Friday, Jan. 23, 2004 | 11:06 a.m.
Breaking months of public silence, topless nightclub mogul Jack Galardi told the Sun this week that he was "shocked" and "devastated" when he learned that his estranged son, Michael, was targeted in an FBI political corruption probe.
"I couldn't understand it because it was totally unnecessary what he did," Galardi said in a 90-minute interview in the presence of his lawyer, Dominic Gentile. "I had no idea he was that active."
On May 14 FBI agents looking for evidence of payoffs to elected officials raided Cheetahs strip club, co-owned by the Galardis, and Jaguars, owned at the time by Michael, in Las Vegas, as well as Michael's club Cheetahs in San Diego.
The younger Galardi, who learned the topless nightclub business by working his way up the ladder of his father's clubs, later pleaded guilty to federal corruption charges in San Diego and Las Vegas and agreed to testify against elected officials charged with taking money under the table from him in both cities.
The investigation abruptly ended the 42-year-old Michael Galardi's career as a big-spending, politically connected strip club operator and forced Jack Galardi, who was not charged in the probe, to, as he put it, "clean up the mess" his son created.
It also pushed the media-shy father into the limelight.
The 72-year-old Galardi is a Korean War veteran who once served prison time over the theft of money orders from a post office, promoted rock groups in Vietnam during the war and ran an after-hours nightclub in Los Angeles with a man who was murdered years later.
Over the last three decades he built up a small empire of topless clubs across the country. He says he had two dozen of them at last count, and he enjoys the perks that have come with his success, including a posh home in Las Vegas, a 400-acre ranch outside Atlanta, two corporate airplanes and a helicopter.
Galardi didn't dress the part of a nightclub mogul for the interview, however. He wore jeans, a powder blue polo shirt and a black leather bomber jacket with his name stitched on the front and the logo of one of his companies, Galardi South Enterprises, on the back. In all of his years of doing business on the nightclub scene, he said, he had never given an in-depth interview to a reporter and didn't plan on doing it again.
But he said he agreed to talk this week with the hope of improving his reputation, which has been tarnished amid the mass of publicity generated from the corruption probe.
"It hurt me everywhere I'm in business today," he said, adding that it caused him to lose several big loans and prompted Las Vegas and Clark County officials to "slap me around pretty good."
Galardi said he also felt like the media dragged him through the mud by unfairly linking him to his son's misconduct.
Initial news reports about the May 14 raid brought up Jack Galardi's name because he was listed as having a 60 percent share of the company that owns Cheetahs in Las Vegas. Michael was listed as having a 40 percent share of the company, La Fuente Inc. Additionally, the search warrants executed in the raid said FBI agents were looking for evidence of hidden ownership by Galardi in Jaguars, which officially was owned by Michael.
But Jack Galardi insisted that he had no interest in Jaguars at the time of the raid and that FBI agents have not interviewed him in connection with the investigation. Galardi's lawyers have previously said they were told Galardi was not a target of the probe.
Galardi said differences over the development of Jaguars, a $15 million megaclub that opened in 2002, led to a split between the father and son. Galardi said he "washed his hands" of Jaguars and let his son take over the club.
Until the May 14 raid, Galardi said, he hadn't spoken to his son in about three years. On that day Michael telephoned him seeking some fatherly comfort, he said.
Both men have talked with each other since then, Jack Galardi said, but their relationship remains strained.
After his son pleaded guilty in the investigation, Galardi bought Michael's 40 percent share of Cheetahs, and he bought Jaguars and Leopard Lounge, another topless club Michael owned. He also banned his son from entering the three clubs and filed a lawsuit alleging Michael unlawfully diverted more than $530,000 from Cheetahs to Jaguars.
But city and county officials have made Jack Galardi pay for not keeping a closer eye on his exuberant son and former business partner.
Earlier this month, the Las Vegas City Council hit La Fuente Inc., which now is solely owned by Galardi, with a $1.1 million fine because of Michael's courtroom admissions of criminal conduct in the corruption investigation. Galardi has not yet paid the fine, which is related to the liquor license at Cheetahs, a club that some have estimated earns $8 million a year.
This week the Clark County Commission gave Galardi a one-month limited liquor license at Leopard Lounge because Metro Police still are conducting his background investigation, which could take up to nine months. Two former police officers who are leasing Jaguars from Galardi received a four-month temporary license for the same reason.
City and county officials, Galardi said, "did what they had to do" as elected officials. But he thinks the city fine was excessive and plans to challenge it in court.
Galardi said his troubles are the result of letting his son handle the daily operations of Cheetahs the past several years.
"I trusted him to run Cheetahs," he said. "I wasn't paying attention. The bills were being paid. I was drawing a nice salary. Everything was being taken care of to my knowledge. I had no concerns."
Galardi said that he wasn't a hands-on businessman. He said he likes to design and build his bars and nightclubs, but he had preferred to let others run them for him.
His laid-back approach also has landed him in trouble in Tampa, where six people at four of his topless clubs were arrested last month in a police investigation that led to charges that the clubs were fronting for prostitution.
"What happened in Tampa blew me out of the water," Galardi said, adding that he has fired the top managers at all four clubs.
Galardi said he placed too much faith in his managers, one of whom had been with him for 14 years.
"There isn't one thing that I have done in my way of life or my way of operation other than trusting people and thinking they're doing a good job," he said. "Maybe it's my fault for not following up. The buck has to stop here. You do your best to clean it up, kick 'em out, which I'm doing."
Galardi said he has learned his lesson and now plans to become more involved in running Cheetahs and his clubs elsewhere in the country. He also has clubs in Atlanta, Miami, Daytona Beach and several cities in South Carolina and North Carolina.
"I'm going to be doing a lot more flying and going to more places," he said.
The Tampa investigation, however, has attracted the interest of Metro Police investigating Galardi's background for his county licenses. Detectives are expected to spend time in Tampa and in other cities where Galardi owns clubs during their investigation.
The background probe also is likely to revive interest in Galardi's 1971 conviction over the theft of money orders from a post office in Long Beach, where he had been running a number of bars.
Galardi said he was charged in the case after he had returned from an 18-month stint in Vietnam promoting rock bands and after he had taken up residence in Las Vegas.
A friend of one of his bartenders, he said, stopped by his office in Long Beach one day, dropped a bunch of the money orders on his desk and asked if Galardi could ship them to Vietnam, where they would earn a high price on the black market.
"I said yes, but then I got busted for it," he explained.
Rather then take a deal and plead guilty to a felony, Galardi said, he decided to go to trial in federal court in Long Beach. But the jury, after deliberating for three days, convicted him. Later he was sentenced to five years in prison.
Galardi said he spent six months behind bars at the Terminal Island federal prison in Long Beach before being admitted into a prison educational program and ultimately a work-release program.
When he got out of prison, Galardi returned to Las Vegas and got into the bar business here. Eventually he invested in the topless nightclub scene, converting one of his bars, the Shadow Box on East Charleston Boulevard and 15th Street into a strip joint.
In the early '80s, Galardi said, he took out a $50,000 loan and bought the controversial Crazy Horse Saloon at Flamingo and Paradise roads. The sale took place after the May 1981 slaying of Tony Albanese, a former Long Beach topless nightclub owner who was suspected by police of having hidden interests in the Crazy Horse. Albanese's severed head was found in the desert near Needles, Calif.
Galardi said he knew Albanese very well and years earlier was partners with him in a Los Angeles after-hours nightclub called Moulin Rouge. The partnership, however, ended shortly after the club opened, Galardi said.
"Let me tell you something about the bar business," he said. "You'll find very few partnerships that last."
Authorities speculated that Albanese's slaying did not involve the Crazy Horse, but rather an unrelated power struggle within the mob-dominated massage parlor business in Long Beach.
Still, Galardi said, his reputation with lawmen suffered after he bought the Crazy Horse.
He said a friend in Metro intelligence advised him not to buy the club, which had long been rumored to have ties to the mob, but "I wanted to do it anyway."
Galardi said the mob never bothered him while he owned the club, which no longer is in business.
By the late 1980s Galardi opened Cheetahs, and it quickly became a success allowing him to expand his topless business to other cities. At the same time, Galardi widened his business interests in Las Vegas, opening a popular late-night club called Mr. G's. And he stepped up his political influence as a major donor for the Republican Party. Though he was not a major contributor to campaigns, he was a regular at GOP party functions, even hosting some himself.
Eventually, Michael Galardi, who learned the ropes of management as a shift manager at the Crazy Horse, was given a 40 percent share of Cheetahs and took over its daily operations.
Looking back, Jack Galardi said, he should not have refused to give police $24,000 in 1999 to do a background check on him in connection with his son's plans to open Jaguars. Police wanted to investigate whether he had any interests in the club. Prospective licensees are required to pay for background investigations, but Galardi wasn't applying for a license and maintained he wasn't obligated to give police any money. The County Commission also refused a police request for $11,000 to probe Galardi.
"The biggest mistake I made was not giving the police the money," he said. "It made it look like I had some juice there."
As for the ongoing corruption case, Galardi said he hasn't talked much about the specifics of the FBI probe with Michael and doesn't know the full extent of his "activities." And he offered no opinion on his son's decision to cooperate with the government.
"I don't want to know what, if anything, he did," Galardi said.
But he added: "I feel very badly about what happened. It cast a shadow over politicians in this town."
Galardi said there will come a time when he will reconcile with his son, probably after the corruption case blows over.
As for himself, Galardi said he hopes to hold onto Cheetahs but sell both Jaguars and Leopard Lounge in the near future.
He said he's confident the police background investigation will not turn up any dirt on him and that he'll be in the topless nightclub business a long time.
Galardi, however, said the thought of getting out of the business has crossed his mind.
"Sometimes I say to myself, 'Jack, you don't need this," he explained. "You could sell all of this stuff ... but then I'd go crazy and end up dying. This is my life. This is what I like to do. This is what makes me tick."