Prosecution Rests in Trial of 2 Council Members

After four weeks, federal prosecutors rested their case Thursday against two City Council members accused of taking illegal campaign contributions from the owner of a strip club.

Most of the government’s evidence is tape recordings of Councilmen Michael Zucchet and Ralph Inzunza talking with Scott Malone, the club owner’s then-lobbyist, and an undercover FBI informant, a bodybuilder with a criminal record.

Before raiding the council members’ offices in April 2003, the FBI secretly recorded telephone calls and wired the informant, who was working at Cheetah’s All-Nude strip club.

In numerous recordings, council members are heard discussing with Malone the need for political contributions. But, as prosecutors had told jurors at the beginning of the trial, none of the recordings contains an explicit promise to change city law in exchange for contributions, which would be illegal.

Rather, the recordings show a relationship that was not, as one of the prosecutors said, “business as usual.”

In the most dramatic testimony, strip-club owner Michael Galardi testified that he gave $10,000 in cash to Malone to give to Zucchet, Inzunza and Councilman Charles Lewis for their personal use, which would be illegal. Prosecutors had not mentioned cash payments in their opening statements.

The charges involve only checks received as campaign contributions, all of which were disclosed on state-mandated forms. Testimony about cash brought cries of protest from defense lawyers.

Galardi has pleaded guilty to conspiracy, racketeering and wire fraud and, under a plea bargain with prosecutors in Las Vegas and San Diego, agreed to testify for the prosecution. He has not yet been sentenced.

Defense attorney Jerry Coughlan, representing Zucchet, noted that, when Galardi agreed to plead guilty, he was interviewed at length by the FBI and didn’t mention giving cash to Malone for the three politicians. Galardi said he occasionally has memory lapses.

“The $10,000 never happened, did it?” Coughlan asked.

“It happened,” Galardi said.

Galardi denied defense assertions that he was lying to get a lighter prison sentence: “I definitely paid out cash to politicians. I’ve never made any false statements.”

On one tape, Galardi is heard grumbling, “I spend more time on this ... than I do in running my club.”

On the recordings, the council members are heard talking to Malone about how to get the City Council to discuss the city’s no-touch rule, which requires nude dancers to stay six feet from patrons. Zucchet, on a different recording, says that, without support from the Police Department, the idea of changing the rule is dead.

The trial coincides with turmoil at City Hall, with the resignation of Mayor Dick Murphy, charges against six members of the city pension board and investigations of the city’s $2-billion pension deficit by the Securities and Exchange Commission and the U.S. attorney’s office.

U.S. District Judge Jeffrey Miller has arranged court sessions so Zucchet and Inzunza can attend council meetings.

Also on trial are Malone and an aide to Lewis. The councilman, indicted in 2003, died last year.

Times special correspondent Neal Putnam contributed to this story.