is ongoing and involves corruption. No criminal charges had been filed in connection with the raids as of this morning.
Jack Galardi and his son Michael Galardi have had several business items before the Clark County Commission and the Las Vegas City Council in the last several years, including business licensing matters. Their businesses have also had a stake in regulations imposed by the county and the city on strip clubs.
FBI agents on Wednesday interviewed Ardel Jorgenson, the county's director of business licensing, about a controversial May 1999 commission vote involving Jack Galardi. The agents also asked Jorgenson about a luncheon invitation she had received from Malone around the time of the vote. When Jorgenson showed up at the appointment, she was surprised to see one of the Galardis waiting for her.
Jorgensen met Wednesday with Clark County Counsel Mary Miller and Deputy District Attorney Kathleen Janssen, one of a series of meetings that were convened on the probe in the last 24 hours. County Manager Thom Reilly returned from Carson City and was meeting on the issue with ranking county employees this morning, county sources said.
In 1999 Jorgensen had asked for funding to send investigators to Atlanta to investigate Galardi, who was seeking approval for Jaguars. But by a 4-3 margin, the commission turned down her request. Malone, Kenny and Herrera, along with Commissioner Myrna Williams, voted against the funding.
Commissioners Bruce Wood bury, Kincaid-Chauncey and Yvonne Atkinson-Gates voted to support the request.
Williams said she has not been served with any warrants.
"I don't know anything about it," Williams said.
Williams said during the 1999 discussion about the Galardi probe that the county often spends money to investigate unsubstantiated innuendo, with little to show from those efforts.
"Lots of money is spent to investigate rumors," she repeated Wednesday.
Robert Loosle, Assistant Special Agent in Charge of the Las Vegas office of the FBI, said that the investigation has no connection to the Feb. 21 raid of the Crazy Horse Too strip club owned by Rick Rizzolo.
"We are not targeting these types of sexually orientated businesses, it just happens that these two cases involved search warrants at these establishments," Loosle said.
Rizzolo's club at 2476 Industrial Road was raided by the FBI, Metro Police, and the IRS on Feb. 20. The focus of the raid was to locate evidence of connections between the club and organized crime interests in New York and Illinois, and to seize financial documents dating back to 1995, according to a federal search warrant.
No charges have been filed in connection with the Crazy Horse Too raid.
Employees of the two clubs raided Wednesday said they hope the same holds true for them.
Nada Madanat, a 22-year-old dancer at Cheetahs, 2112 Western Ave., was getting ready for her shift Wednesday afternoon when armed men and women burst into the dressing room.
"I thought it was a joke at first, but then I saw the guns and got scared," Madanat said. "They told us to put our hands up and then to put them behind our head."
FBI agents from neighboring jurisdictions were called in to assist in the raids, which used the majority of Las Vegas' FBI personnel, FBI spokesman Special Agent Daron Borst said.
Agents loaded boxes of confiscated materials into trucks at each of the search warrant locations.
Peter S. Christiansen, an attorney for the clubs, said he had no comment about the raid.
Jaguars General Manager Rich Buonantony said he was home sleeping when he was called by a club employee and told of the raid.
"They want to check on a few things and we're letting them," Buonantony said of the FBI. "As of now everything's fine. They have access to everything."
Buonantony said that FBI agents were not telling club officials what they were doing other than serving a search warrant.
"Our environment is always under scrutiny," Buonantony said. "When you do things the right way you have nothing to worry about."
Buonantony has managed Jaguars since it opened on June 26, and before that he served in the same position at Cheetahs, which opened in 1991. Also raided was Galardi Enterprises located at 713 E. Ogden Ave., and a home. The FBI refused to disclose the location, owners or residents of that home.
The FBI separated the employees at the clubs from the handful of customers inside, who were allowed to leave. Employees had their bags and lockers searched, and were then allowed to leave.
Senior Metro Police officials were told this week that the in vestigation would be heating up and that the FBI would be the lead agency on the case.
The FBI searched the clubs, office and residence for several hours Wednesday.
"They finished up at Jaguars about 9:30 p.m., and they had already finished at Cheetahs by then," Borst said.
Both of the clubs reopened for business.
For the bartenders, cocktail waitresses, dancers and receptionsts at Jaguars on Procyon Road, Wednesday night is usually when business starts to pick up and build toward the weekend. That wasn't true this week.
"It is so slow, it's really slow tonight," a dancer named Melanie said late Wednesday. She said she has been working at Jaguars since it opened in August.
Two thirds of the two-story club was empty.
A lone dancer twirled under mood lighting, the music pulsing through the dimly lit lounge.
Most of the people working at the club said they knew little about what had happened Wednesday afternoon.
Business was so slow that valet parking attendants had time to sweep leaves, cigarette butts and dust off the circular driveway under the watchful yellow eyes of a 10-foot tall black faux marble jaguar statue at the entrance.
Sun reporters
Dan Kulin, Mary Manning and Steve Kanigher contributed to this story.
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