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Government to appeal acquittal of Zucchet
Ex-councilman's lawyer calls move a 'mistake'
By Kelly Thornton, Union –Tribune STAFF WRITER, Nov. 27, 2006
The government will appeal a federal judge's controversial decision to overturn a jury's guilty verdicts against former San Diego City Councilman Michael Zucchet.
A judge overturned guilty verdicts against Michael Zucchet.San Diego U.S. Attorney Carol Lam lobbied for permission to appeal.San Diego U.S. Attorney Carol Lam, who lobbied heavily for permission to appeal, waited an unusually long time for approval from the Solicitor General's Office, an arm of the Justice Department that makes all decisions about appeals and represents the United States before the U.S. Supreme Court.
The approval, which took about a year, means Justice Department lawyers have concluded that the jury's verdict was correct, that there was sufficient evidence to convict Zucchet of trading political favors for money, and that it's likely a panel of the 9th U.S. Circuit Court of Appeals will agree.
A lawyer connected to the case said those involved were informed of the development by overnight letter late last week, but the Thanksgiving holiday might have delayed some notifications.
Zucchet and his lawyer, Jerry Coughlan, said yesterday that they had not yet been notified of the government's decision. Zucchet declined to comment, but Coughlan called the move “a dumb mistake.”
“They'll lose again because (U.S. District Judge Jeffrey T.) Miller was absolutely right. If the solicitor general made the decision on the law and the facts, it wasn't even a close call, but I also know this U.S. attorney's office put a lot of pressure on the solicitor general,” Coughlan said. Zucchet was indicted in 2003 along with former Councilmen Ralph Inzunza, Charles Lewis and strip club associates on extortion and honest-services wire-fraud charges. They were accused of scheming to deprive citizens of honest services by surreptitiously trading efforts to repeal a law banning touching between strippers and patrons for campaign contributions.
Zucchet, Inzunza and Las Vegas lobbyist Lance Malone were convicted by a jury July 18, 2005. Lewis died before trial. Malone's boss, strip club owner Michael Galardi, made a deal with the government and testified against the others. Galardi is scheduled to be sentenced in January.
In a stunning move a few months later, in November, Miller overturned a jury's guilty verdicts against Zucchet, acquitting him of seven corruption counts and granting a new trial on the remaining two counts.During the same hearing, Miller also sentenced Inzunza to 21 months in prison, and Malone to 36 months in prison. Inzunza is free on bond pending appeal; Malone has agreed to drop his appeal as a condition of a subsequent plea bargain in a parallel corruption case in Las Vegas.
The government's opening briefs are due January 17. A response from the defense is due April 17, and the government has a month to reply. After that, it could be several months before arguments take place before a three-judge panel, and then up to a year for a decision.
The circuit panel could uphold or reverse the district court judge's decision to overturn the guilty verdicts. Or, it could split the decision by upholding some counts and reversing others.In case of reversal, the jury's original verdict would stand. If the acquittal is upheld, the government then would have to decide whether tore-try Zucchet on the remaining two counts.
In making its decision on the San Diego case, the Solicitor General's Office assessed the likelihood that Miller's decision would be reversed, and evaluated the consequences should the government lose.It's likely the government's appeal will focus in part on the controversial honest-services fraud statute and an instruction Miller gave to the jury that caused debate behind the scenes between prosecutors and the defense.
The defense argued that the statute is vague and jurors could mistake typical conduct of politicians – such as receiving contributions and later voting on matters affecting the contributors – for criminal conduct.
To protect the defendants from being unfairly convicted, the defense said the jury should be instructed that they can only convict on the honest-services wire fraud counts if they find evidence of a quid-pro-quo agreement between the defendant and the strip club employees.
The government argued that unlike the crime of extortion, which requires a jury to find a quid-pro-quo agreement, honest-services fraud does not require such proof.
The judge ruled in favor of the defense.Miller reversed the conviction in part because he found no evidence of a quid-pro-quo agreement, and the prosecution has indicated that Miller's instruction to the jury will be an element of its appeal. The government is likely to argue that Miller erred when issuing this instruction.
To prove wire fraud under the statute, the government must show that the defendants planned to deprive citizens of honest services, it must show intent, and it must show that defendants used or caused someone else to use the mail or a wire communication – such as a telephone – to carry out the plan, according to a book of standard jury instructions by the 9th Circuit Court of Appeals in San Francisco.Coughlan has said he would not be surprised if the case went to the U.S. Supreme Court based on the controversy over the honest-services statute.
While pursuing that angle, the government is also likely to appeal on grounds that the judge was simply wrong, that there was plenty of evidence of a quid-pro-quo agreement.
The jury convicted Zucchet of three extortion counts, one count of conspiracy, and five wire fraud counts. Miller, the district court judge,acquitted Zucchet of the three extortion counts and four of the wire-fraud counts. The judge granted a new trial on the remaining charges of wire fraud conspiracy and wire fraud.Miller sided with Zucchet's lawyers, who argued that he could not be convicted because there was insufficient evidence of a quid-pro-quo agreement between Zucchet and the strip club owner or his representatives. Miller ruled there was no clear relationship between campaign contributions Zucchet received in 2001 and 2002 from Malone and the action he took on behalf of Malone in 2003.
At Malone's behest, Zucchet referred adult entertainment matters to the City Attorney's Office for review. The referral happened at a public meeting of the Public Safety and Neighborhood Services committee.
The councilmen and Malone arranged for a man posing as a concerned citizen to appear before the committee, asking that the politicians increase the required distances separating strip clubs from schools, churches and other clubs. The man, who gave a bogus address, was an employee of one of Galardi's Las Vegas strip clubs.
The distance requirement was intended to be a distraction for other council members and the media, the government maintained. The real plan was to sneak the no-touching matter onto the agenda.
Zucchet resigned his council seat after his conviction. Soon after his acquittal, he took a job with the Utility Consumers' Action Network, and he recently became vice president for development for downtown developer and former Port Commissioner Peter Janopaul.
Meanwhile, Inzunza's appeal is on the same schedule as the Zucchet matter.
Judge overturns Zucchet conviction, cites insufficient evidence
Inzunza receives 21-month sentence
By DOUG SHERWIN, The Daily Transcript, November 10, 2005
Former San Diego City Councilman Michael Zucchet was acquitted on all but two counts of federal corruption charges Thursday and was granted a new trial on the two remaining counts.
An emotional Michael Zucchet thanked his family, lawyer and Judge Miller in a press conference.
The motions by former Councilman Ralph Inzunza and lobbyist Lance Malone, however, were denied, with Malone receiving a jail sentence of 36 months. Inzunza was sentenced to 21 months in jail, considerably less time than the prosecution was seeking.
The decision by U.S. District Judge Jeffery T. Miller brought an incredible mix of emotions for Zucchet, who was convicted in July along with Inzunza and Malone, on multiple charges of corruption in connection with a scheme to repeal the city's no-touch ordinance.
"I would never know what this is like had I not been through it and trying to put it into words is so difficult," a teary Zucchet told reporters outside the courtroom.
He described his emotions as ranging "from gratitude to shock to 'My God, finally,' and everything in between."
July's verdict came after a lengthy government investigation and a three-month trial, which consisted of countless hours of taped conversations. A jury found Zucchet and Inzunza guilty of accepting illegal campaign contributions from strip club officials in exchange for trying to repeal the city's no-touch ordinance.
In throwing out Zucchet's convictions, Judge Miller stated there was insufficient evidence that a quid pro quo existed between Zucchet and the other conspirators. He noted that Zucchet remained an outsider for most of the time that the plan was being carried out.
"He (Judge Miller) came to the right result," said Zucchet's attorney Jerry Coughlan.
"I always felt that this case shouldn't have been brought.
"(Zucchet's) lack of understanding of this so-called scheme was clear on those tapes. Mike's constant saying to Malone -- the few times he talked to him -- was almost always negative."
While overjoyed, the trial has taken its toll on Zucchet. He hasn't considered running for public office again.
"As happy as I am right now, I'll never get my name back," he said. "I'll never get my job back. I'm financially ruined. My physical and emotional health, and the health of my family, has been devastated."
Coughlan said Zucchet has received at least one job offer, although neither would elaborate.
The former deputy mayor was surrounded by family and friends, who were thankful for the judge's decision.
"It's not about politics at all for any of us today; it's personal," said political consultant and close friend Jennifer Tierney, who ran Zucchet's campaign for council. "We love Mike and we're just so happy to see Mike and (wife) Teresa get to this point and be able to turn their lives around and live the life that they deserve."
Zucchet, embraced by Inzunza in the courtroom following the acquittal announcement, continued to defend his friend.
"I don't believe Ralph deserves what's happening to him," Zucchet said. "I think Ralph deserves my outcome.
"The sentencing exercise I just witnessed with Lance Malone was incredibly sobering."
Zucchet's attorneys praised Judge Miller.
"My reaction is one of incredible relief," Coughlan said. "After two years, I can't tell you how much I want to express my appreciation for the care and intelligence and the legal effort that Judge Miller went to."
Men Face Up To 3-4 Years In Prison
NBC San Diego News,July 18, 2005, UPDATED: 6:10 pm PDT, SAN DIEGO --
On the fourth day of deliberations, a federal jury found two San Diego city councilmen guilty of corruption charges Monday.The jury began deliberating charges against the defendants Wednesday after a three-month trial.
Prosecutors accused interim Mayor Michael Zucchet and Councilman Ralph Inzunza of taking money from Las Vegas club owner Michael Galardi in an illegal scheme to repeal San Diego's ban on touching dancers at strip clubs.
Lobbyist Lance Malone, a former Clark County, Nev., commissioner, was accused of being a bagman for strip-club owner Michael Galardi. David Cowan, an aide to the late Councilman Charles Lewis, was charged with lying to investigators.
Zucchet and Inzunza, both 35, were accused of taking $34,500 in cash bribes and campaign contributions from Galardi in a failed plot to repeal the city's "no-touch" ordinance. Malone allegedly delivered cash from Galardi to Inzunza and Zucchet.
Zucchet and Inzunza each faced 36 counts of wire fraud, extortion and conspiracy. Zucchet was found guilty of five counts of wire fraud, and Inzunza was found guilty of nine counts of wire fraud. They were also both found guilty of three counts of extortion and once count of conspiracy.
Malone was found guilty of 37 counts of wire fraud and conspiracy. Cowan was found not guilty.
Zucchet took over this weekend as interim mayor, a post he will almost certainly have to relinquish now that he has been convicted of felony charges. San Diego Mayor Dick Murphy stepped down Friday amid a widening federal investigation into the handling of the city's deficit-riddled pension fund. It is unclear who will succeed Zucchet.
Each man could face three to four years in prison.Inzunza, Zucchet and Malone are all due back in court for sentencing on Nov. 9.
CITY HALL TRIAL: AFTERMATH. Inzunza quietly resigns from post, Voting may be consolidated with statewide balloting
By Ronald W. Powell, Union-Trine, July 22, 2005
Important dates
Aug. 1: The San Diego City Council will decide whether to call a special election for Nov. 8 to replace former Councilmen Michael Zucchet and Ralph Inzunza.
Aug. 2: If the election is consolidated with a Nov. 8 statewide special election, the nomination period for candidates would open.
Aug. 12: Nomination papers for the
Nov. 8 council election would have to be turned in by today.
Source: City Clerk's Office
Forgoing a news conference, San Diego Councilman Ralph Inzunza quietly submitted his letter of resignation to the City Clerk's Office by having a city employee deliver it shortly after the start of business yesterday.
The letter, addressed to Mayor Pro Tem Toni Atkins and stamped by the clerk's office at 8:09 a.m., was brief:
Ralph Inzunza
"Effective July 25, 2005, I resign as council member for the Eighth District. I respectfully request that my resignation is made official as soon as possible in order that the business of the city may continue. I want to thank the residents of District 8 for all of their support. It was a sincere pleasure to serve them."
Inzunza, a councilman since February 2001, and Councilman Michael Zucchet were convicted Monday by a federal jury on conspiracy, extortion and fraud charges.
The violations were tied to their acceptance of campaign contributions and cash from a Las Vegas strip-club owner who wanted them to help abolish the city's no-touch laws involving strippers and their customers.
When sentenced Nov. 9, the councilmen, both 35, could face three to four years in prison, legal experts said.
Zucchet, elected in November 2002, had announced his resignation Tuesday at a tearful news conference. He made it official shortly before 3 p.m. yesterday.
The resignation was written on city letterhead from "Deputy Mayor Michael Zucchet."
It said: "I, Michael Zucchet, hereby resign as the council member for Council District 2 effective Monday, July 25, 2005."
Atkins said the agenda for Monday's City Council meeting is too packed to consider calling for a special election Nov. 8 to replace Inzunza and Zucchet, and Tuesday the council won't meet because of the special election to replace Mayor Dick Murphy, whose resignation took effect last Friday.
Instead, Atkins said, the council will vote Aug. 1 on whether to consolidate the election to replace the councilmen with a statewide special election the governor has called for Nov. 8.
Atkins has been supervising the management of the two council districts' offices and said the former councilmen's staffs are saddened but dedicated to doing their jobs.
"They're going through a gamut of emotions – from hurt to anger to sadness," she said. "You expect that because the people who came to these jobs did so because they believed in the vision that their bosses espoused. The staff members in those offices are doing their jobs in memory of their bosses and for the city."
˜ Katie Keach, Zucchet's director of communications, said the office's nine staff members have received many supportive calls from residents expressing thanks for Zucchet's work.
Asked to describe the mood in the office, Keach said, "I'd say we miss Mike."
Ana Molina, Inzunza's chief of staff, said the six-member staff is proud of the councilman's accomplishments: a new library and a skate park in Logan Heights, a fire station in San Ysidro, and improved streetlights in Sherman Heights and Logan Heights.
"When something like this happens, you're disheartened at first," Molina said. "But we're still employed and we want to get on with the business of the city."
If the consolidated council election is approved, the clerk's office would open a nomination period for candidates Aug. 2, with an Aug. 12 deadline for filing nomination papers.
The city would save about $500,000 by holding the council election with the statewide vote in November, according to the Registrar of Voters Office.
If no one wins a majority in Tuesday's special mayoral election, the top two finishers would have a runoff, also Nov. 8.
The political turmoil in San Diego, the nation's seventh-largest city, has become fodder for late-night comedian Jay Leno.
Alluding to the departures of Murphy and Deputy Mayor Zucchet, Murphy's temporary replacement, Leno said: "There's more security in being president of Iraq than there is being mayor of San Diego."
Inzunza and Zucchet have legal defense funds that can remain active until six months after their sentencing, said Stacey Fulhorst, executive director of the city's Ethics Commission.
Individual contributions are limited to $250 a year for each legal proceeding a city official is involved in.
No city money has been spent on the councilmen's criminal defense, City Attorney Michael Aguirre said.
From January through March 31, the latest reporting period, Inzunza had amassed $19,025 in his legal defense fund, while paying out $15,403. The largest expense – $13,000 – was a payment to his attorney, Michael Pancer, who represented him in the federal corruption case.
Contributors giving Inzunza $250 included Joe Craver, chairman of the San Diego County Regional Airport Authority; developer Sam Marasco; Robert Ito, chief executive officer of Occupational Training Services Inc.; and Jose and Alfredo Hueso, owners of USA taxicab service.
During the same period, Zucchet reported contributions of $62,585, including loans of $33,000. Contributors giving him $250 included hotel owner Richard Bartell; restaurant owner Joseph Busalacchi; investor Murray Galinson; former Murphy chief of staff John Kern; businessman Sol Price; and auto dealer Richard McCune.
Zucchet reported outstanding debts of $279,262, with $243,082 of that owed to Jerry Coughlan, his attorney.
Before January, when a law permitting legal defense funds went into effect, council members were allowed to raise money for legal expenses connected with their council service through campaign contributions.
From 2003 until March 31, campaign disclosure statements showed Zucchet had paid Coughlan $84,500 and raised $272,642 in cash and loans.
From 2003 through Dec. 31, campaign disclosure statements showed Inzunza had paid Pancer $120,000 and had raised $134,564 in cash.
Aguirre said he will work with Inzunza and Zucchet to arrange for them to clear out their offices. Because of their convictions, Aguirre said, they cannot enter their old offices without an escort.
Some papers of council members must be retained as part of the city's historical record, Assistant City Clerk Joyce Lane said. Files involving administrative policy, council district issues, news releases and speeches must be kept on permanent file by the City Clerk's Office.
Murphy, for example, has dropped off 150 boxes at the City Clerk's Office. Lane said he has more boxes to come.
The letter, addressed to Mayor Pro Tem Toni Atkins and stamped by the clerk's office at 8:09 a.m., was brief:
Ralph Inzunza
Important dates
Aug. 1: The San Diego City Council will decide whether to call a special election for Nov. 8 to replace former Councilmen Michael Zucchet and Ralph Inzunza.
Aug. 2: If the election is consolidated with a Nov. 8 statewide special election, the nomination period for candidates would open.
Aug. 12: Nomination papers for the
Nov. 8 council election would have to be turned in by today.
Source: City Clerk's Office
"Effective July 25, 2005, I resign as council member for the Eighth District. I respectfully request that my resignation is made official as soon as possible in order that the business of the city may continue. I want to thank the residents of District 8 for all of their support. It was a sincere pleasure to serve them."
Inzunza, a councilman since February 2001, and Councilman Michael Zucchet were convicted Monday by a federal jury on conspiracy, extortion and fraud charges.
The violations were tied to their acceptance of campaign contributions and cash from a Las Vegas strip-club owner who wanted them to help abolish the city's no-touch laws involving strippers and their customers.
When sentenced Nov. 9, the councilmen, both 35, could face three to four years in prison, legal experts said.
Zucchet, elected in November 2002, had announced his resignation Tuesday at a tearful news conference. He made it official shortly before 3 p.m. yesterday.
The resignation was written on city letterhead from "Deputy Mayor Michael Zucchet."
It said: "I, Michael Zucchet, hereby resign as the council member for Council District 2 effective Monday, July 25, 2005."
Atkins said the agenda for Monday's City Council meeting is too packed to consider calling for a special election Nov. 8 to replace Inzunza and Zucchet, and Tuesday the council won't meet because of the special election to replace Mayor Dick Murphy, whose resignation took effect last Friday.
Instead, Atkins said, the council will vote Aug. 1 on whether to consolidate the election to replace the councilmen with a statewide special election the governor has called for Nov. 8.
Atkins has been supervising the management of the two council districts' offices and said the former councilmen's staffs are saddened but dedicated to doing their jobs.
"They're going through a gamut of emotions – from hurt to anger to sadness," she said. "You expect that because the people who came to these jobs did so because they believed in the vision that their bosses espoused. The staff members in those offices are doing their jobs in memory of their bosses and for the city."
˜ Katie Keach, Zucchet's director of communications, said the office's nine staff members have received many supportive calls from residents expressing thanks for Zucchet's work.
Asked to describe the mood in the office, Keach said, "I'd say we miss Mike."
Ana Molina, Inzunza's chief of staff, said the six-member staff is proud of the councilman's accomplishments: a new library and a skate park in Logan Heights, a fire station in San Ysidro, and improved streetlights in Sherman Heights and Logan Heights.
"When something like this happens, you're disheartened at first," Molina said. "But we're still employed and we want to get on with the business of the city."
If the consolidated council election is approved, the clerk's office would open a nomination period for candidates Aug. 2, with an Aug. 12 deadline for filing nomination papers.
The city would save about $500,000 by holding the council election with the statewide vote in November, according to the Registrar of Voters Office.
If no one wins a majority in Tuesday's special mayoral election, the top two finishers would have a runoff, also Nov. 8.
The political turmoil in San Diego, the nation's seventh-largest city, has become fodder for late-night comedian Jay Leno.
Alluding to the departures of Murphy and Deputy Mayor Zucchet, Murphy's temporary replacement, Leno said: "There's more security in being president of Iraq than there is being mayor of San Diego."
Inzunza and Zucchet have legal defense funds that can remain active until six months after their sentencing, said Stacey Fulhorst, executive director of the city's Ethics Commission.
Individual contributions are limited to $250 a year for each legal proceeding a city official is involved in.
No city money has been spent on the councilmen's criminal defense, City Attorney Michael Aguirre said.
From January through March 31, the latest reporting period, Inzunza had amassed $19,025 in his legal defense fund, while paying out $15,403. The largest expense – $13,000 – was a payment to his attorney, Michael Pancer, who represented him in the federal corruption case.
Contributors giving Inzunza $250 included Joe Craver, chairman of the San Diego County Regional Airport Authority; developer Sam Marasco; Robert Ito, chief executive officer of Occupational Training Services Inc.; and Jose and Alfredo Hueso, owners of USA taxicab service.
During the same period, Zucchet reported contributions of $62,585, including loans of $33,000. Contributors giving him $250 included hotel owner Richard Bartell; restaurant owner Joseph Busalacchi; investor Murray Galinson; former Murphy chief of staff John Kern; businessman Sol Price; and auto dealer Richard McCune.
Zucchet reported outstanding debts of $279,262, with $243,082 of that owed to Jerry Coughlan, his attorney.
Before January, when a law permitting legal defense funds went into effect, council members were allowed to raise money for legal expenses connected with their council service through campaign contributions.
From 2003 until March 31, campaign disclosure statements showed Zucchet had paid Coughlan $84,500 and raised $272,642 in cash and loans.
From 2003 through Dec. 31, campaign disclosure statements showed Inzunza had paid Pancer $120,000 and had raised $134,564 in cash.
Aguirre said he will work with Inzunza and Zucchet to arrange for them to clear out their offices. Because of their convictions, Aguirre said, they cannot enter their old offices without an escort.
Some papers of council members must be retained as part of the city's historical record, Assistant City Clerk Joyce Lane said. Files involving administrative policy, council district issues, news releases and speeches must be kept on permanent file by the City Clerk's Office.
Murphy, for example, has dropped off 150 boxes at the City Clerk's Office. Lane said he has more boxes to come.
CITY HALL TRIAL: AFTERMATH, Councilmen will step down Zucchet resigns; word from Inzunza expected tomorrow
By Ronald W. Powell, Jennifer Vigil & Matthew T. Hall,, UT, 7/20/05
Michael Zucchet, with his wife, Teresa, departed his news conference yesterday after he announced his resignation from the San Diego City Council. Zucchet was convicted Monday in the City Hall corruption case.
The day after their convictions in a federal corruption trial, San Diego Councilmen Michael Zucchet and Ralph Inzunza decided to resign, setting the stage for a November election to replace them.
Zucchet, who has represented District 2 since his election in November 2002, announced his resignation at a 5 p.m. news conference outside City Hall. He spoke haltingly as his wife, Teresa, stood by wiping away tears.
Calling the past 21⁄2 years a "nightmare," Zucchet said he was stepping down so a successor could be chosen in a Nov. 8 special election and so the people of his district would have a representative.
"It pains me greatly that some people will infer that I am somehow giving up or making an admission of some kind," Zucchet said. "Nothing could be further from the truth. I loved this job more than anything else I've done in my life. I still can't believe my days of service to this city are over – for now."
Inzunza's attorney, Michael Pancer, said yesterday the councilman plans to resign tomorrow, effective Monday.
"He's doing it because he thinks it's the right thing to do," Pancer said.
Contacted at home, Inzunza said, "I'm not commenting to the media anymore. I'm done."
The councilmen were convicted Monday on conspiracy, extortion and fraud charges for accepting campaign contributions and cash from a Las Vegas strip club owner who wanted them to help loosen the city's no-touch laws involving strippers and their customers.
Legal experts predicted they could face three to four years in prison.
The resignations by Zucchet and Inzunza are necessary first steps to restore the nine-seat City Council to full membership. It now has six members as a result of the departure last week of Mayor Dick Murphy, and the convictions of the two council members.
Murphy's vacancy could be filled Tuesday in a special election if one of the 11 candidates for mayor wins more than 50 percent of the vote. If not, a runoff will be held Nov. 8 between the top two vote-getters in conjunction with a statewide special election called for by Gov. Arnold Schwarzenegger.
City Attorney Michael Aguirre said his office would begin preparing a resolution today so the city can start the process of filling the vacant council positions. He said the council elections, the statewide vote and a possible mayoral runoff could all be held Nov. 8.
"The most important thing now is that these council members are doing what they can to help the situation," Aguirre said. "They deserve the appreciation of the community of San Diego. They could have made it much more difficult. There could have been a legal fight about it."
Under the law, the two could have fought to keep their jobs until sentencing, scheduled for Nov. 9.
Assistant City Clerk Joyce Lane told the City Council in a memo yesterday that Zucchet's and Inzunza's council seats would need to be vacated by July 28 in order to hold a special election Nov. 8.
Their offices could be declared vacant if the convicted councilmen file their resignations with the clerk's office by July 28, or if the council voted to declare their seats vacant because of unexcused absences.
The council can decide a vacancy has occurred if a member misses eight consecutive council meetings or 50 percent of the scheduled meetings in a month. Aguirre said yesterday that Zucchet and Inzunza have already missed half the scheduled meetings this month.
Because of their convictions, Zucchet and Inzunza are banned from carrying out their legislative duties, including attending council meetings, and are deprived of pay and benefits.
Lane said the city could save money by consolidating the council elections with the Nov. 8 statewide special election. She estimated it would cost the city about $125,000 to hold the replacement elections then, but would cost about $750,000 to hold them as stand-alone elections.
Should the seats become vacant by July 28, Lane wrote, the council could authorize the Nov. 8 special election at an Aug. 1 meeting. The clerk's office would open a nomination period for candidates Aug. 2, with an Aug. 12 deadline for filing nomination papers.
Lane said the city charter requires the holding of a special election when a council member has more than a year remaining on his term. The terms for Zucchet and Inzunza expire in December 2006.
Following Zucchet's resignation speech, council members Scott Peters and Toni Atkins, who was elected Monday to serve as mayor pro tem, said they supported the decisions of Inzunza and Zucchet.
Peters said both men "showed a lot of courage today, and we appreciate what they did for the city."
Atkins said the resignations spared council members from being asked to expel their colleagues. "I think we are relieved," she said.
Some community members said the resignations would be good for the councilmen's districts.
"Michael has been preoccupied for months and hasn't been able to give probably what he'd want for a lot of the important issues just because he's been fighting for his own job and his own career," said Ernie Hahn II, general manager of the ipayOne Center at the Sports Arena. "That's understandable, but there are too many issues that need to get done."
Donald Cohen, president of the Center on Policy Initiatives, a local think tank that supports labor issues, said Zucchet's decision was best for the councilman but also "a terrible thing for him, his family and the city."
"This guy is a good public servant, he said, "and if every voter and every juror could have seen what you saw tonight in seeing his statements, then you'd know that he was a good public servant, and you would know he was innocent."
Jan Johnston, chairwoman of the Otay Mesa-Nestor Community Planning Committee, said Inzunza had a large impact on the 8th Council District, but that it would recover as it did five years ago.
The district was without an elected representative for about four months after the November 2000 election of Councilman Juan Vargas to the state Assembly.
Yesterday morning, long before Zucchet's resignation, the public comment period at the City Council meeting was dominated by residents concerned about the councilmen's convictions and by recent lawsuits filed by Aguirre regarding the city's troubled pension system.
Those who discussed Inzunza and Zucchet called for them to place their communities first.
"I believe it's time for Councilmen Zucchet and Inzunza to resign," resident Dan Beeman said. "If the public wants them back, they can re-elect them."
Another resident who supports replacing the councilmen, Clive Richard, reflected the awkward nature of Atkins' ascendence Monday, addressing her as "Madam interim mayor pro tem."
Atkins took charge of the meeting on her first full day as mayor pro tem, a job that could end as soon as Monday when the City Council names a long-term temporary mayor.
She admonished audience members to withhold applause and instructed them they could speak only for the allotted three minutes because of the large amount of business the city had scheduled.
But there was also a light moment that captured the novel circumstances of a council operating in the wake of the resignation of its mayor and the convictions and suspensions of two colleagues. It occurred as Councilman Brian Maienschein was addressing Atkins on a Mission Hills development issue.
"Madam mayor pro tem, whatever. Who knows?" he said.
Two are suspended from San Diego City Council, face prison terms
By Karen Kucher, Debbi Farr Baker and Gregory Alan Gross
SAN DIEGO – Acting Mayor Michael Zucchet and Councilman Ralph Inzunza were convicted Monday on federal corruption charges by a jury that found the politicians conspired with a strip club owner to ease restrictions on strippers.
The convictions in San Diego's biggest political corruption case in 30 years come in a city already under a cloud of massive financial problems. The verdict further complicated the city's situation because Zucchet was the city's acting mayor.
Zucchet was convicted of one count of conspiracy, five counts of wire fraud and three counts of extortion. Inzunza was found guilty of one count of conspiracy, nine counts of wire fraud and three counts of extortion.
Under state law both Zucchet and Inzunza were immediately suspended from office without pay and must forfeit their posts when they are sentenced, City Attorney Michael Aguirre said. They are due to be sentenced in Nov. 9 and each faces an estimated three to four years in prison.
At a City Council session later in the afternoon, the remaining council members unanimously voted Councilwoman Toni Atkins as the city's acting mayor for this week's council sessions. The council will vote on the mayoral position again next week.
Zucchet and Inzunza had contended they accepted only legitimate campaign contributions and were just doing their jobs. But jurors agreed with the prosecution that the contributions and cash the councilmen accepted came in exchange for their promises to scale back the rules.
Outside the court, Inzunza, after thanking the judge and his attorneys for their work, maintained his innocence.
"I want to let everyone know that I believe I have done nothing wrong," Inzunza said. "I believe that what I did was within the law... I do believe that I am innocent and will continue to fight this."
While Inzunza spoke, some in the crowd yelled derogatory statements, calling him a "crook," while others shouted words of support.
Inzunza's attorney, Michael Pancer, called Inzunza and Zucchet "people the city should be proud of."
Zucchet did not address reporters immediately after the verdict.
"His reaction is total sadness," Zucchet's lawyer Jerry Coughlan said.
Zucchet became interim mayor Friday after Mayor Dick Murphy's resignation became effective.
"I suspect he'll be in the 'Guinness Book of World Records' for the shortest time as mayor," Coughlan said.
U.S. Attorney Carol Lam said the verdicts mark a new day for San Diego politics – "a day in which our politicians do not trade away their obligations to the public for personal gain."
"The verdicts in this case show that the citizens of San Diego have the right to hold their public officials to a higher and better standard than the conduct that was evidenced in this trial," she said at an afternoon news conference.
Defense lawyers said the convictions would be appealed.
The other defendants
The jury also convicted Las Vegas lobbyist Lance Malone, who was working for the strip club owner, of conspiracy and wire fraud charges. He was found not guilty of interstate travel in aid of racketeering.
David Cowan, an aide to then-Councilman Charles Lewis, who also was charged but subsequently died, was acquitted of making a false statement to the FBI.
Cowan's attorney, Michael Crowley, said he was pleased his client was acquitted, but, as for the other defendants, Crowley said: "I'm disappointed. I don't think they were guilty of anything."
Malone's boss, strip club owner Michael Galardi, and club manager John D'Intino pleaded guilty, and Galardi testified against the defendants.
"I'm not exactly going to go out and buy horns and hats," quipped Malone's lawyer, Dominic Gentile.
The jury's decision
Jurors had received the case Wednesday. They spent about an hour in the deliberations room Monday morning before announcing they had reached their verdicts.
Pancer said he was surprised the jury came back with a verdict as swiftly as it did.
"I think it was a very quick verdict, given the length of trial," he said.
Juror Mike Nichols said the panel actually reached its verdicts on Friday but waited until Monday for a legal ruling from U.S. District Judge Jeffrey T. Miller.
Niki Coates, a 59-year-old juror from Carlsbad, said the trial was hard on all the jurors.
"We feel for the families. I have kids the same age as the councilmen," said Coates, a retired nuclear plant worker. "But justice was done and it was the right verdict."
Nichols, a 28-year-old from North Park who works for an insurance company, said the councilmen kept taking campaign contributions even though they knew they would never be able to overturn the no-touch law.
"They kept taking donations. They knew it wasn't going to go anywhere, but they still accepted the money," Nichols said.
"They pulled a dead horse over the finish line," Nichols said. "That was the quid pro quo."
Pancer said there were three things that figured into the jury's decision: the turmoil at City Hall, the general feelings that the public has about politicians, in San Diego and across the country, and the public's feeling about strip clubs.
"We thought it would be hard to put these feelings aside," Pancer said. "That's why we wanted a judge to try the case."
Pancer said he was surprised about the verdicts.
"Given what the government had to prove," Pancer said, "we don't think they even came close to meeting the burden."
Waiting
Inzunza and Zucchet were accused of trading $34,500 in campaign contributions and cash for their efforts to repeal the law forbidding touching between strippers and club patrons.
As the city waited to hear of the verdicts, more than 20 television crews were set up near the front steps of the federal courthouse, and about 100 spectators and news reporters gathered upstairs, in the hall outside the courtroom.
Members of Inzunza and Zucchet's family greeted and hugged each other outside the courtroom. The two accused councilmen exchanged hugs before going inside.
Testimony in the trial began May 3. Roughly 40 witnesses testified, and about 200 clandestinely recorded conversations were played for the jury.
In his closing argument, Assistant U.S. Attorney John Rice had told jurors that people who are engaged in bribery don't make a public announcement about what they're doing and urged jurors to use 'common sense' in reviewing the evidence.
The prosecution used secretly recorded conversations and photographs taken of the defendants at various meetings to build its case. Rice said the councilmen used 'disguised money, bogus e-mails, sham issues and counterfeit citizens' to sneak the issue onto the City Council's agenda to try to accomplish their goals.
The councilmen, along with Malone, are free pending their November appearance before Miller.
Lam would not speculate on what kind of sentence the government would recommend for any of the defendants.
Conspiracy to commit wire fraud carries a maximum of five years in prison and a $250,000 fine. Each count of wire fraud and extortion carries a maximum of 20 years in prison and a $250,000 fine.
The counts can be run concurrent with each other for purposes of sentencing, Lam said.
Origins of the case
The corruption investigation, which involved an estimated 100,000 wiretap intercepts, grew out of an FBI case that began in 1999 at the Cheetahs strip club in Kearny Mesa out of concern that the mob was infiltrating the local adult entertainment industry.
The FBI's special agent-in-charge in San Diego, Dan Dzwilewski, said Monday that the councilmen's involvement in the case came to light after the FBI's Organized Crime Unit began investigating Galardi.
"When we ascertained in this investigation that the Galardi enterprises had infiltrated the San Diego City Council with a plan to help elect those candidates that would serve their needs in the future, our focus changed," Dzwilewski said.
"We never anticipated that the spotlight in this investigation would turn to our political candidates and elected officials here in San Diego," he said.
The public learned about the investigation May 14, 2003, when authorities raided City Hall, three Galardi-owned clubs in San Diego and Las Vegas, and D'Intino's La Jolla condominium.
The prosecution argued that Inzunza and Zucchet accepted money from club owner Galardi through his bagman, Malone, in a scheme to repeal the no-touching law at his Kearny Mesa club. The rule, which prohibits physical contact between dancers and patrons, has cut into profits at local clubs since it was adopted in 2000.
Galardi wanted to return to the old standard, in which police vice officers had to decide what constituted 'lewd and lascivious' behavior on the part of dancers. That standard was more difficult to define and enforce.
According to the prosecution, Galardi hired Malone to make it happen. Prosecutors said Galardi's plan was to bribe a San Diego police officer, Russ Bristol, who they contend the council members believed to be corrupt, for warning of vice inspections at Cheetahs, and to pay public officials to change the law.
From 2001 to 2003, Galardi and Malone gave the three councilmen $23,150 in campaign donations and $18,000 in cash, according to testimony.
During closing arguments, Pancer suggested Inzunza was prosecuted because of his liberal politics and his association with the adult-entertainment industry. Pancer called the government's case a "train wreck" and called its surveillance photos a "dog-and-pony show." He also said that Inzunza acted within the law when he solicited and accepted campaign contributions from Malone and that there was no quid pro quo agreement between them.
Coughlan argued that Zucchet refused to take orders from a strip-club lobbyist, did his own research and ultimately decided to send the lobbyist's issue into a bureaucratic "black hole."
Coughlan portrayed Zucchet as a guileless politician who was sympathetic to Malone's issue but skeptical of his methods. He said Zucchet's only interest in dealing with Malone was to get rid of two all-nude clubs in his district.
Coughlan also argued that FBI informant Tony Montagna intervened to resurrect a case that otherwise would have fizzled.
Crowley said Cowan cooperated with the government during the investigation. Cowan now works for Lewis' successor, Councilman Tony Young.
Crowley said Cowan told agents and prosecutors that his boss had received complimentary tickets to a Las Vegas show from Malone, and that Cowan had escorted Malone to a break room behind council chambers so Malone and Lewis could meet. He also said that Cowan never discussed the no-touch issue with Malone.
Gentile argued that Malone was kept in the dark about the bribery plots, did not deliver cash to the councilmen, and that Montagna was the instigator in the case.
Closing arguments begin in San Diego corruption trial
By ELLIOT SPAGAT, The Associated Press,Wed., July 6, 2005
SAN DIEGO -- A strip club lobbyist recruited three San Diego councilmen to accept campaign contributions in exchange for efforts to repeal a ban on customers touching dancers at nude bars, a federal prosecutor said Wednesday in closing arguments of a corruption trial.
Councilmen Michael Zucchet and Ralph Inzunza are on trial along with Lance Malone, a former Clark County, Nev., commissioner and lobbyist for Las Vegas strip club owner Michael Galardi, who owned a San Diego club called Cheetahs.
The third councilman, Charles Lewis, died of liver illness last year at age 37.
Assistant U.S. Attorney John Rice told jurors that Inzunza raised money for Zucchet's 2002 campaign, expecting Inzunza to deliver enough votes on the City Council to overturn the no-touch law. The law was adopted in 2000 and was never repealed.
"No one's going to stand on a street corner and say, 'Hey, I'll take a bribe in return for helping you.' That's not they way it works," Rice argued.
The prosecutor played a series of secretly recorded conversations dating back to 2001 between Malone and his boss, Galardi, and between Malone and the three councilmen.
In a tape from July 2002, Inzunza referred to Zucchet as "my boy" and told Malone that Zucchet needed money.
"There's one thing that these numerous conversations that we listen to make dreadfully clear. There was only one thing on Lance Malone's mind when he came to San Diego: Get rid of no-touch," Rice said.
Rice said Malone and the councilmen developed a scheme to slip the repeal of the no-touch law into a broader set of regulations governing adult entertainment. The prosecutor used a large screen to show photographs of the defendants with dollar signs next to each one.
The screen showed the phrases "disguised money," "sham issues," "bogus e-mails," "counterfeit concerned citizens."
The councilmen were indicted in 2003 on charges of fraud and conspiracy to commit wire fraud. Zucchet and Inzunza also were charged with extortion. Prosecutors allege that the councilmen received cash bribes and campaign contributions totaling $34,500 between July 2001 and April 2003.
Galardi was a key prosecution witness and testified last month that he hatched the plan to bribe the councilmen.
He pleaded guilty to conspiracy and is awaiting sentencing. He also has pleaded guilty in a parallel corruption probe in Las Vegas, which is scheduled for trial in January.
Lansdowne testimony troubling for some
Police chief calls reactions surprising, holds to his words
By Kelly Thornton, STAFF WRITER, July 2, 2005
Law enforcement officials said yesterday they were troubled by San Diego Police Chief William Lansdowne's decision to testify as a character witness for Councilman Michael Zucchet at the City Hall corruption trial, and directors of the San Diego Police Officers Association were planning to discuss possible action.
"When I first learned of it, I was shocked, surprised and obviously concerned regarding his decision to voluntarily testify on behalf of the defense," said U.S. Marshal David Bejarano, who was San Diego police chief during the corruption investigation. "I can't discuss any facts of the case, since our department worked closely with the FBI on the investigation and it was during my tenure, but I believe it undermines the reputation of the police department, the investigation and the people involved. I couldn't believe it when I saw that he had testified." Lansdowne appeared in court Wednesday, along with Fire Chief Jeff Bowman, testifying for about five minutes that in his dealings with Zucchet, the councilman had always been "forthright and truthful." Lansdowne and Bowman said they received phone calls, rather than subpoenas, from defense attorneys asking them to testify, and they agreed.
Zucchet and Councilman Ralph Inzunza are on trial with Las Vegas lobbyist Lance Malone. They are charged with accepting money in exchange for efforts to repeal the law banning touching between strippers and patrons.
Strip club owner Michael Galardi pleaded guilty and testified against the other defendants. During his testimony, Lansdowne said: "Mr. Zucchet has been professional and above board. I find him to be a very competent politician."
On cross-examination by Assistant U.S. Attorney Michael Wheat, Lansdowne acknowledged that one of his first acts as chief was to appear beside U.S. Attorney Carol Lam at a news conference Aug. 28, 2003, when grand jury indictments against Zucchet, Councilmen Ralph Inzunza and Charles Lewis and strip club associates were announced. Lansdowne had been sworn in as chief about three weeks earlier. Lansdowne said yesterday that he did not anticipate the controversy caused by his courthouse appearance, but he stands behind his decision to testify. "I've been really surprised. I've never been taken to task for telling the truth before," Lansdowne said. "I think we have an obligation as law enforcement professionals if we're asked, either by the defense or prosecution, to provide the information that's requested." Lansdowne said he was not chief during the investigation, and he met Zucchet after the indictments. "The statements I made relate only to the time that I've known Mr. Zucchet. It has nothing to do with the case that took place. I wasn't here. It was four questions in five minutes of testimony."
Lansdowne said that before his testimony, he received a call from Zucchet's attorney, Jerry Coughlan, who asked him those same four questions he was asked in court. "I gave him the answers, he said 'I want you to testify,' and I knew either I'd agree, or they'd subpoena me," Lansdowne said. "Once you tell them what you're going to say, they either say they like it or they don't. Once they like it, they're going to get you in there. You can always fight it, but my thing is, telling the truth never causes you a problem. That's why I'm so surprised."
Lansdowne also wrote a letter to the editor of The San Diego Union-Tribune about his appearance as a witness. The letter is published today on the newspaper's editorial and opinion pages. Explanations aside, former chief Jerry Sanders said Lansdowne's brief but prominent foray into politics could stain the department's reputation. "I see it as a huge conflict of interest," said Sanders, who is running for mayor. "If your department initiated the investigation and has been heavily involved in it, I don't think you go over and testify for the defense voluntarily. . . . . It's unfortunate for the Police Department. I think it's going to have a lasting impact."
Sanders said he met with a group of retired officers on another matter yesterday and Lansdowne's testimony was a hot topic. "They said, 'Why would a chief do that?' They were very upset about it. Nobody minds when you're subpoenaed, but people were shocked he voluntarily went over. That's something you just don't do."
Bill Nemec, president of the San Diego Police Officers Association, said he has received calls from members, and he plans to call a meeting with the nine-member board of directors and decide what, if any, action to take. "We're not taking any concrete position until I consult with the rest of the directors," Nemec said. "I've got some reaction from the membership and it hasn't been favorable."
Possible action could be anything from issuing a statement to meeting with the chief. Some officers and detectives said they were disappointed in the top cop. "I was completely surprised and insulted that my former chief of police (whom we briefed on this case) would take it upon himself to comply with a telephone request from the defense, for the purpose of testifying as to the character and honesty of one of the defendants," said Victor Shuman, a retired criminal intelligence detective who worked with the FBI on the corruption case. Shuman, in an e-mail to The San Diego Union-Tribune, called upon the police officers association leadership to take a stand on the matter. "The chief of police as far as I'm concerned . . . has an absolute responsibility to the men and women who work for him.
I don't know of one San Diego police officer who would agree to appear in court for the defense unless they were properly served a court-authorized subpoena."
Lam declined to comment.
City Attorney Michael Aguirre offered harsh criticism of the chief's stint on the stand. "Mr. Lansdowne needs to consider whether he can continue as chief," Aguirre said. "He has undermined a federal criminal prosecution in which his office played an important role."
Some attorneys applauded the chief's reasoning. "I think he did what he felt was the right thing to do, and doing the right thing is not always the easiest thing to do," said Nancee Schwartz, a criminal defense attorney and member of the Citizens' Review Board on Police Practices, an oversight panel. "I agree with what the chief said, it's not wrong to tell the truth. I respect the reason why he did it. "It's important for people to be willing to testify for the defense in a criminal proceeding because it's generally not a popular position to take. I would respect anyone's decision to do so."
'Strippergate', Legal experts: Case against councilmen hinges on intent
By DOUG SHERWIN, The Daily Transcript, June 29, 2005
The high-profile corruption trial involving two San Diego City Councilmen is more than a month-and-a-half old, and the outcome is still in doubt, according to legal experts.
As the defense begins presenting its case in what has become known as "Strippergate," it is unclear which side should really be getting excited.
"It's a tough case to handicap," said Shaun Martin, a University of San Diego School of Law professor who's been following the proceedings. "It's always difficult to look into someone's heart and guess what their intent was, and that's basically what the prosecution is asking the jury to do."
Councilmen Ralph Inzunza and Michael Zucchet are accused of participating in a scheme to repeal the city's no-touch provision in strip clubs.
As part of a 39-count indictment, the two face allegations of accepting money from strip club officials while agreeing "to be corruptly influenced in the performance of their official duties to advance the repeal of the no-touch provision."
The prosecution finished presenting its case last Friday, but so far, there have been no shocking revelations.
"People expected the prosecution to come out and try to deliver a knockout blow, and they definitely have not done that," said Martin, who teaches civil procedure and professional ethics at USD. "It appears they're not trying to do that. It appears they're holding a fair amount in reserve ... most likely for rebuttal.
"The prosecution is playing it like an NBA game -- the only thing that matters is the fourth quarter. It's a tactical decision on their part to wait until the fourth quarter."
The prosecution's case was enough, however, for U.S. District Judge Jeffrey T. Miller to deny a defense motion for acquittal of Inzunza and Zucchet. The defense argued that the government hadn't presented the evidence for a reasonable jury to convict.
The same motion was made for a third defendant in the case, David Cowan, but Miller decided to take it under advisement. Cowan, an aide to late Councilman Charles Lewis, is accused of making false and misleading statements to authorities.
A Cowan dismissal could bode well for the others.
"That is the interesting issue," said San Diego attorney Colin Murray, a former deputy district attorney for the county. "If one of the defendants suddenly disappears, the jury will wonder why he isn't there. And if the case against him is weak, it makes a broader comment about the allegations against the other defendants."
Much of the prosecution's initial case revolved around taped conversations involving the councilmen and strip club officials, and the cooperation of former defendants Cheetah's owner Michael Galardi and the club's manager John D'Intino.
The debate surrounds money Inzunza and Zucchet received from Galardi, D'Intino and lobbyist Lance Malone, who's also been named in the conspiracy.
The council members claim they only accepted legal campaign contributions, while the prosecution insists they took it in exchange for trying to change the no-touch provision.
Candidates are allowed to receive money, but they can't promise official action in exchange for the contributions.
"This strikes me as politics as usual," said Gary Gibson, an adjunct professor at California Western School of Law and a deputy public defender. "It's why I have a hard time seeing what they did is wrong as long as it's not explicit quid pro quo.
"It's not illegal to contribute and expect them to act on your behalf. (Lobbying politicians) happens in every city, in every state in the U.S. every day."
According to trial observers, there hasn't been any hard evidence showing that the council members promised future action on the no-touch provision in exchange for money.
"The tough part of what they have to show is essentially a corrupt intent on the minds of the defendants," USD's Martin said. "At the same time it's tough for the defense because there's a lot of things that smell very fishy about the way things happened here."
"What (the prosecution) want the jury to do is read between the lines," said Pamela Wilson, a partner with Sullivan Wertz McDade & Wallace. "Where is the direct evidence?"
As the defense continues to present its case, the debate now focuses on whether Inzunza or Zucchet will take the stand.
"If I was a betting man, I'd say it's more likely than not that one of them will testify," Gibson said. "It may answer a lot of unanswered questions for the jury."
He noted the inherent risks in such an action, including the chance any testimony could inadvertently help the prosecution.
Notably absent from the stand during the government's case was D'Intino, although one observer wondered what he would add since he was heard on the recorded tapes.
If D'Intino is put on the stand, "then it's open season in front of a seasoned defense attorney, who has yet another opportunity to advance their theory on the case that the government pushed the whole scheme on Lance Malone and the (other) defendants," said Murray, a partner with Baker & McKenzie.
He believes the case could end up with varying verdicts.
"One defendant could be convicted and another acquitted," Murray said.
Added Martin, "I think the defense is very hopeful and very happy there haven't been any major bombshells that they weren't ready for."
Defense tries to discredit Galardi
Questioning targets club owner's wealth
By Kelly Thornton, UNION-TRIBUNE, June 16, 2005
Defense attorneys attacked strip club owner Michael Galardi yesterday on a number of fronts, trying to show the jury that the government's star witness in the City Hall corruption trial was motivated to fabricate testimony to safeguard his wealth and assuage his fears of prison.
Still stinging from Galardi's sensational allegations Tuesday that he paid cash bribes to San Diego Councilmen Ralph Inzunza, Michael Zucchet and Charles Lewis through the alleged bagman, Las Vegas lobbyist Lance Malone, the defense attempted to demonstrate to jurors that Galardi was so desperate to curry favor with prosecutors that he made up the allegations.
Perhaps the most significant testimony yesterday for the defense was Galardi's concession he made a "mistake" when he first told the government about a cash bribe to Lewis.
In meetings with prosecutors and FBI agents July 15-16, 2003, in Phoenix before Galardi and the others were indicted, he said he gave Lewis $2,000 in cash through Malone, and that the handoff occurred in a bathroom at a fundraiser around Horton Plaza.
But during his testimony this week, Galardi has made no mention of that. He said there were four occasions in which Malone delivered cash bribes on his behalf: $500 to Lewis when he was a council candidate in 2001; $2,000 in cash and $3,000 in campaign checks to Lewis on July 9, 2002; $2,000 apiece to Lewis, Zucchet and Inzunza at the end of March 2003; and $10,000 divided among all three April 16, 2003.
Developments
Defense attorneys try to debunk strip club owner Michael Galardi's claims of cash bribes to the three city councilmen.
The defense portrays Galardi as a multimillionaire desperate to save himself and make a plea deal.
Defense attorneys are to resume cross-examination of Galardi today. "It was a mistake at that time. I just had my facts wrong. I still gave him the $2,000, just later on," Galardi said. In previous testimony, the government has shown that a fundraiser for Zucchet at the Panda Inn in Horton Plaza was attended by Malone and Galardi on July 19, 2001, but Lewis did not attend.
Galardi and Malone were indicted in August 2003 with San Diego Cheetahs strip club manager John D'Intino and Inzunza, Zucchet and Lewis on charges they traded money for efforts to repeal the city's law banning touching between strippers and patrons. Like Galardi, D'Intino has pleaded guilty and is expected to testify. Lewis was dropped from the indictment after he died in August.
Also notable from yesterday's cross-examination were Galardi's accusations concerning Assistant U.S. Attorney Eric Johnson, the original prosecutor in the parallel corruption case in Las Vegas.
Galardi testified that at the July 15-16, 2003, session with the government in Phoenix, he did a "double-take" when he saw Johnson. He recognized him as a customer at Cheetahs who had accepted free drinks and lap dances at one of his Las Vegas strip clubs.
Johnson denied the allegations but was removed from the case because of the appearance of a conflict of interest. A Justice Department investigation was inconclusive, finding Johnson "credible" but Galardi "consistent."
The defense plans to call Johnson as a witness to discredit Galardi.
Galardi stood by his accusations yesterday when questioned by Inzunza's attorney, Michael Pancer:
"You told investigators you were 100 percent sure" Johnson had been in the club?
Galardi: "I'm still 100 percent sure."
Malone's attorney, Dominic Gentile, last week promised that Galardi would be "in a puddle on the floor of the courtroom." Yesterday, he humanized Galardi by eliciting testimony that the millionaire strip club owner's life was forever changed the day the FBI searched his San Diego and Las Vegas clubs and San Diego City Hall, and that his fear of prosecution sent him into a downward spiral of alcohol abuse followed by psychiatric treatment and anti-depressants.
Gentile made much of Galardi's finances, noting that his interest in the strip clubs in San Diego and Las Vegas amounted to about $42 million and that his 35,000-square-foot Las Vegas home is on the market for $20 million. Gentile asked Galardi about his home theater, racquetball and basketball courts, gymnasium and 15-car garage and the vehicles he stored in there: a Lamborghini, 911 Porsche, a couple of Mercedes, a pair of Hummers, two Yukon XLs and a Ferrari.
The message to jurors: Galardi had millions of reasons to offer lies to the government to secure his own deal.
Galardi acknowledged under questioning that in his dealings with the government, he was trying to avoid forfeiting his strip clubs. But he said he was trying to "be a man" and do the right thing by pleading guilty.
Galardi still owns and operates Cheetahs in Kearny Mesa, he said. The San Diego Police Department has declined to renew his nude-entertainment license, and he's in the process of selling the club to his father, strip club magnate Jack Galardi. Michael Galardi was required to sell his Las Vegas clubs under the terms of his plea agreement in Las Vegas. He sold them to his father.
Gentile's most significant point to jurors was that Malone was unaware Galardi was bribing San Diego police vice officer Russ Bristol, who was pretending to be on the take. Gentile coaxed Galardi to acknowledge he lied to Malone when Malone questioned him about paying Bristol for advance warning of vice visits at Cheetahs. In reality, Galardi was giving $2,000 a month.
Pancer, Inzunza's lawyer, tried to show jurors that Galardi was trying to save himself by falsely casting blame on others during plea negotiations. Pancer questioned Galardi about his accusations that Tony Montagna, his director of security, had left a message warning that raids would occur the next day, May 14, 2003.
When he made the statement, Galardi was unaware Montagna had been working undercover on the case for years as an FBI informant.
During Montagna's cross-examination a few weeks ago, he testified he knew suspicion would fall on him so he called Galardi the night before the raids.
Montagna said he left a message to "call me right away," knowing Galardi's phone would be off at the late hour. Montagna, who portrayed himself as having police and FBI connections in his undercover role, said the call gave him cover so Galardi and others wouldn't suspect him of betrayal. Galardi testified that in hindsight, he interpreted this call as a warning and told the FBI.
Cross-examination was contentious at times.
Galardi resisted Gentile's sometimes confrontational style, occasionally offering more commentary than the attorney asked for. In one instance, under questioning about how money is divided among club employees, Galardi shot back: "You should know that, your son worked there." Gentile's son, Adam, was employed at Cheetahs in Las Vegas and San Diego.
U.S. District Judge Jeffrey T. Miller lost patience with Galardi's propensity to volunteer additional information, at one point abruptly calling a break. Once the jury had filed out, Miller told the government to speak to Galardi. Assistant U.S. Attorney Robert Ciaffa and Galardi's attorney, Robert Rose, then did so.
Pancer tried to corner Galardi about implicating others so he could go free. "You knew that you had to be ready to testify against others, knowing they might go to prison? You did that so you might avoid going to prison? That was your idea of being a man and accepting responsibility?"
Galardi: "I was hoping everyone else would realize what they did was wrong, and I wouldn't have to testify."
Pancer: "It didn't work out that way, did it?"
Strip club owner says cash given directly to councilmen
By Kelly Thornton, UNION-TRIBUNE, June 15, 2005
In the most riveting testimony yet at the City Hall corruption trial, strip club owner Michael Galardi said yesterday he paid $18,500 in cash bribes to three San Diego city councilmen through his alleged bagman, Lance Malone.
Galardi said that on one of four occasions when cash was handed out to Councilmen Ralph Inzunza, Michael Zucchet or Charles Lewis, he waited in a car while Malone delivered the money to Lewis' City Hall office. Malone went in with money and came back empty-handed, Galardi said.
Inzunza and Zucchet showed no reaction in court as Galardi testified during the sixth week of the trial. Lewis was removed from the indictment after his death in August.
Yesterday's accusations prompted emotional denials from usually mum defense attorneys outside the downtown courthouse.
With Inzunza, Zucchet and their families gathered around, Zucchet's lawyer, Jerry Coughlan said, "He absolutely, unequivocally denies ever receiving cash from Mr. Malone."
Likewise, Inzunza's attorney, Michael Pancer, said, "Ralph Inzunza never received any cash from Lance Malone or from Michael Galardi."
Both attorneys said the allegations are inconsistent with the government's secret recordings and noted that the government never mentioned cash bribes in its opening statements.
"It is extremely significant that this fact was not mentioned at the time when generally you're putting you best foot forward in opening statements," Pancer said. Asked to explain further, Pancer said "stay tuned" for cross-examination.
Daily developments
Strip club owner Michael Galardi testifies that he had his lobbyist, Lance Malone, distribute $18,500 in cash to three city councilmen.
Attorneys for the councilmen react angrily to the testimony, saying their clients never received cash.
Defense attorneys will continue their cross-examination of Galardi today. Galardi, Malone and Cheetahs strip club manager John D'Intino were indicted with the councilmen in a scheme to trade money for efforts to repeal the law banning touching between dancers and patrons. Galardi and D'Intino have pleaded guilty and are cooperating with the government.
The defense has long maintained that any money given to the councilmen was properly reported as campaign contributions.
In the chronology of alleged cash bribes laid out yesterday:
Galardi testified he gave Malone $500 to give to Lewis, who at the time was chief of staff to Councilman George Stevens and running for his boss' seat. The cash was given during a trip Lewis made to Las Vegas sometime in 2001.
Galardi said he gave $2,000 in cash to Lewis, plus $3,000 worth of checks for his council campaign, which were delivered by Malone on July 9, 2002, while Galardi waited in the car in front of City Hall.
When asked why he gave the cash to Lewis, Galardi testified, "Because he (Lewis) asked for five." Galardi was referring to a May 28, 2002, recorded conversation in which Lewis directly solicited $5,000 from Galardi.
Galardi said he instructed Malone to give Inzunza, Lewis and Zucchet $2,000 apiece about the end of March 2003. Malone later reported that "they took the cash and everything was looking good," Galardi testified. Galardi testified that he gave Malone an envelope containing $10,000 in cash to give to the councilmen during a meeting he had scheduled with them on April 16, 2003. Malone had a breakfast meeting at the downtown Grant Grill with Zucchet that morning.
Galardi said he had given Malone the cash over a weekend their families had spent in Laguna Beach at an oceanfront resort.
Galardi testified he never witnessed the passing of money to Zucchet or the other councilmen, but that Malone had assured him the money had been delivered.
The government tried to show the jury that there is some corroboration on the recordings that Galardi gave cash to the councilmen. Assistant U.S. Attorney Robert Ciaffa played a recording of a Feb. 19, 2003, conversation between Malone and Galardi, in which they discuss concealing the source of campaign contributions so the councilmen don't suffer political fallout.
When Malone said he would tell the councilmen they don't have to worry about campaign checks linked to the adult entertainment industry, Galardi said: "Yeah, and say, 'Hey, you know . . . cash is still there too, buddy.' "
Asked by Ciaffa to explain what he meant, Galardi said, "I meant to give them more cash if they want it."
Legal experts said it is unusual that the prosecution did not tell the jury about cash bribes during opening statements, but it is not required and it could be part of a strategy to keep the jury interested and the defense guessing.
"It's not uncommon for either side to withhold certain information in opening statement in order to determine how that information will fit into its case, if at all," said Michael Attanasio, a San Diego white-collar criminal defense attorney and former federal prosecutor who handled public corruption cases in Washington, D.C. "Sometimes information is withheld in opening statements because you don't want the other side to have additional time to prepare to rebut that information."
Perhaps the government was waiting to evaluate the progression of the case, like a defense attorney would do in deciding whether to put his client on the stand, experts said. Or, the experts suggested, maybe prosecutors were downplaying the information because it hinges on the testimony of one cooperating witness.
"They may be examining the cost to their case of introducing a very controversial topic – in this case what appears to be alleged cash payments for which there may be no corroborating tape recording. So the government makes a game-time decision during trial whether it wants to introduce the alleged cash payments."
The government may have intended to downplay the issue, some said.
"It may be a way of the government essentially saying here's some more evidence, and we think it's good evidence, but we don't want the jury to decide this case focusing mostly on this piece of evidence because our other pieces of evidence are a lot stronger, or at least more corroborative," said Shaun Martin, a criminal law professor at the University of San Diego law school.
Galardi completed about nine hours over three days of direct examination by the government, and Malone's attorney, Dominic Gentile, began cross-examination that lasted about an hour.
Gentile tried to point out inconsistencies in Galardi's initial statements to the government compared with his testimony in court. Gentile elicited testimony about Galardi's plea bargain with the government, trying to demonstrate that Galardi had reason to embellish to gain favor with the government.
Meanwhile, the acrimony between some of the parties is becoming more evident as the trial goes on. Yesterday, Inzunza greeted prosecutor Ciaffa with, "Good morning." Zucchet, however, asked Ciaffa, "How do you sleep at night?"
During breaks, the councilmen, their lawyers and family members retreat to one end of the third-floor hallway. Malone generally remains in the middle of the hallway and doesn't mingle with the councilmen. Galardi avoids the defendants, chatting either with his attorney or with a courthouse security officer.
The government played a recording made May 14, 2003, the day the FBI searched City Hall and Galardi's San Diego and Las Vegas strip clubs. Las Vegas officials had been to Malone's home early that morning and taken him to the FBI office in an attempt to persuade him to cooperate.
He remained there until a little after 1 p.m. Galardi, who testified he was aware that something was going on but wasn't quite sure what, made a call to Malone at 1:22 p.m., just as the searches were getting under way. Malone spoke in a hushed, serious voice.
Malone: "Hello."
Galardi: "Where you at?"
Malone: "Don't say . . . ."
Galardi: "Hello?
Malone: "Don't say much."
Galardi: "OK. Call me back when you can.
Malone: "I can't."
Galardi: "OK. All right, buddy."
Malone: "You know what? You know what."
The conversation suddenly ended.
Judge grants 2 defense requests
By Kelly Thornton, Union Tribune, June 9, 2005
The judge in the City Hall corruption trial granted two defense requests yesterday that could significantly affect the case: Government witness Michael Galardi can't testify about bribing 17 officials in Las Vegas, but one of his alleged beneficiaries – a Las Vegas prosecutor – can testify that Galardi is a liar.
The first ruling means the government will be unable to use Galardi's testimony about Las Vegas bribes to show the jury that he and his Las Vegas lobbyist, Lance Malone, were engaged in a pattern of behavior repeated in San Diego.
The second ruling means the defense will be able to attack Galardi's credibility using one of the government's own prosecutors, Assistant U.S. Attorney Eric Johnson, who was the original prosecutor on the parallel Las Vegas corruption case.
Galardi said Johnson accepted free drinks and lap dances at one of his Las Vegas strip clubs. Johnson denied it, but he was removed from the case because of the appearance of a conflict. A Justice Department investigation was inconclusive, finding Johnson "credible" but Galardi "consistent."
Galardi and Malone were indicted along with San Diego Cheetahs strip club manager John D'Intino and San Diego Councilmen Ralph Inzunza, Michael Zucchet and Charles Lewis on charges that they traded money for efforts to repeal the city's law banning touching between strippers and patrons.
Galardi and D'Intino have pleaded guilty and are expected to testify against Malone and the councilmen. Galardi and Malone are the common thread in a parallel investigation in Las Vegas, which is scheduled for trial in January.
Allowing Galardi – who made a deal with the government – to testify that he bribed FBI agents, district attorneys, police officers, judges and elected officials in Las Vegas would unfairly prejudice the San Diego politicians and would "convert the San Diego case into a Las Vegas sideshow," Judge Jeffrey T. Miller ruled.
"The evidence would create the risk of unfair prejudice to defendants by creating and enforcing a stereotypical negative picture of all politicians as accepting bribes to perform their official duties," Miller said during a 45-minute hearing outside the presence of the jury, after regular testimony had concluded for the day.
Miller noted that such testimony is "not necessary to explain the nature of the relationship between Galardi and Malone in light of the extensive tape recordings and Galardi's anticipated testimony."
The government had argued that it only intended to present general evidence to "explain and put into context" Galardi's reasons for employing Malone – because Malone had accepted bribes from Galardi when he was a Las Vegas public official, and Malone had successfully bribed other Las Vegas officials on Galardi's behalf. The government had argued that it did not intend to introduce specific testimony that particular Las Vegas officials were bribed.
"The government has a right to inform the jury this did not occur in a vacuum," Assistant U.S. Attorney Robert Ciaffa told the judge.
Dominic Gentile, Malone's attorney, had filed a motion requesting that the testimony be excluded, or that he be allowed to refute it by calling the Las Vegas officials to the witness stand. He sent out letters and subpoenas this week to public officials he believed Galardi had identified as bribe recipients. Those subpoenas are now moot.
In regard to Johnson, Miller said he will allow the testimony because it will assist the jury in evaluating Galardi's credibility. "It will not confuse the jury, it will not create unfair prejudice to anyone and will not convert the San Diego trial into a Las Vegas trial," Miller said.
But Miller also said he was perplexed by preoccupation on both sides with matters of credibility when there are more than 100,000 secretly recorded intercepts to prove whether a witness is being truthful.
"There's a thought that keeps coming back like a thunderclap over and over," Miller said. "Both sides are trying this case as if the tapes don't exist, as if credibility were a central issue."
Michael Pancer, attorney for Inzunza, said the credibility factor is important because "Michael Galardi is going to make allegations that are not backed up by a tape." He did not describe what those allegations might be.
During testimony yesterday, defense attorneys finished their cross-examination of FBI agent Leonard Davey, who spent six days on the witness stand.
The defense continued to drive home its theme that Davey and the FBI, through its undercover operatives, pushed the case along with trickery and manipulation of the defendants.
For example, Pancer questioned Davey about FBI spy Tony Montagna's representations to Galardi that the other undercover operative, vice detective Russ Bristol, was about to be transferred. Galardi was paying Bristol – who was pretending to be on the take – for advance warnings of vice inspections at Cheetahs. Galardi had proposed paying Bristol $50,000 to tell the City Council that police thought enforcing the no-touching law was a waste of time.
Pancer played a conversation for the jury, trying to show that Montagna, under coaching from Davey, pressured the defendants to "hurry up." Montagna forced the issue by saying Bristol was going to be transferred and would not longer be available to help them repeal the no-touch rule if they didn't speed the process.
Davey did not agree.
Another FBI agent, Mary Lakatos, made a brief appearance on the stand to testify about surveillance photos taken of the councilmen at lunch meetings or a fundraiser.
And then, San Diego police Capt. Robert Kanaski, who was a lieutenant in the vice department during part of the corruption investigation, was sworn in. Under questioning by Assistant U.S. Attorney Michael Wheat, Kanaski said the no-touching law was an effective tool for the vice squad. Before the law was enacted, the law was vague, subjective and hard to enforce.
He testified that he was out of the loop about the corruption investigation until Zucchet initiated a meeting with him in March 2003 to discuss adult entertainment matters.
Kanaski said he was summoned to the U.S. Attorney's office at that point, briefed about the investigation and told to wear a hidden recording device for the meeting with Zucchet. Kanaski said he was not told what to say during the meeting with Zucchet. The government is expected to play the recording for the jury first thing today.
FBI agent, attorney spar over tactics, Witness defiant over undercover work
By Kelly Thornton, Union Tribune, June 8, 2005
As an FBI agent under cross-examination sparred with defense attorneys at the City Hall corruption trial yesterday, each side behaved with such defiance that some questions were eventually abandoned.
U.S. District Judge Jeffrey T. Miller ended the day a few minutes early, explaining outside the presence of the jury that he believed that the witness, FBI agent Leonard Davey, and defense lawyer Michael Pancer had "reached an impasse" on a particular line of questioning.
Davey, who is also a lawyer, was grilled mostly about his handling of the FBI's paid informant, Tony Montagna, and undercover San Diego vice detective Russ Bristol, who was pretending to be on the take.
During five hours of cross-examination, Davey refused to concede the defense's suggestion that under his direction, Montagna and Bristol were instigators whose trickery and manipulation fueled the case against San Diego City Councilmen Ralph Inzunza and Michael Zucchet and Las Vegas lobbyist Lance Malone.
Inzunza, Zucchet and the late Councilman Charles Lewis were indicted along with Malone; his boss, strip club owner Michael Galardi; and Cheetahs manager John D'Intino. They allegedly traded money for efforts to repeal the city's law banning touching between strippers and patrons. Galardi and D'Intino have pleaded guilty and are expected to testify against the others.
Lawyers for Zucchet and Inzunza tried to show the jury during Davey's cross-examination that under direction from Davey and the FBI, Montagna pushed Malone into questionable behavior.
Developments
Defense attorney Jerry Coughlan seems to be starting to draw a contrast between his client, Michael Zucchet, and Ralph Inzunza and Charles Lewis.
Michael Galardi, the Cheetahs strip club owner, might testify this week.
Judge Jeffrey T. Miller is expected to hear arguments today on defense attorney Dominic Gentile's motion to exclude evidence related to alleged payoffs to Las Vegas officials. The lawyers said Montagna did this by offering to launder campaign contributions to the councilmen, send bogus e-mails to council members, and provide a phony address for a Galardi employee posing as one of Zucchet's constituents who appeared before a council committee April 30, 2003. All this was to further the cause of repealing the no-touch rule.
Pancer, Inzunza's lawyer, and Jerry Coughlan, Zucchet's lawyer, suggested that Montagna's efforts to help Malone meant the lobbyist never had the opportunity to do it himself.
"As a result of Anthony Montagna having to do that, it was less likely Lance Malone would get a legitimate (e-mail) campaign going?" Pancer asked Davey.
Davey responded, "It's hard to speculate about what Lance Malone would have done."
Pancer tried again. "Had Anthony Montagna not agreed to send e-mails, there was a better chance Lance Malone might have gotten a legitimate e-mail campaign going?"
Davey replied, "I don't know. I can't speculate on what Lance Malone might have done. ... He could have reached out to anybody in San Diego. He chose not to."
Pancer and Coughlan repeatedly asked questions in which they wanted a "yes" or "no" answer, but Davey instead gave explanations. When a question was posed a second or third time, Davey repeated the same answer. The frustrated lawyers objected. Judge Miller sustained some of the objections.
Unfriendly or even contentious interaction between a witness and his questioner is not unusual, but how the behaviors will affect the jury is anybody's guess, experts said.
"A witness doesn't want to appear to be hiding something, and the lawyer doesn't want to appear they are preventing the witness from giving a full answer," said former San Diego U.S. Attorney Chuck La Bella, now a criminal defense attorney. "There's that dynamic going on all the time. How do you strike that delicate balance?"
Galardi was paying Bristol, the undercover San Diego vice detective, about $2,000 a month for advance warnings of vice inspections at Cheetahs. Galardi was trying to circumvent the no-touch law until he managed to get it repealed. Galardi had also proposed paying Bristol $50,000 to appear before the City Council and say the no-touch law is a waste of police time.
Pancer tried to show that Bristol indicated he was willing to appear before the council to say that. The defense has said the councilmen were only willing to pursue a repeal if the police supported it.
Pancer played a conversation for the jury in which Malone asked Bristol to attend breakfast meetings with Inzunza and Lewis to discuss the Police Department's views on adult entertainment laws. Bristol, whose responses are often noncommittal "mmhmms" or "right," said he would check his calendar.
Under questioning, Davey explained that Bristol behaved just the way he was told, since he was instructed to "never say yes, never say no" when speaking with the defendants. And eventually, Bristol bluntly told Malone, Galardi and D'Intino that he would not appear before any council meeting.
Pancer played a recording for the jury meant to counter that testimony. In that conversation, Bristol explained to Malone and D'Intino why he could not make a call and get the adult entertainment ordinance on the council docket.
Bristol: "The problem is, if you look at the way we're set up, if I call them and say I wanted this on the docket ... and I say put it on, the next day there's gonna be a call over to our office saying, 'Who the hell is this guy and what the hell is he doing?' We don't have the authority to put it on the docket."
Malone: "Well they made it seem like you did have the authority to deal with an issue that was of concern to the Police Department."
Bristol replied that police cannot put items on a council agenda. It has to be done by council members. "If they can get that on the docket and then get it to a hearing, then based on what we've been through I don't have a problem going in and saying whatever we want. 'Cause we can make whatever we want happen."
Pancer asked Davey if he heard the part of the recording in which Bristol said, "I don't have a problem going over there." Davey said yes, he heard that.
For the first time, Coughlan seemed to draw a distinction between his client – Zucchet – and Inzunza and Lewis. Coughlan noted during questioning that Zucchet made no phone calls to Malone in 2002, and made just a few calls to him in the three-year investigation.
And, contrasting Zucchet with Lewis, Coughlan tried to show a distant relationship with Malone by asking Davey: "Even after the (public safety committee) hearing on April 30, 2003, we heard a tape where Mr. Malone called Mr. Lewis and thanked him. Was there such a call to Mr. Zucchet?"
Davey replied no. Zucchet, a member of that committee, had helped Malone by asking that an adult entertainment matter be referred to the City Attorney's Office. Malone was ecstatic that he had finally managed to get the councilmen to take official action.
Coughlan suggested through questioning that the FBI improperly influenced Zucchet's election by laundering campaign contributions for council members. Davey testified that Galardi would give cash to Montagna, who would then enlist help from the FBI to convert the money into checks that could not be linked to the adult entertainment industry.
Coughlan: "Did you consider just seeing whether Mr. Galardi or Mr. Malone could come up with (donors) without Tony Montagna?"
Davey: "It was a request by Mr. Galardi and Mr. Malone."
Coughlan: "Objection. Nonresponsive. Move to strike."
U.S. District Judge Jeffrey T. Miller: "Objection sustained."
Davey: "We did not consider it."
Moments later, Coughlan continued: "You didn't say to Tony Montagna, let's just see if (Malone) can do it on his own?"
Davey: "We didn't tell Lance Malone what to do or not to do."
Ex-club manager spices up courtroom
By Kelly Thornton, Union Tribune, Union Tribune, June 5, 2005
After listening to hours of secret recordings in the City Hall corruption trial, the jury is getting to know many of the main characters long before they take the witness stand. Perhaps the most amusing of the lot is John D'Intino, the former Cheetahs manager whose blunt, crass, sarcastic and occasionally hilarious comments have provided relief in a sometimes tense federal courtroom – even as he sits in a jail cell across the street. Jurors, defense lawyers, prosecutors and spectators alike have joined in the laughter upon hearing D'Intino mispronounce names, spew profanities and blurt out mostly inaccurate political commentary.
D'Intino made a deal with the U.S. government just after he was indicted in August 2003 along with Cheetahs owner Michael Galardi, Las Vegas lobbyist Lance Malone and San Diego Councilmen Ralph Inzunza, Michael Zucchet and the late Charles Lewis. They were accused of trading money for efforts to repeal the city's no-touching law at strip clubs. D'Intino has been in jail since September 2003, awaiting his stint on the witness stand and then his sentencing and eventual release.
Galardi also pleaded guilty but has remained free on bail. D'Intino's lawyer, Geoffrey Morrison, said he could understand why his client's quirky, irreverent personality might create anticipation for his testimony among courtroom observers or even endear him to the jury, sight unseen. "John has a biting wit which is very funny.
He has the ability to key in on humorous aspects of people, and he does not hesitate to make fun of people," Morrison said. "But it's never meant in a hurtful fashion. It's just in the spirit of good fun." Morrison described D'Intino as a hard-working, successful and outspoken businessman. "People think he's funny despite the fact he made some poor choices. He is an honest person, and he's not afraid to say what he thinks."
D'Intino's deal allowed him to plead guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to receive and possess unregistered firearms with obliterated serial numbers. D'Intino admitted that he brokered the sale of 26 machine guns and pistols with silencers. Friends have said D'Intino began a career in the restaurant business in 1968, owning or cooking at restaurants such as the Village Town House in El Cajon, La Mesa and Ocean Beach; Sgt. Pepperoni's in Solana Beach; the Greens Cafe downtown; and D.Z. Akin's in the College Area. D'Intino, 58, was described by friends as a competent manager with a strong work ethic and a loyal friend who also can be stubborn, argumentative and eager to debate or pick a fight.
During one conversation, D'Intino told Malone he wanted Galardi to open a strip club in a foreign city like Paris. "I wish he would diversify out of this (expletive) country, where you've got all these (expletive) weirdos."
In recordings played last week, D'Intino called Councilman Brian Maienschein "Brian Madaffer," joining the names of Maienschein and Councilman Jim Madaffer. Before that, there was Councilwoman Donna "Fray" instead of Frye, and the now-well-known references to Inzunza as "Izuzu."
In another conversation, D'Intino disparaged his boss in an exchange that left the jury howling. Malone told D'Intino that Galardi's father, Jack Galardi, is mad because "he thinks I'm brainwashing Mike." D'Intino: "Well, that's an easy job. It only takes five seconds to do that . . . (expletive) brain that size. (Expletive) how much effort, how much effort you gotta . . . you don't have to use any soap." Malone told D'Intino that no one could brainwash Michael Galardi. D'Intino didn't let up. "Well, no, it's hard to find it to get it to wash."
The courtroom was in stitches. In another conversation, strippers who made campaign contributions and were reimbursed by Galardi complained about being contacted by Zucchet's campaign. D'Intino became annoyed with Malone for the invasion of privacy, calling him "wrinkle head" and "stupid Lance!" Again, laughter in the courtroom. In one conversation, Malone called D'Intino and referred to himself as "the man, the myth, the legend." D'Intino dryly replied, "Oh, it's Lance."
It's not clear how these jokes will affect the jury's impressions of D'Intino as a witness. "It's a serious case, and I know the humor is appreciated because it reduces the tension in the courtroom, but I don't know whether this guy is going to be taken seriously, and I guess that's going to be the challenge: to present him as a serious witness," said former San Diego U.S. Attorney Charles La Bella. "The jurors are going to have a preconceived notion about this guy, and is the reality going to live up to his introduction through the tapes?
Given what he was doing, was it even appropriate for him to be joking? I think the jury might think he's not taking this too seriously and this is a game for him."
Much will depend on D'Intino's demeanor, La Bella said. "Is he going to be irreverent and flip, or a guy who says, 'Look, I did wrong and I'm 'fessing up to what I did wrong?' " D'Intino isn't the only one showcasing his personality.
The jury is learning who the defendants are, what they are like and how they spend their time. Jurors have found that Inzunza and his wife had a new baby, and the councilman humored her by joining her for salsa-dancing lessons.
They learned that Inzunza's favorite dining spots are Hob Nob Hill, the Grant Grill, the Westgate Hotel and Chuey's. They've discovered that Malone repeatedly takes his kids to Disneyland and stops for fast food. The jury heard that Malone – whose young children are frequently heard in the background of his phone calls – doesn't really have an office.
And that he sat with his kids in the back seat of the family SUV watching a "Batman" DVD, talking on the phone to Michael Zucchet, while being chauffeured by his wife. After listening to hours of conversations between Inzunza and Malone, the jury has likely figured out that the two gravitated to each other because of their similar gregarious personalities.
They always greet one another enthusiastically – "Hey, babe." "How you doin', stud?" "Is this the great Lance Malone? This is your humble servant, Ralph Inzunza." Both always seem upbeat, happy-go-lucky. They are obviously extroverted, persistent, ambitious. Both rarely swear, in sharp contrast to others on the recordings. The jury has seen in surveillance pictures and videotapes that when meeting in person, Inzunza and Malone forgo handshakes and favor man-style hugs and back-patting. They joke and laugh and rib each other.
They always ask about each other's families. On the recordings, Malone seems ultrafriendly, even using the 411 operator's first name and never forgetting a "please" or "thank you." Outside court, Malone was gracious enough to repeat his exit so a television cameraman who had been distracted could have another chance to get it on tape. Inzunza apparently has a few favorite TV shows.
He told Malone Feb. 12, 2003: "You gotta watch 'The Bachelorette.' My wife loves those shows." Anna Inzunza, who was in the gallery, smiled bashfully and lowered her head while the courtroom laughed.
Galardi and Zucchet seemed more introverted on the recordings, and so far the jury has heard little about their personal lives.
In one conversation, Malone called Galardi from a City Council meeting and reported that people for and against a new downtown library were speaking. Galardi asked, "People are against libraries?" The jury laughed.
An FBI agent's testimony has shown that his agency had its own foibles during the case.
The FBI twice nearly filled the Westgate Hotel restaurant with agents, so Malone and Inzunza would be forced to sit at an unoccupied, bugged table. The first time, the two were seated at the wrong table anyway; the second time, Malone and Inzunza decided on a different restaurant. The third time, the FBI didn't even try.
CITY HALL TRIAL, Candidate asked club owner for $5,000, Lewis also heard requesting tickets
By Kelly Thornton, Union Tribune, June 3, 2005
The jury in the City Hall corruption trial heard dozens of recorded conversations yesterday, including one from May 28, 2002, in which Malone made a call to his boss, Galardi, in Lewis' presence. At the time, Lewis was running for City Council, and Galardi was interested in loosening San Diego's strip club regulations.
Before Galardi answered, as the phone was ringing, Malone coached Lewis: "You tell him, 'Mike, this is Charles. I need five G's.' "
Galardi answered: "Hey, Lance."
Malone: "I, I got a buddy that wants to talk to you. It's Charles Lewis."
Galardi: "Well, why do you want me to talk to him?"
Lewis: "Hey, Mike."
Galardi: "Hey, Charles?"
Lewis: "How ya doin'?"
Galardi: "How ya doing, sir?"
Lewis: "Ah, I'm doing good. Mr. Malone, Mr. Malone told me to tell you that I need to get five before the end of June 30th."
Galardi: "You got it. We can handle that for you."
Lewis: "OK, all right, that's what we ne--"
Galardi: "You can count on it."
Developments
According to secret recordings, Lance Malone got Charles Lewis complimentary tickets to Cirque du Soleil in Las Vegas.
When Lewis discovered someone else had already bought him tickets, he asked Malone for tickets to another show.
In spring 2002, when he was running for office, Lewis called Michael Galardi and said he needed $5,000 in a month's time, according to the tapes.
The late Charles Lewis directly solicited strip club owner Michael Galardi for $5,000 and asked Galardi's lobbyist, Lance Malone, for Las Vegas show tickets, according to recordings played in federal court yesterday. FBI agent Leonard Davey testified that Galardi later gave $3,000 to FBI spy Tony Montagna to convert into campaign checks for Lewis that couldn't be connected to the strip club industry.
Lewis and fellow San Diego Councilmen Ralph Inzunza and Michael Zucchet were indicted with Malone, Galardi and Cheetahs manager John D'Intino on charges that they traded money for efforts to repeal the no-touching rule at strip clubs. Lewis died in August. Galardi and D'Intino have pleaded guilty and are scheduled to testify against the councilmen and Malone at the trial, which began May 3.
In another call played for the jury yesterday, Lewis told Malone on Nov. 7, 2002, about a trip to Las Vegas that he and his wife were planning to unwind and celebrate his election victory.
Lewis: "You got any good, ah, shows out there?"
Malone: "I'll look at those three nights and see what shows I can put together for ya and see if I can't keep you busy on every night, and then you, you and your wife just pick out the shows you wanna go see and I'll take care of the rest."
Lewis: "All right, Lance."
Malone was able to offer Lewis two complimentary tickets to Cirque du Soleil's "O" at the Bellagio, but after Malone had called in a favor to make it happen, Lewis canceled at the last minute.
Lewis: "Hey, man, listen, is there a way that we can, uh, switch that around? I just got a call from, uh, the president at Evans Hotel down in San Diego, and they had, uh, as a congratulations (for winning the election) got me two tickets for 'O' for tomorrow."
Malone: "Oh, they got you 'O' for tomorrow?"
Lewis: "Yeah. ... If it's not no problem."
Malone: "My tickets are going to be better. ... Mine are comps, so, you know, I'm sure he paid for his. ... I'll, I'll, I'll, I'll cancel tonight, and I'll get you a Blue Man Group tonight."
Lewis: "All right."
Malone: "So, I'll call you right back."
Lewis: "OK, boss."
Malone hustled to buy Blue Man Group tickets for $179.90 with his own credit card, according to testimony.
In a recording of a March 2, 2002, conversation played yesterday, Malone told D'Intino that their plan to cater to Inzunza's requests for financial support for Zucchet, who was then running for the council, was about to pay off. Zucchet was untainted by strip-club-linked campaign contributions because he returned a batch of checks, Malone said, so he could be the one to raise the no-touch issue without fear of being connected to Galardi.
Malone: " 'Cause Ralph knows, he owes me. I mean, we've been every time for him when he needs somethin', but what's nice is, you know, I'm hoping that the guy wins because now no red flags are up, and he could, he's the one that could put the item back on the agenda. Zucchet."
A couple of weeks later, in a March 20, 2002, conversation, Malone gave Galardi a progress report on their efforts to get the councilmen elected and involved with the plan to repeal the no-touch rule.
Malone: "Uh, he, uh, but he (Inzunza) really, really wants to wait until, um, uh, Zucchet is in office. He goes, 'With Zucchet in office, then I know I can count on his vote, 'cause he'll do anything, anything I ask him to do.' "
According to Malone, Inzunza said that to get the no-touch rule repealed, they would have to figure out a few other issues that would tighten restrictions on the industry, to distract from the no-touching matter and make the whole package more palatable for the politicians.
Inzunza then suggested getting police involved. Malone told Galardi: "He goes, 'Listen, if you, if you have any contacts with the police, give them my name and number. Have them get ahold of me and we'll work together on this."
A couple of months later, Malone instructed Inzunza on what to say to vice detective Russ Bristol, a cop pretending to be on the take and being paid by Galardi for tips about upcoming vice inspections. Galardi also wanted Bristol to appear before the council and tell it that enforcing the no-touching rule is a waste of time, so that the politicians would feel comfortable voting to repeal it.
Malone and the councilmen have said they did not know Bristol was pretending to be corrupt. Malone told Inzunza to ask Bristol if there was anything that could be done to improve the adult-entertainment ordinance.
Malone: "As a councilman, you're just curious as how the ordinance is working?"
Inzunza: "Right. And we'll throw in four or five things that sort of slaps you guys on the hand, and then we'll allow touching."
Malone: "That's right."
Inzunza later adds: "OK. And if anyone, for any reason if this gets out to the media, I'm gonna tell 'em I wanted to make the ordinance tougher."
Malone: "Exactly."
Malone tried to arrange a phone call between Inzunza and Bristol. I nzunza aborted the plan at the last minute, asking that Malone first send him and other council members e-mail messages so he could use them as an excuse for looking into the adult-entertainment issues. He has no clubs in his district.
"But don't just send 'em to me!" Inzunza said to Malone on July 31, 2002. Malone assured Inzunza that the e-mail had been sent to the entire council, and that he already had received some responses.
When the phone call between Inzunza and Bristol eventually did happen, after the e-mail messages had been distributed, Inzunza followed Malone's instructions on what to say.
A few months later, on Oct. 14, 2002, Inzunza recruited Malone once again to help Zucchet and invited him to an Oct. 30 fundraiser at Busalacchi's restaurant in Hillcrest, just before the November council election.
Inzunza: "Hey, well, let me tell you what I'm doing. I'm giving you a reason to come out here."
Malone: "OK, good."
Inzunza: "Um, it's the final push for our boy Zucchet."
Malone: "OK."
When Malone asked how much he needed, Inzunza said, "We need probably about $3,000," insisting that the checks be from San Diego sources and not from Las Vegas or strip club associates. Malone promised the money to Inzunza, and then with the assistance of Montagna, prepared San Diego checks in that amount.
Then later, in a conversation between Malone and Zucchet on Feb. 18, 2003, after Zucchet and Lewis had been elected, Malone asked, "Is it a possibility that you can help this move along?" Zucchet replied, "Absolutely." Zucchet said he would pave the way for docketing the adult-entertainment matters with John Rivera, the consultant for the council committee that handles such issues.
CITY HALL TRIAL, Tapes show that lobbyist had coached ruse players 3 councilmen appear knowledgeable of plan
By Kelly Thornton, Union Tribune, June 4, 2005
An elated Lance Malone called strip club owner Michael Galardi to report a lobbying success that was a long time coming: After years of schmoozing politicians, tens of thousands of dollars in campaign donations and countless phone calls, meetings and fundraisers, Malone had managed to get councilmen to act on the city's adult entertainment law.
"It went perfect!" he told Galardi on tapes played in the San Diego City Hall corruption trial yesterday.
Developments
All three councilmen know in advance that lobbyist Lance Malone has recruited someone to appear before a council committee and bring up the strip club issue, according to recordings.
The recordings capture Malone coaching Tom Waddell, who appears before the committee.
Waddell, employed in a Galardi club in Las Vegas, appears to know little about why he was asked to go before the San Diego committee. Malone made the call just 30 minutes after Tom Waddell, a Galardi strip club employee in Las Vegas, posed as a "concerned citizen" from San Diego, gave a false address and asked members of a City Council committee to consider tightening restrictions on adult entertainment clubs.
The proposed crackdown was a ruse meant to distract from the real goal: abolishing the law banning touching between strippers and patrons, a rule that had cut into club revenue.
Malone told Galardi that Councilmen Michael Zucchet and Charles Lewis, committee members they'd been courting since before their 2002 elections, came through for them. After Waddell made his comments, Zucchet urged that the matter be referred to the City Attorney's Office, and it was.
Malone, Zucchet and Councilman Ralph Inzunza were indicted with Galardi and Cheetahs manager John D'Intino on charges that they traded money for efforts to repeal the no-touching rule. Lewis, who also was charged, died in August and was removed from the indictment. Galardi and D'Intino have pleaded guilty.
Malone goes on: "Tom (Waddell) did a great job, and Zucchet jumped right up there and said, hey, you know, I mean, Zucchet was cool because he was trying to bypass the attorney and just get it right on the next meeting, you know. .. .. . And then, uh, Lewis was like, 'Hey, didn't we do this before? Maybe we have it done already. We can just move on it a little faster.' So, I mean, dude, it, it was real good. .. .. . I'm real pleased, and they all gave me .. .. . this little wink like, you know. .. .. . Yeah, Zucchet and, uh, Lewis both."
Galardi: "Awesome."
In the days before that April 30, 2003, meeting of the Public Safety and Neighborhood Services committee, Waddell apparently had been carefully coached by Malone, as had committee members Zucchet and Lewis.
It appears from recordings that all three councilmen knew in advance that Malone had recruited someone who would appear before the committee and ask that the distance between adult businesses and schools, churches and other adult clubs be expanded. The recordings seem to show the councilmen also knew that the distance issue was just a ruse to ultimately sneak the no-touch matter on the agenda.
But in recordings played so far, none of the councilmen was informed that the man would be a Galardi employee from Las Vegas.
Malone told Zucchet: "We'll come up with a San Diego resident. I can find somebody in your district."
During the same conversation April 16, 2003, at a breakfast meeting at the Grant Grill, Malone started preparing Zucchet for the committee meeting.
In coaching Waddell, Malone said: "My guys are expecting you, so you'll just go up there and say, 'Hey, my name's Tom Waddell.'. " Malone told him to give a fake address, one provided by FBI informant Tony Montagna.
Sounding confused, Waddell said: "OK. Now I'm sure, I'm sure that there's a rhyme for this reason."
Malone: "Ah, absolutely. There's always a rhyme for a reason. But the less you know, the better you are."
Waddell: "Yeah. Thank you very much."
Malone: "It's called plausible deniability, baby."
Minutes later, Malone left Inzunza a message informing him of the plan: "Ah, just to let you know that, ah, Mike called me on Fri, on Friday and, ah, it appears that we're just gonna go for it all. I've got, ah, a friend that, ah, lives in San Diego that's willing to step up there, ah, on, on Wednesday at 2 o'clock for the public safety meeting and he's just basically gonna discuss, um, ah, you know, how he'd like the expansion for distance requirement."
In a conversation April 24, 2003, Malone told Lewis his plan for the committee meeting. "And then, you know, one of you guys could say .. .. . 'Yeah that's a great idea, let's look into it.' And then maybe you could say, 'Yeah, you know, that's not a bad idea, either,' so that, you know, you get people moving on it so that there's more than one councilman wanting to do the same issue."
Malone told Lewis he would look like he is cracking down on strip clubs. Lewis: "Right. No, I don't have no problem with it."
Earlier in the court session, Assistant U.S. Attorney Paul Cook played conversations showing Malone's relentless efforts to prevent Zucchet from meeting with San Diego vice Lt. Bob Kanaski on March 21, 2003, a little more than a month before the public safety committee meeting.
Malone had been trying to arrange for Zucchet to speak only to vice Detective Russ Bristol. But Zucchet had said he needed to know how the police felt about the no-touching rule, and he bypassed Bristol.
Galardi was paying Bristol – who was pretending to be on the take – for advance notice of vice inspections at Cheetahs. And Galardi wanted Bristol to appear before the council and say the police think enforcing the no-touching law is a waste of time.
Although he was Bristol's supervisor, Kanaski was unaware that Bristol was working undercover for the FBI. That was a secret known only to the highest-ranking members of the Police Department, an FBI agent testified yesterday. After Zucchet ignored Malone and Bristol and made his own appointment with Kanaski, Malone asked Inzunza and Lewis to persuade Zucchet to cancel.
Kanaski eventually was brought into the loop out of necessity, said FBI agent Leonard Davey, on the stand for the fourth day of questioning by Cook. Kanaski was told to tell Zucchet the truth: No-touch works. Police like it.
Davey said Bristol learned about the Zucchet-Kanaski meeting by glimpsing it on a schedule a few days before it was to take place. Bristol informed the FBI, and the FBI told its informant, Montagna, to pass along the information to Malone and Galardi.
"We wanted to see how Lance Malone and Michael Galardi were going to react that Michael Zucchet was going to be meeting with a lieutenant as opposed to their guy that was getting paid off," Davey said.
During a conversation March 20, 2003, Malone told Inzunza he didn't want Zucchet to mention any names to Kanaski, or to mention the no-touching issue. Doing so could get Bristol in trouble, he said.
Inzunza repeatedly questioned Malone about why he needed the meeting to be canceled, and why the officer would get in trouble. He never got a straight answer from Malone.
After the meeting took place, Malone was unable to reach Zucchet to find out what happened. He learned from Lewis during an April 9, 2003, call that Zucchet was no longer keen on the plan because he was told by Kanaski that police liked the no-touching law.
Malone then explained away Kanaski's point of view: "Yeah, that, that's just their official stance. But you know me, I never do everything official. .. .. . But, see, I, I had somebody on the inside that worked there that would've been willing to step up and say, 'Hey, you know, it's no problem.' And, and the, you know, of course the Police Department wouldn't have said anything. But you guys wouldn't have known any better."
Malone then told Lewis if Zucchet didn't come through he might need more help from Lewis.
Lewis: "I can't put it on 'cause then they already gonna be looking at me going, like, 'Wait a minute; why is he putting this up? This doesn't have anything to do with his district; this goes back to him and Lance.'"
Apparently, Malone persuaded Zucchet not to worry much about Kanaski's views.
When discussing plans for that April 30 council committee meeting, Zucchet asked Malone during the April 16, 2003, breakfast meeting: "Lieutenant Kanaski won't be there?" Malone: "He will not be there, nor will he care about it."
Zucchet: "The cops have to leave the door wide open, and that's certainly not what Kanaski did." Ultimately, Zucchet took the action that Malone wanted by asking that the adult entertainment matter be referred to the city attorney.
CITY HALL TRIAL, Political tactics at heart of case
By Kelly Thornton, Union Tribune, May 22, 2005
Meeting with lobbyists. Secretly devising legislative strategies. Organizing e-mail campaigns. Recruiting citizens to appear at government meetings. Sneaking issues onto an agenda. Raising one issue to divert attention from a controversial one.
Some of these tactics might be perceived as sleazy or deceptive by many voters, who are mostly unaware of behind-the-scenes political jockeying. But they are routinely and deliberately used by campaign consultants, lobbyists and politicians, experts said.
They are also the same actions cited by prosecutors in the City Hall corruption case as evidence that Councilmen Ralph Inzunza, Michael Zucchet and Charles Lewis sold their integrity to a strip club owner in violation of federal laws.
Defense attorneys have said this is a case of politics as usual – the councilmen and Las Vegas lobbyist Lance Malone were merely doing their jobs, working together on legislation they all favored, employing methods that are used regularly by public officials.
That's true – to a certain point.
"It's absolutely legal and proper to demonstrate to an elected official that a majority of his or her constituents support your side of the issue," said John Dadian, a longtime San Diego lobbyist who also has worked as a staff member for politicians. "It would be absolutely improper for anyone to misrepresent themselves as a constituent."
The legislation at issue is the city's law forbidding touching between strippers and club patrons. Prosecutors say the strip club owner, Michael Galardi, hired Malone to lobby to get the law repealed; Malone used money to persuade the councilmen to do it. Galardi and his Cheetahs club manager, John D'Intino, have pleaded guilty and are scheduled to testify at the trial, which began May 3 and is expected to continue until July.
So the case comes down to this: Do the actions of the defendants constitute a crime, or politics as usual? And where is the line separating the two? Were the councilmen aware they were the center of a bribery plot? Did they know the e-mails were bogus – written by Malone – and that a man who appeared at a meeting to ask for changes in the city's strip club laws was a Galardi employee who didn't live in San Diego?
A jury of mostly retirees, some of whom expressed disgust with the ongoing chaos at City Hall during jury selection, will make the call.
The government contends there were key deceptions that crossed the line into extortion and wire fraud, depriving citizens of their right to honest services.
Prosecutors say: The councilmen knowingly accepted "laundered" campaign contributions. The scheme was designed to disguise the money's source and protect the candidates from any stigma associated with the adult entertainment industry. And, laundering the money enabled Galardi to exceed limits on campaign contributions.
Inzunza asked Malone to create e-mails from residents and send them to him and fellow councilmen to drum up imaginary public interest in adult entertainment laws so he could point to them as a reason for looking into the laws. He then cited the e-mails, never mentioning he was the instigator, when calling a vice detective to discuss changing the adult entertainment ordinance.
The councilmen and Malone arranged for a concerned citizen to appear before the City Council's public safety committee, asking that the politicians increase the required distances between strip clubs and schools, churches and other clubs. Turned out the citizen gave a bogus address and was an employee of one of Galardi's Las Vegas strip clubs.
The distance requirement was intended to be a distraction for other council members and the news media. The real plan was to sneak the no-touching matter onto the agenda, along with the distance issue
Malone, the lobbyist, helped launder the campaign contributions, composed the bogus e-mails and recruited the Las Vegas strip club employee. And, the government contends he was aware that Galardi was bribing undercover vice Detective Russ Bristol, whom he thought was on the take, for advance warning of police inspections at Cheetahs, and that he was considering paying Bristol $50,000 to tell the councilmen that police considered the no-touch rule a waste of their time.
Organizing e-mail campaigns and recruiting constituents to get involved are routinely used by political insiders, several lobbyists said.
"The problem is when people show up at committee meetings and council meetings and give fictitious names and addresses," said a longtime San Diego lobbyist who asked not to be identified to preserve relationships with Inzunza, Zucchet and their supporters. "That is where you really cross the line. I think that's a problem for them."
The defense has said the councilmen were not aware that the e-mails and the constituent were not legitimate.
"The question then becomes, what did you know and when did you know it," said Jeff Marston, a former state assemblyman and congressional staffer who is now a registered lobbyist. "In a vacuum, both of these tactics are very typical. They are almost required."
Marston said that when he was an elected official, he made similar requests of lobbyists. "It goes like this: 'OK, that's a very interesting idea. I understand what you're trying to do. I tend to agree with you. However, I also know I'm going to take a lot of heat for this in my district. What I could really use is for a bunch of people to express those views to me, and allow me to say I've received 42 phone calls and 67 e-mails.' "
But, he said, "They've got to be legitimate. You've got to be able to trace it."
Sneaking items onto agendas is nothing new, lobbyists said.
"In a vacuum there are strategies that elected officials and legislators come up with all the time as far as what will sell and what won't," Marston said.
The actions of Inzunza and Zucchet seem odd in some respects, said the lobbyist who asked to remain anonymous. For instance, they apparently knew a constituent was coming to raise an issue at a committee, and they didn't inform the committee chairman or consultant.
"Oftentimes when you come on a communication you alert people. Very rarely would someone just show up on a serious matter without checking with someone in the system," the lobbyist said. "That again is going to be a problem for the defense."
Defense attorneys for Inzunza and Zucchet contended in their trial memo, which outlines how they believe the law applies to their case, that the government is prosecuting them simply for failing to disclose their political strategies and actions.
"Every politician engages in political advocacy. It is his or her job. Our system is designed to encourage discussion speech and strategy related to a particular bill or policy," the memo said.
"Political speech can cover a range of issues from urging passage of a change to a municipal ordinance to taking our country to war. If the party in power has the right to indict a politician . . . because it believes it can prove his speech was not fully candid, that will bestow a power upon the government specifically denied it under the First Amendment."
During cross-examination of the FBI's paid informant last week, Inzunza's attorney, Michael Pancer, tried to drive the point home for the jury: "Did you have an understanding that e-mails and letters are used to influence politicians?" The question was never answered.
The defense has included some political experts on its witness list, such as Robert Fellmeth, a public interest lawyer and ethics expert at the University of San Diego School of Law, and former City Manager Jack McGrory, presumably to explain the political process to the jury and testify that the tactics employed by the councilmen are common.
The government appears to have no such experts on its list.
In their trial memo, prosecutors said most of the facts of the case – "what was said and done" – will be uncontested by the defense. "The critical fact which will be contested, however, and which will be decided by the jury, is whether the defendants acted with the requisite intent to defraud."
Inzunza, Zucchet and Malone are charged with wire fraud, conspiracy to commit wire fraud and extortion under the Hobbs Act. Wire fraud is planning to deprive citizens of their right to honest services, and using a wire communication, such as a telephone, to carry out the plan. Extortion is using one's official position to obtain something of value. If the property in question was in the form of campaign contributions, the government must prove quid pro quo.
"Here, the issue is whether the politician defendants obtained money in exchange for the exercise of official power," the government's memo said. "The evidence will show a specific understanding between defendants Malone and Inzunza on a quid pro quo."
The defense misunderstands the law, prosecutors wrote. "Defendants continue to misconstrue this crime as requiring proof of a payment linked to a specific official action. That is incorrect. As the case law makes clear, the focus of honest services fraud is on the fraudulent and deceptive conduct of the public official who abuses a position of trust, not on the two-party exchange paradigm of bribery."
Whatever the verdict, the public is getting an unprecedented insider's glimpse of the political process.
"These kinds of things right out of the gate look sleazy and they might not be sleazy at all," Marston said. "How else are you going find out what people care about? If you didn't call me, write me, send me an e-mail, how am I supposed to know what you feel? But people don't look at it that way."
CITY HALL TRIAL, Councilmen portrayed as deceivers, deceived
By Kelly Thornton, Union Tribune, May 11, 2005
Two San Diego city councilmen sold their integrity to a strip club owner for a few thousand dollars, devising an elaborate scheme to hide their efforts to abolish a no-touching law at nude and topless cabarets, a prosecutor told a jury yesterday.
During opening statements of the City Hall corruption trial, Assistant U.S. Attorney Paul Cook detailed his theory of how the councilmen concealed their alleged plan, but he offered no bombshells. He didn't specify for the jury the amount of money given to the councilmen, and though he used the term "bribery," he described only campaign contributions in relation to the councilmen, not cash bribes.
"This is a case about the corruption of the political process through bribery, undue influence and deceit," Cook said.
Defense attorneys told the jury a much different version of the story: That Councilmen Ralph Inzunza and Michael Zucchet were oblivious to the bribery plot aimed at them, and that they were merely doing their jobs as lawmakers by meeting with Las Vegas lobbyist Lance Malone.
Council members are constantly lobbied – even by U.S. Attorney Carol Lam, who once asked council members to vote down a medical marijuana ordinance, said Michael Pancer, Inzunza's lawyer. "It's part of our free system of elections in this country," Pancer said.
Both sides staked out their positions yesterday in opening statements of the federal trial in which Inzunza and Zucchet are charged with wire fraud, conspiracy to commit wire fraud and extortion. Malone is charged with those crimes plus interstate travel in aid of racketeering. Council aide David Cowan is charged with making a false statement to a government agency.
Strip club owner Michael Galardi, who was Malone's boss, and Cheetahs manager John D'Intino have pleaded guilty and are cooperating with the government. The councilmen and Malone have pleaded not guilty and say any money received was in the form of legitimate campaign contributions.
The courtroom in downtown San Diego was packed with reporters, lawyers, family members of the defendants and other observers. The defendants were mostly impassive throughout the five-hour session. Some members of the jury took notes, and none displayed any obvious reaction to either side.
The councilmen, their attorneys said, are socially liberal and had no problem meeting with lobbyist Malone or considering his issues.
Zucchet's real objective in listening to Malone was to get rid of Les Girls, the Body Shop, and the Adult Superstore – adult entertainment venues that he considers eyesores at the Point Loma entryway to his district, said his lawyer, Jerry Coughlan. Neon signs scream "Nude!" to passers-by, and Zucchet wanted them out, "not for moral reasons but for aesthetic, neighborhood and redevelopment reasons."
"He'd be willing to listen to them about no-touch if they talk about Mr. Galardi actually buying (the clubs) and turning them into Krispy Kreme (doughnut shop) or a sports bar," Coughlan said.
The councilmen pursued Malone's goal only because the lobbyist and the FBI's informant, Tony Montagna, tricked them into believing the police supported the repeal of the no-touch rule, Pancer said. The councilmen were told that police felt time was better spent on the streets than in strip clubs, and they agreed with that position.
"Ralph Inzunza assumed that what Lance Malone was telling him was true. If that were true, he was going to be willing to look into whether or not no-touch should be changed," Pancer said. "All he told Lance Malone is that he was sympathetic to the industry's issues and he felt if the police didn't have such strict laws to enforce (in the clubs), they'd be out enforcing other laws."
Cook, the prosecutor, warned the jury that some material would be "R-rated." He said the city's law forbidding touching between strip club dancers and patrons, enacted in 2000, was cutting significantly into profits at clubs.
So Galardi and his employees keenly wanted to return to the old standard, in which police vice officers had to decide what constituted "lewd and lascivious" behavior on the part of dancers. That standard, Cook said, was hard to define and enforce.
Galardi hired Malone to make it happen. The FBI informant heard about the bribery scheme, and the 21⁄2 -year corruption investigation was launched, Cook said.
Galardi's plan involved a short-term solution: bribing a San Diego police officer, Russ Bristol, whom they believed to be corrupt, for warning of vice inspections at Cheetahs. The long-term plan: Paying public officials to change the law.
The councilmen accepted thousands of dollars from Galardi, Malone and D'Intino in the form of campaign contributions. Many of the checks were from Cheetahs employees, and Galardi had reimbursed them to bypass donation limits, which is illegal, Cook said. Zucchet returned some of the money after The San Diego Union-Tribune disclosed that Galardi and Las Vegas associates had donated to Inzunza.
After that, the councilmen told Malone he would have to disguise the money, Cook said. Malone made sure the sources of future checks were local and could not be traced to the adult entertainment industry.
Once in office, according to the prosecutors' theory, the conspirators decided to create imaginary public interest in adult entertainment matters through bogus e-mails sent to the entire City Council by Malone and Montagna.
And they began to formulate a plan to get the item onto the agenda of the City Council's Public Safety and Neighborhood Services committee, of which Zucchet was a member.
They decided to bring in a person to pose as a "concerned citizen," who would ask for tighter restrictions on adult entertainment as a diversion, when the real objective was to sneak the no-touch matter onto the agenda.
Zucchet arranged a meeting with Lt. Bob Kanaski, head of the vice unit, on March 21, 2003, and Kanaski told Zucchet that the Police Department supported the no-touching law and did not want it changed.
A month later, Tom Waddell, who claimed to live in Zucchet's district, asked the Public Safety and Neighborhood Services committee to consider tighter zoning restrictions on strip clubs. Zucchet said he also was interested in strengthening these regulations and asked that the matter be referred to the City Attorney's Office, which it was.
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It turned out that Waddell was a Las Vegas resident, employed by one of Galardi's Las Vegas strip clubs, and his public request was a ruse to get the no-touch matter onto the City Council agenda, according to prosecutors. The issue never came up for a vote. The offices of the councilmen were searched by the FBI May 14, 2003.
The defense gave the jury a different story.
The councilmen accepted what they believed were legal campaign contributions. They believed that Bristol's support for repealing the no-touch law – conveyed by Malone and Montagna – was legitimate. The councilmen had no inkling that Bristol, Malone's police contact, was being bribed. And they did not know the e-mails were manufactured by Malone and Montagna, Pancer said.
"Ralph Inzunza gets e-mails from people who want to save the seals, and people who don't. From people who wanted to build a ballpark, and people who didn't. How is Ralph Inzunza responsible for an e-mail campaign the government orchestrated?"
Pancer urged the jury to listen to Inzunza's voice on the secret recordings, not the interpretation of his words by Malone to others. Malone was under pressure from Galardi to get results and had been unable to deliver.
"That's why you will hear Lance Malone say progress is being made when progress is not being made" with the councilmen, Pancer said.
Inzunza didn't try to hide the fact that he wanted to revisit the no-touching law before the Public Safety and Neighborhood Services committee, Pancer said.
"The evidence is going to show Ralph Inzunza honestly believed it would be better for this city if no-touch was looked into," Pancer said. "It would be beneficial to have more police officers on the streets. This falls under the umbrella of proper, ethical and expected legislative advocacy."
The government manufactured the case through its informant, Tony Montagna, whose rap sheet includes drug and weapons charges, check fraud and soliciting people to commit arson for him, Pancer said.
"The most corrupt thing you're going to hear about is what Anthony 'He's Not a Saint' Montagna did in order to convince (the councilmen) that the San Diego Police Department wanted the no-touch law to be repealed."
Opening statements resume today, beginning with Coughlan, Zucchet's lawyer, who did not finish yesterday. Coughlan will be followed by Dominic Gentile, who represents Malone, and Michael Crowley, who represents Cowan.
A city under scrutiny, San Diego corruption trial likely to present an unflattering picture of the business of politics
By Kelly Thornton, Union Tribune, May 1, 2005
The FBI's case began in 1999 at Cheetahs strip club out of concern the mob was infiltrating the local adult entertainment industry. It grew into a federal corruption investigation involving two cities, six defendants and an estimated 100,000 wiretap intercepts.
The highly anticipated corruption trial of two San Diego city councilmen is scheduled to begin Tuesday with much more at stake than the freedom and careers of young politicians.
The reputation of the city and the future of its Democratic-majority council will be on the line. The trial could bring a backlash against politicians in general, revealing their behind-the-scenes behavior and giving constituents an unprecedented peek at their elected officials beyond images and slogans.
"To a certain extent, the system is on trial," said Geoffrey C. Morrison, a lawyer for cooperating defendant John D'Intino. "What's going to end up happening is it will cause people to step back and look at how we do business in this town."
The outcome of the corruption case – involving an estimated 100,000 wiretap intercepts, two cities, 12 lawyers, six defendants and five years of investigation and trial preparation – is likely to have strong implications for a parallel corruption case in Las Vegas, scheduled for trial in January, and perhaps for other federal investigations of city finances under way at San Diego City Hall.
Trial to begin Tuesday
The trial of City Councilmen Ralph Inzunza and Michael Zucchet and Las Vegas-based consultant Lance Malone on corruption charges is scheduled to begin Tuesday and is expected to last three months.
The trial comes as the city tries to cope with federal investigations of its pension fund, which has a $1.4 billion deficit. It is expected to prove a rare, unfiltered look at City Hall politics in San Diego. And the credibility of U.S. Attorney Carol Lam, who has made combating corruption a priority of her administration and has aggressively pursued cases against prominent public officials, could rest on the outcome of the case.
"It's going to be a long, hot summer," said Glen Sparrow, professor emeritus of public administration and urban studies at San Diego State University. "The city is in horrible turmoil anyway.
"San Diego is going to become national news. And the second paragraph of every story is going to say, 'And besides this, they've lost their credit rating, they can't borrow money, they're on the verge of bankruptcy.' I don't think Geraldo is going to be here, but it has that potential if the Michael Jackson trial winds down." Two years after City Hall was stunned by a bevy of FBI agents searching the offices of Councilmen Ralph Inzunza, Michael Zucchet and Charles Lewis, San Diego government will be distracted again as scores of city officials and staffers prepare to take the witness stand. The trial is expected to last three months.
"We all know it's on May 3," said a City Hall staffer who asked not to be identified for fear of being labeled a traitor and ostracized by co-workers. "We realize in the next couple months the calculus could change around here dramatically. If the U.S. attorney doesn't gain convictions, will this hurt her ability to issue indictments on other things she's investigating? And what if they are convicted? It puts us in a quandary."
The FBI case that began in 1999 at Cheetahs strip club out of concern that the mob was infiltrating the local adult entertainment industry morphed into a corruption investigation that federal officials never imagined.
Finally, after a high-profile three-month grand jury investigation, indictments and litigation of about 80 pretrial motions, some of the city's most prominent lawyers are set to square off in federal court.
The prosecution will argue that Inzunza, Zucchet and Lewis knowingly accepted, and in some cases solicited, money from strip club owner Michael Galardi, through his bagman, Lance Malone, in a scheme to repeal the no-touching law at his Kearny Mesa club. The rule, which prohibits physical contact between dancers and patrons, has cut into profits at local clubs since it was adopted in 2000.
Prosecutors will present evidence that the politicians made efforts to repay $70,000 worth of favors by sneaking the issue onto the City Council's agenda – a matter that should not have concerned them because Galardi's club is in Councilwoman Donna Frye's district.
The defense is likely to argue that the case involves nothing more than politicians going about their business, that the councilmen did what they would do for anyone who asked them to work on legislation they support. The defense will argue Galardi may have thought he was buying votes but that the councilmen were not aware of his criminal motives, nor were they taking money in exchange for political action.
"The defense will be that there was no scheme to defraud or to do anything illegal," former San Diego U.S. Attorney Charles La Bella said. "Rather, it was merely accepting campaign funds from people who they believed were legitimate contributors. Meeting with people who are significant contributors is what happens and is at the heart of campaign contributions. It's how the system works."
"The government's hurdle is going to be to get over that, that the political process by definition includes this sort of conduct," La Bella said. "The government will try to say this conduct went above and beyond what is acceptable political process."
Inzunza, Zucchet and Lewis were indicted by a federal grand jury Aug. 28, 2003, along with Galardi, Cheetahs manager John D'Intino and Malone, Galardi's Las Vegas-based consultant. Lewis' aide, David Cowan, is charged with making a false statement to the FBI.
Lewis, 37, died Aug. 8 of internal bleeding related to cirrhosis of the liver. His name has been stricken from the indictment, which is routine when a defendant dies before trial.
Galardi and D'Intino have pleaded guilty and are expected to testify against the others as part of their deal with the government. Malone and the councilmen have pleaded not guilty and say any money received was legally reported as campaign contributions.
If convicted, the councilmen and Malone could face three to four years in prison, according to calculations based on federal sentencing guidelines. Because of a recent Supreme Court decision that made those guidelines advisory rather than mandatory, sentences are difficult to predict. The terms would be at the discretion of the judge, who would consider the guidelines as well as recommendations from the prosecution and defense.
The San Diego City Council has been shaken five times before by criminal indictments, but there is no record of any San Diego official spending a day behind bars for crimes committed at City Hall.
If the councilmen are convicted of felonies, state law requires they relinquish their offices when the judge formally accepts the verdict. This usually happens about the time of sentencing, which can be months after a verdict. They cannot remain in office while an appeal is pending.
In the event of a conviction, it is unlikely that Inzunza and Zucchet would be taken into custody immediately. By attending all required court appearances, they've demonstrated they are not flight risks. Most defendants convicted of white-collar crimes are allowed to remain free pending appeal.
Should the councilmen be removed from office, the city would have to hold a special election within 90 days to replace them.
The trial is certain to be a major distraction for City Hall, because the mayor, five City Council members and many staffers are on the government's witness list and will probably take part in the trial.
"Starting May 3, the community focus is going to be on this trial," City Attorney Michael Aguirre said. "As a practical matter it will be difficult to perform much business at City Hall."
The trial schedule is structured so that the councilmen will be able to attend as many council meetings as possible. The trial will run Tuesdays through Fridays from 8 a.m. to 1 p.m.
The council meets Mondays at 2 p.m., and Tuesdays in closed session at 9 a.m. and in regular meetings at 10 a.m. and 2 p.m. Zucchet will miss meetings of the Rules, Finance and Intergovernmental Relations Committee, which are held Wednesday mornings. Inzunza's committees meet after the scheduled court times.
Zucchet and Inzunza probably will miss only the morning meeting on Tuesdays. A council member can be removed from office for eight consecutive unexcused absences, according to the city charter. Typically, council members ask colleagues to officially excuse absences when important conflicts arise.
Former Councilman Jess Haro was an exception. He lost his seat in 1978 while serving a three-month jail term for misdemeanor customs law violations. His council colleagues refused to excuse his absences and he was ousted for missing too many meetings – not for the crime.
The charges
The councilmen and Malone are charged with wire fraud, wire fraud conspiracy and extortion under the Hobbs Act. Malone also is charged with interstate travel in aid of racketeering.
To prove a wire fraud violation, the government must show the defendants planned to deprive citizens of their right to honest services and acted with intent to do so and that the defendants used or caused someone else to use a wire communication – such as a telephone – to carry out the plan, according to a book of standard jury instructions published by the 9th Circuit Court of Appeals.
To prove Hobbs Act extortion, the government must prove the defendants knowingly obtained property to which they were not entitled by using their official positions. And, if the property in question was in the form of campaign contributions, the government must prove quid pro quo.
The Latin term quid pro quo means "something for something," or in legal terms, getting something of value in return for giving something of value.
Accepting a campaign contribution from someone who has business pending before the public official is not extortion unless the official demands or accepts the contribution in exchange for a specific, requested exercise of official power, according to jury instructions.
To show quid pro quo, prosecutors need not demonstrate that officials followed through, but merely that they agreed to do so. In the case of the councilmen, a vote on the no-touch ordinance never took place. The government has said efforts were being made to get it on the agenda of a City Council committee.
The councilmen are not charged with bribery, but the case has sparked much discussion about the difference between bribery and extortion and why the government did not charge bribery in this case.
Extortion is obtaining something one is not entitled to because of official position. Bribery is promising to do something in exchange for a thing of value.
"Bribery by definition is much more difficult to prove," said La Bella, the former U.S. attorney in San Diego. "It has elements that are different. Quid pro quo is part of any bribery scheme. You are going to have to show that I gave you money for this particular result."
Political fallout
The city's political landscape could change dramatically if the councilmen are forced from office, creating an opportunity for conservatives, some experts said.
Zucchet and Inzunza are "in that 'progressive wing' of the City Council, so there's going to be a re-look at the living wage, needle exchange, all of those things those five people have cobbled together in that coalition," said Sparrow, the SDSU professor emeritus, referring to the voting bloc that includes the defendants and Toni Atkins, Donna Frye and Tony Young.
"It could be a battle for the heart and soul of the city if the interests on the right see this as an opportunity to pick up two seats and change the nature of that council, especially a council going into a strong mayor situation," Sparrow said.
Equally uncertain is whether the two politicians' careers could survive even with not-guilty verdicts. The trial is likely to expose the unseemly side of politics and perhaps paint unflattering portraits of the councilmen.
Inzunza's second term on the council expires in 2006. He was expected to run for state Assembly. Zucchet is eligible to run for re-election in 2006.
In five previous City Hall-related indictments, a total of five elected officials were convicted and six were exonerated. Just one official returned to public life.
The largest and most explosive case was the Yellow Cab bribery scandal of 1970. It cut short the careers of Mayor Frank Curran and a number of council co-defendants, all but one of whom would be exonerated. Curran was cleared by a jury, but he could not recover politically from the allegation that he raised taxi rates in exchange for campaign payoffs.
Even if Inzunza and Zucchet are exonerated, there could be a reaction against politicians in general after the public hears evidence from the wiretaps.
"It's just going to expand their biases and prejudices against public officials," Sparrow said. "At this point in time, the City Council, the whole regime, is not held in high esteem. Add three months of washing the dirty laundry of two council members before the voters, it's going to be cynicism run amok and everyone's going to get splashed with this."
Lawyers for the councilmen have said they will decide during trial whether the councilmen will testify. Some legal experts said it may not be advisable, but it is probably politically necessary because constituents will expect to hear the councilmen's explanations.
Lam's reputation
In addition to the corruption case, the Securities and Exchange Commission, the FBI and the Justice Department have been investigating city finances for more than a year. U.S. attorney Lam, a low-profile but tough former Superior Court judge, has had to summon city leaders to her office to scold them about the slow pace of the city's investigation into its finances and its lack of cooperation with federal investigators, including the alleged failure to turn over subpoenaed documents on demand.
"I think it's positive PR for her, and it creates the impression that she is a watchdog and is looking out for the interests of the people of San Diego in a way that no other official in San Diego was able to do," a lawyer familiar with the corruption investigation said.
Lam has managed to stay above the political squabbles that have erupted in city government.
"She has really differentiated herself, through no achievement of her own. She stands out among all of law enforcement and the high-profile, political-type officials in San Diego as the one person who is kind of above it all," the lawyer said. "If she wins a conviction in this case, it bodes ill for the people who are targets, subjects or suspects in the pension investigation. If she wins, it will embolden her to continue in this kind of gladiator role."
"If she loses, 'gladiator' becomes an inappropriate characterization and 'gadfly' or 'Don Quixote' becomes more appropriate," said the lawyer, who asked not to be identified for fear of retribution from the government. "For people who are targets in the pension investigation, if they're intelligent, they're hoping for an acquittal in the Cheetahs investigation that will sour the feds from meddling in state and city politics."
Statistics are on Lam's side. The Justice Department reported an 88 percent conviction rate in the 23,246 public corruption cases it tried from 1993 to 2002, the most recent figures available.
'Clear bright line' elusive
Legal and political observers said that once the evidence is presented, the public will be able to make its own judgment.
"This is not such a clear bright line until we see the evidence," La Bella said. "The question mark in most people's mind is how is it different than me giving money to someone who's going to advocate my particular position even if my particular position is a tax break for white guys with salt-and-pepper hair who live at my address? There's nothing wrong with that."
Aguirre said: "The people of San Diego are going to have a chance to understand how the people's business has been conducted. The defense has been that this is typical of how business is done in San Diego. This is really going to be one of the most revealing episodes we've ever gone through as a community."
If the trial triggers a larger debate about the line between what's appropriate campaign fundraising and what's unacceptable or even criminal, there could be a positive result from the proceedings.
"If I could fix one thing in the U.S. political system, it would be to do something about money," Sparrow said. "I think that is the most dangerous thing going on in our political system, from the top on down. If we looked at this thing honestly, it's the money. And let's
Zucchet target of recall bid by property owner Councilman said to degrade city
By Jennifer Vigil, Union Tribune, April 8, 2005
A property owner angered by a redevelopment proposal in the Midway District said he will try to recall San Diego Councilman Michael Zucchet, who is facing a May trial on federal corruption charges. Christopher P. Clifford, a Washington state high school teacher who owns shares in a family trust that holds a Hancock Street parcel, said his belief that Zucchet supports the redevelopment idea is not his sole motivation for trying to oust the councilman, who is up for re-election next year. Clifford, 44, cited the federal indictment accusing Zucchet of accepting money and favors from a strip-club owner and his associates to repeal the city's no-touch law at adult establishments – charges the councilman has denied.
He also mentioned Zucchet's vote against keeping the Mount Soledad cross at its current site and his support of Kourosh Hangafarin's appointment to the Port Commission. Hangafarin resigned from the commission over questions raised about an unauthorized trade agreement he made with a Cuban-owned company. "Every day he's in office, the city gets degraded by his presence," Clifford said of Zucchet. Zucchet dismissed Clifford's effort as a "political stunt" by an out-of-state resident. Clifford made his announcement in front of an adult business, Les Girls, in the Midway District. The property is one of those, like Clifford's, that may be affected by a proposed 124-unit residential development in an area bounded by Hancock, Riley, Kurtz and Sherman streets. Clifford's property houses an auto-repair business.
Zucchet, in a prepared statement, repeated his support for changing the Midway area, which he called blighted. Adult businesses there, he said, "fail to properly portray the history and family-friendliness of the surrounding neighborhoods." A published notice of intent to target an officeholder is required to start a recall. Petitions can begin to circulate three weeks after the notice is published, and organizers have two months to gather signatures. Clifford has yet to start the process. To succeed, he would have to collect signatures from 15 percent of the registered voters in the 2nd District, or 16,401 signatures, according to the City Clerk's Office. The election would cost more than $300,000, officials estimated. The two most recent recall efforts in San Diego, against Councilman Scott Peters and former Councilman Byron Wear, failed.
Strippergate Scandal' Stirs Up City Hall, Councilmen Accused Of Taking Bribes
UPDATED: 7:07 pm PST Feb. 11, 2005
SAN DIEGO -- Federal prosecutors released more evidence Friday that they say proves two San Diego City Council members accepted bribes from a local strip club owner.
It's the scandal that shook San Diego City Hall. For the first time ever, federal agents raided the office of San Diego city officials.
"Public corruption does exist in the city of San Diego," said FBI Agent Dan Dzwilewski in May 2003.
Three councilmen -- Ralph Inzunza, Michael Zucchet and the late Charles Lewis -- were charged with taking bribes worth more than $70,000 for votes to allow alcohol in San Diego's nude strip clubs.
"All of the money that I received was campaign money -- I repeat, campaign money. There have been no bribes," said Inzunza in August of 2003.
"The United States Attorney's Office has failed to provide me with any evidence -- not one piece of evidence -- to support any allegations of any crime," Zucchet said in August of 2003.
Zucchet and Inzunza have said little since the initial charges were brought almost two years ago. Charges against Lewis were dropped after he passed away last year.
Much of the evidence against the councilmen was allegedly collected through what one defense attorney described as more than 100,000 illegal wiretap intercepts.
"In these tapes, you will clearly see that there has been no political corruption here in San Diego," said the defense attorney.
Four weeks ago, the defense asked to drop the bribery charges for lack of evidence.
But late Friday, prosecutors filed a response. In it are transcripts from conversations that Inzunza and Zucchet allegedly had with strip club owner Michael Gilardi's associate, Lance Malone.
Some of the excerpts from the governments response reveal what the U.S.Attorney's Office feel are reasons for continuing the case against the two councilman. Below are some of the excerpts.
Excerpt 1:
Malone: "Cause now we have (Lewis), we have Ralph Inzunza, and then Zucchet."
Galardi: "We hope we do, (laughs)."
Excerpt 2:
Malone: "I'm sure Mr. Lewis is gonna be wanting some more cashola."
Galardi: "What's the total I've given the guy?"
Malone: "$10,000."
Malone: "Then we helped out Mike Zucchet."
One exchange between the men was how Inzunza could raise the issue on the no-touch ordiance in committee hearings. They suggested creating phony e-mail requests from Inzunza constituents.
Malone: "Ralph now can say, 'Hey, I've been getting a couple of e-mails about, you know, adult use ordinances.'"
A federal judge will hear arguments on the bribery charges early next month.
1st subpoenas served in S.D. City Hall case
By Kelly Thornton, Union Tribune, March 24, 2005
FBI agents have delivered the first subpoenas in the upcoming San Diego City Hall corruption trial to a former City Hall staffer and associates of strip club owner Michael Galardi, with dozens more subpoenas on the way to City Council offices in weeks to come.
At the same time, defense attorneys for indicted councilmen Ralph Inzunza and Michael Zucchet handed out a few surprises, too: They've taken the unusual step of sending subpoenas to other defense attorneys involved in the case.
The attorneys for the councilmen requested testimony and notes from lawyers for Galardi and his employee, John D'Intino, who have pleaded guilty and are cooperating with the government. The defense is trying to discover whether prosecutors made any backroom deals.
Inzunza, Zucchet and the late Councilman Charles Lewis were indicted by a federal grand jury in August 2003 on charges they accepted money from Galardi and his employees, Lance Malone and D'Intino, in a scheme to abolish a law prohibiting touching between dancers and patrons in San Diego strip clubs.
The FBI began serving the subpoenas late last week. The documents require the recipient to appear at federal court on the first day of trial, scheduled for May 3, recipients said. But the subpoenas ask the recipients to contact prosecutors to find out their testimony dates.
Jennifer Bates Navarra, press secretary to former Councilman George Stevens when Lewis was Stevens' chief of staff, said she was served Monday at the offices of her employer, state Assemblywoman Shirley Horton, R-Chula Vista.
Another recipient, a grand jury witness, said he was served at his office last week. "I was told by the FBI they were handing out a bunch of subpoenas that day." The witness spoke on the condition that his name not be used because association with the case would be detrimental to his business.
Prosecutors are required to file a witness list with the court by April 1. Although they declined to discuss witnesses and subpoenas yesterday, a variety of sources, commenting on how the government will present its case, have said the list will likely include Galardi, D'Intino and FBI spy Tony Montagna, an informant who posed as a friend and was hired as Galardi's security chief.
Montagna wore a hidden device known as a body wire to record hours of conversations, and he is likely to spend many days on the stand. The FBI's agents in the case, Leonard Davey and Henry Nembach, will likely testify.
San Diego police Detective Russ Bristol and his former boss, then-vice unit Lt. Bob Kanaski, are expected to be called by the government. Bristol pretended to be a corrupt cop, warning of upcoming vice inspections at Cheetahs all-nude club in Kearny Mesa in exchange for cash bribes. The government says part of his role was to act as a paid liaison between Galardi and the councilmen.
The indictment indicates that Kanaski will testify about his meeting with Zucchet on March 21, 2003, during which he told the councilman that the Police Department supports the no-touching law and did not want it changed.
A month later, on April 30, adult entertainment issues were raised by a member of the public at a meeting of the Public Safety and Neighborhood Services committee. Zucchet is a committee member, as was Lewis.
Tom Waddell, who claimed to live in Zucchet's district, asked the committee to consider tighter zoning restrictions on strip clubs. Zucchet said he also was interested in strengthening these regulations and asked that the matter be referred to the City Attorney's Office, which it was.
It turned out Waddell was a Las Vegas resident, employed by one of Galardi's Las Vegas strip clubs, and his public request was a ruse to get the matter on the City Council agenda, according to prosecutors. The issue never came up for a vote. Waddell is likely to be on the government's witness list.
Prosecutors are likely to spend at least a day questioning Cheetahs employees and associates who contributed to council campaigns and were reimbursed by Galardi.
The prosecutors will call many City Hall staff members, probably focusing on efforts by Inzunza, Zucchet and their staffs to place adult entertainment issues on the committee's agenda.
Other likely subpoena recipients: Councilman Brian Maienschein, then the chairman of the committee in question; Councilman Jim Madaffer, who testified before the grand jury; and Councilwoman Toni Atkins, who was subpoenaed to the grand jury but did not testify. Both Madaffer and Atkins had received campaign donations from Galardi sources.
"Do I expect a subpoena? Perhaps," said Ezekiel Cortez, lawyer for Atkins. "They might subpoena everyone just to be safe, not because there might be some specific issue they need her on." Cortez declined to say whether Atkins has met recently with prosecutors.
Maienschein said: "I don't know for sure whether I'm going to be called to testify or not."
Councilwoman Donna Frye is also likely to be called because the three indicted council members were conducting business regarding Cheetahs, which is in her district. Mayor Dick Murphy may also be called to testify about his knowledge of the efforts to repeal the no-touch law. And Councilman Tony Young, an aide to Lewis until the 37-year-old's death, was a grand jury witness and will surely be a trial witness.
It is also highly likely that the government will call witnesses from Las Vegas, particularly Erin Kenny, the former Clark County commissioner who has pleaded guilty to taking bribes from Galardi, through Malone, in the parallel case in that city.
Kenny has admitted that she voted in Galardi's favor on matters related to his strip clubs in exchange for thousands of dollars in bribes, and prosecutors will try to show a jury the same thing was going on in San Diego.
Defense attorneys said they will decide later whether their clients will testify.
The delivery of subpoenas by defense attorneys for Inzunza and Zucchet to defense attorneys Bob Rose, representing Galardi, and Geoffrey Morrison, representing D'Intino, is a curious development in the case.
Inzunza's attorney, Michael Pancer, and Zucchet's attorney, Jerry Coughlan, are seeking notes taken by Rose and Morrison during plea-bargain discussions. The subpoena requires them to deliver notes at federal court on the first day of trial of all sessions in which Galardi and D'Intino offered information to prosecutors in exchange for a deal.
Though some legal experts said the subpoenas of lawyers's notes is unusual, Pancer characterized the move as routine.
"We are not seeking the opinion of the attorney. We are just seeking what their client said to the agent, and what the agent said to the client. We want notes of the conversations, not the attorneys' impressions. And not the conversations between the attorney and his client."
Legal experts said the defense is probably theorizing that Galardi and D'Intino were coerced by prosecutors to change or embellish their testimony to receive a better deal. The defense is hoping the notes will reflect that.
Neither Rose nor Morrison would discuss whether they have the notes being sought, or whether their notes would help or hurt the councilmen. Prosecutors declined to comment.
"I assume what they're looking for is any and all information that was exchanged during the cooperation process that might suggest there were threats or promises designed to influence my client's testimony," Morrison said.
Rose said he had not decided how to respond, while Morrison said he planned to fight the subpoena. That means there will be a hearing scheduled on the issue sometime before trial.
"If the court grants the defense attorneys' request, I am forced to choose between taking notes so that I can defend my client, and refusing to take notes so that the sanctity of my relationship with my client is not compromised," Morrison said. "For that reason, on principled grounds, I am objecting."
The legal issue to be decided by U.S. District Judge Jeffrey T. Miller is essentially whether the "work-product doctrine," which protects from discovery documents that reflect the strategies and impressions of counsel, trumps the defendants' right to access information that may or may not show their innocence.
"It's definitely quite a rare thing, and I would be very surprised if they actually obtained those documents," said University of San Diego law professor Shaun Martin. "Attorneys' notes are very protected, and the reason . . . is because we don't want to discourage attorneys from writing things down.
"The only time you can obtain notes is with an exceptional showing of need, and I just don't see that sort of showing being made here."
However, the work-product privilege is not absolute. The defense would have to show a compelling reason why the court should order the attorneys to turn over their notes, experts said.
"It comes down to a balancing by the judge," said former San Diego U.S. Attorney Charles LaBella. "The judge is going to balance the need for it, and the defense will have to specify with some particularity why they need attorneys notes."
Tapes shed more light on City Hall corruption case
Efforts toward eliminating strip club statute detailed
By Kelly Thornton, UNION-TRIBUNE, February 20, 2005
Until recently, the public was privy only to snippets of conversations secretly recorded by the government over 30 months of the San Diego City Hall corruption investigation.
But prosecutors for the first time disclosed 111 pages of dialogue in order to rebut 19 pretrial motions filed by attorneys for Councilmen Michael Zucchet and Ralph Inzunza and Las Vegas political consultant Lance Malone.
With about 10 weeks until the trial is scheduled to begin, the prosecution has served up a preview of what's to come: lots of profanity-laced exchanges between strip club owner Michael Galardi and his employees about their elaborate efforts to sidestep and ultimately abolish a no-touching law in the clubs by using a cop they believed was corrupt and, eventually, the councilmen.
Their speech is peppered with enough fragmented sentences and slang (dude!) to make a grammarian wince. But what's most intriguing about the transcripts is that they give outsiders a rare glimpse into the culture of the adult entertainment world, the unsavory side of politics and what happens when the two collide.
"So I got Charles, I got Ralph Inzunza, and I, I'm hoping that this Mike Zucchet will pull it through," Malone said during a February 2002 conversation with FBI mole Tony Montagna on their plan to get votes for their cause.
A month later, Galardi referred to Zucchet's opponent in the 2002 City Council election, if Zucchet were to lose: "Who's the guy he's running off of? We could bribe . . . we could bribe him too."
Inzunza, Zucchet and the late Councilman Charles Lewis were indicted by a federal grand jury Aug. 28, 2003, on charges that they schemed with Galardi, club manager John D'Intino and Galardi's consultant, Malone, to try to repeal the no-touching law at strip clubs in exchange for money and favors.
Galardi and D'Intino have pleaded guilty and are cooperating with the government. The councilmen and Malone have pleaded not guilty. The councilmen have said any money they received was properly reported as campaign contributions.
"I'm sure Mr. Lewis is gonna be wanting some more cashola," Malone said to Galardi and Montagna, who used a hidden device known as a body wire to record the conversation April 4, 2002.
Galardi's reply: "(Expletive). Ask him why."
Malone: "What's that?"
Galardi: Ask him why. Why should I? Didn't we just give him some more?"
Malone: "No."
Galardi: "What's the total I've given the guy? I thought we just gave him some."
Malone: "Charles we've given $10,000. . . . Now we have Charles, we have Ralph Inzunza, and then Zucchet."
Galardi: "We hope we do, heh-heh-heh."
Malone then bragged about his relationship with Inzunza: "Well, I'll tell you, dude, I mean, Ralph is right there. 'Lance, what do you want me to do? What is it that you guys need me to do? I'll do it. I got no problem. If you people just give me a little help . . . help me out, I'll do the rest.' "
Galardi: "Well, we'll take care of him forever, man."
Lewis' former attorney, Frank Ragen, said that when Lewis was running for office in 2001, Malone handed Lewis an envelope that Lewis believed was a campaign contribution. When Lewis later opened the envelope and found cash, he returned the money, Ragen said.
"It was explained to Malone that you can't give cash in California elections, which I think is contrary to the rule in Nevada," Ragen said. "That may have been why Malone was mistaken. . . . The government, I believe, knows that and is aware of that. There was nothing other than checks thereafter, properly reported."
The indictment indicates that on May 24, 2001, Galardi told D'Intino, "We've got $5,000 worth of checks for Lewis." The "cashola" comment took place a year later. Lewis' campaign finance reports do not reflect a cash gift that was received and then returned.
Michael Pancer, Inzunza's lawyer, said Malone's comments about Inzunza are nothing but the bravado of a man trying to impress his boss.
"Ralph Inzunza never said that," Pancer said. "It's not Ralph Inzunza speaking. What Ralph did say is all on tape. It will all come out. He never asked for nor received a bribe."
Jerry Coughlan, Zucchet's attorney, said the councilmen were unaware of Galardi's plot, and that taped conversations show Galardi and his employees were frustrated because the councilmen weren't cooperating.
"The council members stalled Galardi's proposed legislation, for which D'Intino and Montagna repeatedly labeled them 'idiots,' 'jerk-offs' and '(expletive)' and complained bitterly about them behind their backs," according to a defense motion that quotes from transcripts.
"I think it is clear that (Zucchet) was not somebody they felt they had control of," Coughlan said. "I think the overall record shows that these guys believed Zucchet was somebody they strongly believed they could not control and was not cooperating with them.
"The councilmen have done nothing wrong. Public officials have the right to accept campaign contributions as long as they're properly documented. What is it that happened here that is different than any other public official does when they deal with developers, environmentalists, the ACLU or any other group?"
A lawyer for Malone couldn't be reached for comment.
The councilmen aren't featured in any of the conversations released by the prosecution because their voices were recorded via wiretap. Wiretaps require a court order, and the resulting tapes and transcripts are sealed. However, the defense has received copies of all of the thousands of hours of conversations.
The prosecution has publicly revealed only those conversations that were recorded via body wire because one party to the conversation, in this case Montagna, consented to the recording, and because body wires don't require court authorization or sealing.
Prosecutors chose to include conversations that they believed specifically refuted particular defense motions. For instance, the defense contended that Malone was unaware of criminal activity around him.
As an example, the defense said the FBI knew but didn't disclose that Malone frequently was recorded saying that "nothing illegal" was transpiring between those interested in repealing the no-touching law and the City Council members.
The defense argued that those statements by Malone were improperly withheld from the judge who approved the wiretaps, and therefore the secret recordings should be inadmissible at the trial.
But the government said Malone was a knowing participant and gave what it said were examples – page after page of conversations to show that Malone was not only aware of but fully involved in the scheme to abolish the no-touching rule at strip clubs.
The transcripts, spanning nearly two years, show that Malone, Galardi and D'Intino discussed payments to a vice detective they believed to be corrupt in exchange for warnings of vice inspections so touching could continue. Meanwhile, they plotted to get their favorite councilmen elected.
The trio discussed whether the councilmen were on board for the goal. They talked about newspaper coverage of campaign contributions to the councilmen and how that may have affected their cause, and they talked about why Zucchet returned a bundle of campaign contributions to Malone.
They also discussed their suspicions that Zucchet, after returning the money, tipped off a Union-Tribune reporter that Lewis was accepting contributions from Galardi. Politicians generally try to avoid strip club money because of the stigma, and Lewis' opponents tried to take advantage by demanding that he return the money. Lewis refused, telling a reporter he would "take the devil's money any day in order to turn it around and put it to good use."
The theory among Galardi and his associates was that Zucchet "ratted us out" by tipping the reporter to help his friend – Lewis' opponent, Dwayne Crenshaw. Zucchet and Crenshaw worked together on former Councilwoman Valerie Stallings' staff.
During the conversation Aug. 7, 2001, Galardi said he believed this because "Charles Lewis saw him (Zucchet) and that same reporter together down at the uh, downtown somewhere."
Zucchet, however, wasn't the source of the information. Union-Tribune reporters routinely inspect financial disclosure statements filed by candidates for office.
Galardi continued to disparage Zucchet: "We gave the guy our money. He called Lance like 10 days later and said: 'Listen, I can't take this money now. It's just too much heat. I don't wanna take the chance, Lance.'
"That's fine. We understand that. Then the next couple of days and that story came in the paper. We think he did it, man."
Later in the same conversation, Galardi said: "We gotta . . . still see if this guy's (Zucchet) on our side. This guy said he's on our side, though. So we – I don't know why he would do that (tip the newspaper). I mean, he told Lance, 'I got no problem.'
"He's a young guy. He . . . goes into clubs, this and that. I don't know why he did that. I think he did it more to (expletive) Lewis, because his buddy's running against Charles Lewis."
D'Intino: "OK, well, see, politics, like Tony said, you can't trust any of these (expletive). They're all dirtbags."
Galardi: "Yeah, they're scum. So it's the truth – most politicians are guys who have nothing going for them. That's why they're politicians."
Coughlan said he wouldn't comment on "nonsense by these guys," adding, "They speculate about everything in the world."
The councilmen weren't told that Galardi was bribing San Diego vice Detective Russ Bristol, and they weren't on board with their other schemes, Coughlan said.
"It's unfair to draw an inference against people who weren't even participating in a conversation, when the government went out of its way to make sure they didn't know about this (bribery)," he said.
In fact, Coughlan said, Montagna told Malone in a conversation, "No, you tell them the situation with Russ and everything else and they're going to think, 'Who oh, get away.' "
The elements of the plan, according to the transcripts: Pay the corrupt cop to warn of vice inspections until the no-touch law can be overturned. Try to get adult entertainment matters on the City Council's agenda by pretending to tighten, rather than relax, adult entertainment laws and by creating bogus e-mail messages from constituents expressing interest in the subject.
Based on those messages, Inzunza could then pretend there was public interest, giving him an excuse to call the corrupt cop to inquire about the issue. The detective would then agree to tell Inzunza that police feel they would be wasting their time enforcing the no-touch law and would rather be doing more important things.
Inzunza and others could then use that position to justify a change in the law, the transcripts indicate.
During a conversation with FBI spy Montagna on Aug. 1, 2002, Malone said: "Ralph can now say, 'Hey, I've been getting a couple of e-mails about, you know, adult use ordinances.' Now he can call our guy (the cop) and say: 'Hey, do me a favor. I'm getting some e-mails here. Can you look into what these ordinances are and tell me what,' and then they can at least get the two together. So now they can start calling each other."
Montagna: "OK. OK. So what is this? This is just helping them?"
Malone: "No, this is just creating a paper trail.
Strippergate Scandal' Stirs Up City Hall, Councilmen Accused Of Taking Bribes
Feb. 11, 2005, UPDATED: 7:07 pm PST Feb. 11, 2005
SAN DIEGO -- Federal prosecutors released more evidence Friday that they say proves two San Diego City Council members accepted bribes from a local strip club owner.
It's the scandal that shook San Diego City Hall. For the first time ever, federal agents raided the office of San Diego city officials.
"Public corruption does exist in the city of San Diego," said FBI Agent Dan Dzwilewski in May 2003.
Three councilmen -- Ralph Inzunza, Michael Zucchet and the late Charles Lewis -- were charged with taking bribes worth more than $70,000 for votes to allow alcohol in San Diego's nude strip clubs.
"All of the money that I received was campaign money -- I repeat, campaign money. There have been no bribes," said Inzunza in August of 2003.
"The United States Attorney's Office has failed to provide me with any evidence -- not one piece of evidence -- to support any allegations of any crime," Zucchet said in August of 2003.
Zucchet and Inzunza have said little since the initial charges were brought almost two years ago. Charges against Lewis were dropped after he passed away last year.
Much of the evidence against the councilmen was allegedly collected through what one defense attorney described as more than 100,000 illegal wiretap intercepts.
"In these tapes, you will clearly see that there has been no political corruption here in San Diego," said the defense attorney.
Four weeks ago, the defense asked to drop the bribery charges for lack of evidence.
But late Friday, prosecutors filed a response. In it are transcripts from conversations that Inzunza and Zucchet allegedly had with strip club owner Michael Gilardi's associate, Lance Malone.
Some of the excerpts from the governments response reveal what the U.S.Attorney's Office feel are reasons for continuing the case against the two councilman. Below are some of the excerpts.
Excerpt 1:
Malone: "Cause now we have (Lewis), we have Ralph Inzunza, and then Zucchet."
Galardi: "We hope we do, (laughs)."
Excerpt 2:
Malone: "I'm sure Mr. Lewis is gonna be wanting some more cashola."
Galardi: "What's the total I've given the guy?"
Malone: "$10,000."
Malone: "Then we helped out Mike Zucchet."
One exchange between the men was how Inzunza could raise the issue on the no-touch ordiance in committee hearings. They suggested creating phony e-mail requests from Inzunza constituents.
Malone: "Ralph now can say, 'Hey, I've been getting a couple of e-mails about, you know, adult use ordinances.'"
A federal judge will hear arguments on the bribery charges early next month.
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