By J.M. KALIL and STEVE TETREAULT, REVIEW JOURNAL
The investigation of strip club owner Michael Galardi and
numerous politicians appears to be the first time federal
authorities have used the Patriot Act in a public corruption
Government officials said Tuesday they knew of no other instances
in which federal agents investigating allegations such as
racketeering and bribery of politicians have employed the
"I don't know that it's been used in a public corruption
case before this," said Mark Corallo, a spokesman for
the Justice Department.
An attorney for one of the defendants in the Galardi case
said he researched the matter for hours Tuesday and came to
the same conclusion.
"I have discussed this with lawyers all over the country,
and if the government has done this before, then this is definitely
the first time it has come to light," said Las Vegas
attorney Dominic Gentile, who represents former Clark County
Commissioner Lance Malone, Galardi's lobbyist.
Two of Nevada's lawmakers blasted the FBI for employing the
act in the Galardi probe, saying the agency overstepped its
Sen. Harry Reid, D-Nev., said Congress intended the Patriot
Act to help federal authorities root out threats from terrorists
and spies after the Sept. 11, 2001, attacks.
"The law was intended for activities related to terrorism
and not to naked women," said Reid, who as minority whip
is the second most powerful Democrat in the Senate.
"Let me say, with Galardi and his whole gang, I don't
condone, appreciate or support all their nakedness. But having
said that, I haven't heard anyone say at any time he was involved
Rep. Shelley Berkley, D-Nev., said she was preparing an inquiry
to the FBI about its guidelines for using the Patriot Act
in cases that don't involve terrorism. The law makes it easy
for citizens' rights to be abused, she said.
"It was never my intention that the Patriot Act be used
for garden-variety crimes and investigations," Berkley
But Corallo insisted lawmakers were fully aware the Patriot
Act had far-reaching implications beyond fighting terrorism
when the legislation was adopted in October 2001.
"I think probably a lot of members (of Congress) were
only interested in the anti-terrorism measures," Corallo
said. "But when the Judiciary Committee sat down, both
Republicans and Democrats, they obviously discussed the applications,
that certain provisions could be used in regular criminal
Federal authorities confirmed Monday the FBI used the Patriot
Act to get financial information in its probe of Galardi and
his dealings with current and former politicians in Southern
"It was used appropriately by the FBI and was clearly
within the legal parameters of the statute," said Special
Agent Jim Stern of the Las Vegas field office of the FBI.
One source said two Las Vegas stockbrokers were faxed subpoenas
Oct. 28 asking for records for many of those identified as
either a target or subject of the investigation.
That list includes Galardi, owner of Jaguars and Cheetah's
topless clubs; Malone; former Commissioner Erin Kenny; County
Commission Chairwoman Mary Kincaid-Chauncey; former County
Commission Chairman Dario Herrera; and former Las Vegas City
Councilman Michael McDonald, defeated for re-election in June.
A second source confirmed that stockbrokers had been faxed
subpoenas asking for information on Galardi, Malone, Kenny,
Kincaid-Chauncey, Herrera, McDonald and at least one of the
former politicians' spouses.
That source said the subpoena appeared to be a search for
hidden proceeds that could be used as evidence of bribery.
A source also indicated that records on Las Vegas City Councilman
Michael Mack were sought.
Sources said the FBI sought the records under Section 314
of the act. That section allows federal investigators to obtain
information from any financial institution regarding the accounts
of people "engaged in or reasonably suspected, based
on credible evidence, of engaging in terrorist acts or money
Gentile, Malone's attorney, said he plans to mount a legal
challenge once he confirms the Patriot Act was used to investigate
his client. "My research today indicates that this is
the first time the government has used Section 314 in a purely
white-collar criminal investigation."
Attorney General John Ashcroft has touted the law as an effective
homeland security tool, but coalitions of civil libertarians
and conservatives concerned about a too-powerful federal government
have led criticism against it.
Corallo said federal law enforcement officials have no qualms
about using the act to pursue an array of criminal investigations
that have nothing to do with terrorism, such as child pornography,
drug trafficking and money laundering.
"I think most of the American people think the Patriot
Act is a good thing and it's not affecting their civil liberties
at all, and that the government should use any constitutional
and legal tools it can, whether it's going after garden-variety
criminals or terrorists."
But Gary Peck, executive director of the American Civil Liberties
Union of Nevada, expressed outrage at Corallo's suggestion
that lawmakers were largely aware the Patriot Act's provisions
would equip the FBI with new investigative tools beyond the
scope of terrorism investigations.
"Those comments are disingenuous at best and do little
to inspire confidence that the act won't be systematically
abused," Peck said.
Rep. Jim Gibbons, R-Nev., said it may be too soon to weigh
its application to a Nevada investigation that still is largely
under wraps. Prosecutors have announced no indictments.
Citing the ongoing investigation, Sen. John Ensign and Rep.
Jon Porter, both R-Nev., declined to be interviewed.
Porter was not in Congress when lawmakers approved the Patriot
Act, but the other four Nevada lawmakers voted as part of
large majorities in favor of the measure.
The Patriot Act will expire in 2005 unless Congress renews
it. "More activity like this is going to cause us to
take a close look at what was passed," Reid said of the
law being invoked in the Galardi probe.
Review-Journal writer Carri Geer Thevenot contributed to this
report. Stephens Washington Bureau chief Steve Tetreault reported
from Washington, D.C.