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Defense attorney, ACLU say inquiry outside the purview of USA Patriot Act
By J.M. KALIL REVIEW-JOURNAL
The FBI used the USA Patriot Act to obtain financial information about key figures in its ongoing political corruption probe centered on strip club magnate Michael Galardi, federal authorities confirmed Monday.
Investigators "used a section of the Patriot Act to get subpoenas for financial documents," said Special Agent Jim Stern, a spokesman for the Las Vegas field office of the FBI. "It was used appropriately by the FBI and was clearly within the legal parameters of the statute."
One source said two Las Vegas stockbrokers received faxed subpoenas on Oct. 28 asking for records for many of those who have been identified as either a target or subject of the investigation.
That list includes Galardi, the owner of Jaguars and Cheetah's topless clubs; his lobbyist, former Clark County Commissioner Lance Malone; former Commissioner Erin Kenny; County Commission Chairwoman Mary Kincaid-Chauncey; former County Commission Chairman Dario Herrera; and Las Vegas City Councilman Michael McDonald, who was 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 and at least one of the former politicians' spouses.
The second source said the subpoena appeared to be a search for hidden proceeds that could be used as evidence of bribery in the case.
A source also indicated that records on Las Vegas City Councilman Michael Mack were also sought. Reached Monday, Mack declined to comment on the matter.
The Patriot Act, passed in the aftermath of the Sept. 11, 2001, terrorist attacks, was originally trumpeted by the government as a powerful tool that would assist federal law enforcement officials in combating and preventing terrorism.
But the Bush administration has increasingly attracted criticism from civil libertarians for employing the wide-ranging act to crack down on everything from drug traffickers to child pornographers.
The provision used to obtain the information in the Galardi investigation is Section 314, sources said.
That section allows federal investigators to obtain information from any financial institution regarding the accounts of people suspected of being terrorists or laundering money.
Malone's attorney said it is an outrage that the FBI is using anti-terrorism measures in an effort to gather information on his client.
"The Patriot Act was designed and was sold to the American people as being necessary to combat terrorism. It clearly was not intended for this," Las Vegas attorney Dominic Gentile said. "I'm confident that the citizens of the United States are on my side on this one."
Civil libertarians agreed.
"We at the ACLU have said from the beginning that the Patriot Act included provisions that the government sought for years that in no way had anything to do with the threat of terrorism, but could help them in your more garden variety criminal prosecutions," said Gary Peck, executive director of the American Civil Liberties Union of Nevada.
Because use of the Patriot Act in nonterrorism related probes is controversial, local FBI investigators sought approval from the top echelons of the Justice Department before using it, one source confirmed.
That source said agents proceeded only after receiving express permission from FBI headquarters and the office of the U.S. Attorney in Washington, D.C.
Law enforcement agents seeking financial records typically seek subpoenas through the U.S. Attorney's office and must submit evidence such as a sworn affidavit that establishes probable cause of a crime.
The provisions of the Patriot Act require fewer elements of evidence to establish probable cause to obtain such records.
"They wouldn't do it unless that was the only way they could get the information," one source said.
Besides that lower threshold, a request made under the Patriot Act rather than a typical subpoena can yield a wider scope of documents.
Attorney Richard Wright, who represents both Mack and McDonald, said he was unaware investigators had used Patriot Act powers.
"It isn't anything that's lawfully known," he said.
Federal authorities in San Diego say Galardi and Malone paid San Diego city officials to lift a ban on contact between topless dancers and their customers. Malone and three San Diego city councilmen await trial on public corruption charges.
A federal grand jury in Las Vegas also has been hearing evidence regarding allegations of public corruption in Southern Nevada, but prosecutors have announced no indictment in that case.
However, two of the key figures who search warrants identified as targets of the case now appear to have already pleaded guilty and are cooperating with the investigation.
Kenny was named as a defendant in a sealed criminal case filed in federal court in July. She has told friends she is cooperating with federal officials.
The Review-Journal reported late last month that Galardi has pleaded guilty during secret proceedings before U.S. District Judge James Mahan, but exact charges remain unknown.
We all knew it would be used against anything and everything, its just leverage against any crime.