Councilmen Zucchet, Inzunza Convicted on Corruption Charges

By Karen Kucher, Union-Tribune Breaking News Team

SAN DIEGO â€" Acting Mayor Michael Zucchet and Councilman Ralph Inzunza were convicted Monday on federal corruption charges, with a jury finding the politicians conspired with a strip club owner to ease restrictions on such clubs.

The two elected officials had contended they accepted only legitimate campaign contributions and were just doing their jobs. But jurors accepted the prosecution's case that the contributions and cash the councilmen accepted came in exchange for their promises to scale back the rules.

Inzunza was found guilty of nine counts of wire fraud, one count of conspiracy and three counts of extortion. Zucchet was convicted of one count of wire fraud conspiracy, five counts of wire fraud, and three counts of extortion.

Both are immediately suspended from the City Council and will have to resign when they are sentenced, City Attorney Michael Aguirre said.

A sentencing hearing is planned in early November, but the defense lawyers said they will appeal the convictions.

If the two councilmen either resign or are removed from the council, the city must hold a special election to fill those vacancies within 90 days, said Assistant City Clerk Joyce Lane.

The jury also convicted Las Vegas lobbyist Lance Malone, who was working for the strip club owner, of one count of wire fraud consiracy, 33 counts of wire fraud and three counts of extortion. He was found not guilty of other charges, including interstate travel in aid of racketeering.

City Council aide David Cowan was acquitted of making a false statement to the FBI.

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 and complicate the city's situation because Zucchet became acting mayor over the weekend with the resignation of Mayor Dick Murphy.

ReactionsZucchet's lawyer Jerry Coughlan, when asked how his client was taking the verdict, said, "His reaction is total sadness."

"I'm not exactly going to go out and buy horns and hats," quipped Malone's lawyer, Dominic Gentile.

In remarks to news crews gathered outside the courthouse after the verdicts, Inzunza thanked the judge, his lawyers, his supporters and his wife, then reiterated his claims of innocence.

"I want to let everyone know that I believe I have done nothing wrong. I believe that what I did was within the law," Inzunza said. " . . . I do believe that I am innocent and will continue to fight this. . . .

"I'm not going anywhere. I'm going to stay in San Diego. My wife and I are going to continue to raise our family here and I'll be back."

While Inzunza spoke, some people in the crowd screamed derogatory statements, calling him a crook, while others shouted words of support.

His lawyer, Michael Pancer, called Inzunza and Zucchet "people the city should be proud of."

Zucchet left the building by an alternate entrance and did not speak to reporters.

Prosecutors scheduled a 3:30 p.m. news conference to discuss the case.

DeliberationsJurors had had the case since 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.

Nicki 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."

Another juror, Mike 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."

OriginsThe corruption investigation, which involved an estimated 100,000 wiretap intercepts, grew out of an FBI case that began in 1999 at Cheetahs strip club out of concern that the mob was infiltrating the local adult entertainment industry.

The public learned about the investigation May 14, 2003, when authorities raided City Hall, three strip clubs in San Diego and Las Vegas owned by Michael Galardi, and club manager John D'Intino's La Jolla condominium.

The prosecution argued that Inzunza and Zucchet accepted $34,500 in campaign contributions and cash from Galardi â€" through his bagman, Malone â€" 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 councilmembers 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 allegedly gave the three councilmen $23,150 in campaign donations and $18,000 in cash.

Malone's boss, Galardi, and D'Intino pleaded guilty, and Galardi testified against the defendants.

Witnesses and wiretapsThe trial began May 3. About 40 witnesses testified, and about 200 clandestinely recorded conversations were played for the jury.

In his closing argument, Assistant U.S. Attorney John Rice told jurors that people who are engaged in bribery don't make a public announcement 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.

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 Montanga intervened to resurrect a case that otherwise would have fizzled.

Defense attorney Michael Crowley, who is representing council aide Cowan, said his client cooperated with the government during the investigation. Cowan was an aide to Councilman Charles Lewis, who had been a defendant in the case until his death in August. he 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.

Malone's attorney, 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.

Awaiting the outcomeAs the city waited to hear of the verdicts, more than 20 television camera 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 councilmembers exchanged hugs before going inside.

Zucchet has been the city's acting mayor since Friday, when Mayor Dick Murphy's resignation became effective.

Zucchet had asked City Attorney Michael Aguirre about what steps need to be taken to name a City Council member as an interim deputy to serve as mayor if Zucchet had to step down for any reason, including his conviction.

Aguirre responded that the council should pick a potential mayor pro tem Monday, but then came the announcement that the jury was coming back with a verdict.

A special election to choose Murphy's replacement is set for July 26. If no candidate wins more than 50 percent of the vote, a runoff will be held in conjunction with California's Nov 8. general election.

Staff writers Kelly Thornton, Debbi Farr Baker, Gregory Alan Gross and Kristen Green and SignOnSanDiego's Steve Perez contributed to this report.
Karen Kucher: (619) 293-1350;

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