Shame on San Diego

SAN DIEGO - America's Finest City has seen brighter days. Amidst several felony indictments, a rash of city government resignations, and a looming $1.4 billion dollar pension deficit, felony convictions of two city council members were announced on Monday.

Councilmen Michael Zucchet and Ralph Inzunza were pronounced guilty in federal court. Inzunza was convicted of conspiracy, nine counts of wire fraud and three counts of extortion; Zucchet was found guilty of conspiracy, three counts of extortion and five counts of wire fraud. The court is scheduled to reconvene on November 9th for sentencing.

"I want to let everyone know that I believe I have done nothing wrong," said Inzunza. "I believe that what I did was all within the law, all within the political structure that we have here in San Diego, in California, and in the United States of America."

Also convicted of conspiracy, wire fraud and extortion was co-defendant Lance Malone, a Las Vegas lobbyist. A fourth co-defendant, San Diego City Council aid David Cowen, was found not guilty of making a false statement to an FBI agent. The guilty verdicts are the result of an eleven-week trial and FBI investigations that began as early as 2002.

"This investigation afforded the FBI a rare opportunity to look into some of the preliminary methods that were utilized in the corruption of political figures," said FBI Special Agent-in-Charge, Daniel Dzwilewski, at a press conference following Monday's verdicts. "The hand-in-hand association between organized crime and political corruption has been historically documented. We never anticipated that the spotlight in this investigation would turn to our political candidates and elected officials here in San Diego."

Monday's convictions follow charges handed down by a San Diego federal grand jury on August 28, 2003. A 39-count indictment specifying wire fraud and conspiracy to commit wire fraud named strip club owner Michael Galardi, club manager John D'Intino, Lance Malone, along with Councilmen Inzunza, Zucchet, and Charles Lewis, who died on August 8, 2004.

The grand jury indictment alleged that Galardi, D'Intino and Malone had engaged in a plot to abolish San Diego's law that prohibits physical contact between dancers and patrons at strip clubs, and had bribed the council members with illegal campaign contributions to achieve their objective in changing that law.

"Club management was observed collecting personal checks from dancers and those checks were endorsed to local political candidates," stated Agent Dzwilewski. "It was determined that each of the dancers making contributions was reimbursed by Michael Galardi."

"It was this illegal bundling of campaign contributions by Galardi that would ultimately assist the future councilman candidates in winning their elections," continued Dzwilewski.

Galardi Enterprises, a Las Vegas company, owned and operated Cheetah's adult club in San Diego. According to Agent Dzwilewski, suspicious activities inside the club included plain envelopes being passed by management to individuals believed to be inspectors or other public officials. Dzwilewski contended that the Galardi family was associated with factions of organized crime in other areas of the United States.

"In this investigation we had other crimes including distribution of drugs, prostitution, and sale of illegal weapons," he said. Members of the Hells Angels motorcycle clubs were employed as Cheetahs' bouncers, with outside deals involving drugs and prostitution being brokered, using the nightclub, Cheetahs, as a conduit."

"In April of 2002, twenty-five automatic and semi-automatic weapons equipped with silencers were sold out of and purchased from Cheetahs with government funds," reported Dzwilewski.

"When we ascertained in this investigation that Galardi Enterprises had infiltrated the San Diego City Council with a plan to help elect those candidates who would serve their needs in the future, our focus changed," continued Dzwilewski.

According to taped evidence and sworn testimony, the councilmen consciously accepted illegal campaign contributions. The idea was to disguise the money's source and protect the candidates from the shame of being associated with the adult-entertainment industry.

"They are in a system where they have to get money and they have to do it pretty crudely at times. That's the way the system works," said Councilman Zucchet's attorney, Jerry Coughlan.

San Diego City Attorney, Michael Aguirre, did not agree. "If this is business as usual in San Diego, then 'business as usual' in San Diego better stop."

"I've heard in the past that this is the way business is always done. This is not the way business is always done. It isn't and it shouldn't be," reiterated U.S. Attorney, Carol Lam, at Monday's press conference. Lam affirmed that San Diego citizens have the right to hold their public officials to a higher standard.

"This is an indication to San Diegans that there is a line to be drawn in politics and that line was demonstrated here," stated Lam. "It means that we can expect a lot from our public servants. I think that there are many dedicated, honest and honorable public servants who do their job with a great deal of integrity."

After Mayor Dick Murphy's resignation took effect last Friday, and Deputy Mayor Zucchet's suspension following Monday's conviction, the San Diego City Council appointed Councilwoman Toni Atkins as temporary mayor pro tem until a permanent mayor pro tem could be formally selected. The special mayoral election to replace Mayor Murphy will take place on July 26.

"It's discouraging and sad news for the city of San Diego, but as public servants, we want the residents of San Diego to know that we will continue to stay focused on the issues of the day facing our city," said Atkins. "Our agenda will not change because of today's verdict. My colleagues and I will continue to work together to provide the necessary calm and steady leadership needed to get us through this difficult time and to lead the city into the future."