- The Washington Times - Tuesday, November 11, 2003

Federal investigators used the Patriot Act to seize the financial records of a Las Vegas strip club owner as part of a political corruption probe, an action critics of the law say violates its intent to catch financiers of terrorism.

“The attorney general didn’t tell Congress that he needed the Patriot Act to raid nudie bars,” said Laura Murphy, director of the Washington legislative office of the American Civil Liberties Union.

“He told Congress in no uncertain terms that the Patriot Act was needed to prevent another life-threatening catastrophe at the hands of terrorists,” she said.

The FBI last week used the act to obtain subpoenas from a federal judge to seize from two stockbrokers financial information about Michael Galardi, a strip club owner suspected of bribing elected officials. Mr. Galardi opposes a ban on physical contact between topless dancers and customers.

Justice Department spokesman Mark Corallo said he could not discuss the specifics of the case, but emphasized that a provision of the law applies to money laundering. He called the provision a time-saving mechanism that requires probable cause and a federal judge’s approval — a stricter standard than used by grand juries empowered to subpoena the information.

Section 314 of the Patriot Act allows financial institutions to “share” information on individuals and organizations “suspected of possible terrorist or money laundering activities” with law enforcement. No notification to the target is given and all liability is waived against the financial institution.

Neither Mr. Galardi nor his lobbyist, Lance Malone, have been indicted by the federal grand jury that subpoenaed the information as part of its investigation of corruption of public officials in southern Nevada.

Critics said law enforcement wanted the powers that the Patriot Act provides even before the September 11 terrorist attacks and predicted the act would be used for crimes other than terrorism and money laundering after its passage in 2001.

“The use of Patriot Act against a Sin City vice lord should give pause to anyone who says it has not been abused,” Miss Murphy said. “The Justice Department’s suggestion that lawmakers knew what they were getting into with the Patriot Act deserves a gold star in dishonesty.”

Mr. Corallo said the specific provision of law being used was not requested by the Justice Department or the administration, but by Sen. Paul S. Sarbanes, Maryland Democrat and then-chairman of the Senate Banking, Housing and Urban Affairs Committee.

David Keene, chairman of the American Conservative Union, said the Patriot Act lowered constitutional safeguards and that the spirit of the law was misused in the Las Vegas case.

“This is the way it is going to be used the majority of the time,” Mr. Keen said.

Historically, laws enacted to target specific criminal endeavors, such as the creation of the Racketeer Influenced and Corrupt Organizations Act (RICO) to target organized crime, have been utilized for prosecuting other crimes.

The National Organization for Women used RICO in 1986 in a lawsuit against Operation Rescue, a pro-life group, to prevent blockades of abortion clinics in Delaware and Wisconsin.

The case went all the way to the U.S. Supreme Court, which in a 1993 unanimous decision included the definition of “enterprise” as including a group of individuals, partnership, corporation, association or other legal entity. The court said the pro-life group “conspired to shut down abortion clinics through a pattern of racketeering activity.”

Federal prosecutors have brought more than 250 criminal charges under the Patriot Act, with more than 130 convictions or guilty pleas in cases also dealing with currency smugglers, drug dealers, con artists, and to seize money hidden overseas by bookies, the Associated Press reported.


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