Looting Hawaiian Gardens
Report Alleges Spending on Card Club by City Illegal Hawaiian Gardens: State legislative panel says $4 million went illegally to help build casino. Club owner's lawyer says deal was legal.
by Hugo Martin, Times Staff Writer
Originally published 10 July 2000
in Los Angeles Times

The tiny city of Hawaiian Gardens illegally spent about $4 million in public funds to help its most influential businessman and landowner build a card club, according to a state report released last week.

The highly critical report by the chairman of the state's Joint Legislative Audit Committee accused casino owner Irving Moskowitz and the city's redevelopment agency of conspiring to violate a 1996 law that prohibits the use of redevelopment funds for gaming enterprises.

The study, released by Assemblyman Scott Wildman (D-Los Angeles), also accuses Moskowitz's attorney, Beryl Weiner, of violating conflict-of-interest laws by simultaneously representing the redevelopment agency and Moskowitz during construction of the Gateway redevelopment project, which includes the Hawaiian Gardens Casino.

"The history of the Gateway redevelopment project is rife with questionable practices on the part of the Redevelopment Agency and the city of Hawaiian Gardens," the audit said. "And in the course of the last two decades, through negligence and malfeasance, the agency and the city have violated state law."

Weiner vehemently denies allegations in the audit.

"It is replete with lies and misrepresentations," he said in an interview. "It is only worthy of one thing, and that is to be thrown in the garbage can."

Hawaiian Gardens Mayor Leonard Chaidez and City Atty. John Cavanaugh could not be reached for comment.

Wildman said he submitted the report to state Atty. Gen. Bill Lockyer last week, suggesting that Lockyer investigate the casino's financing and Weiner's role in the redevelopment project.

The report recommends that Lockyer help the city's redevelopment agency reclaim the money spent on the casino.

A spokesman for Lockyer said the attorney general is "looking at the report."

The report is the latest controversy involving Moskowitz in the poor, heavily Latino community of about 15,200 residents in southeast Los Angeles County.

Critics say Moskowitz, a retired physician who lives in Miami, has more influence over staff firings and policy decisions than the City Council.

Moskowitz, the city's largest landowner, has kept the city budget alive by funneling millions of dollars from his charitable foundation to Hawaiian Gardens' municipal funds, donations that at times amount to about half the city's estimated annual budget.

The doctor has decided periodically to stop his monthly payments of $200,000, plunging the city into chaos, at times prompting severe budget cuts.

The state's report focuses on the construction of the 22-acre Gateway project, which was the product of a partnership between the redevelopment agency and Moskowitz, who owned nearly half the project site.

The project was completed in 1997.

The city redevelopment agency spent more than $4 million to purchase land and pay for infrastructure improvements, such as sidewalks and sewer lines, according to Wildman staffers. The agency is expected to spend another $8 million to pay legal fees and lawsuit settlements resulting from the relocation of several businesses at the site, Wildman staffers said.

Legislation presented by then-Assemblyman Phil Isenberg (D-Sacramento) in 1996 made it illegal for cities to spend redevelopment funds on gaming businesses. The only exemption was for redevelopment agencies that had entered into agreements with gambling-related businesses before April 1, 1996, to operate casinos "in existence" before Jan. 1, 1997.

Moskowitz's attorney, Weiner, said the city and Moskowitz did not violate the law because they had reached an agreement to develop a casino as early as 1995, well before the Isenberg bill took effect.

But the Wildman report said Hawaiian Gardens and Moskowitz did not qualify for the exemption because Moskowitz did not operate a "gambling-related business" and did not have a casino in existence by Jan. 1, 1997. The casino opened in December 1997 with six tables in permanent tent structures at 11971 Carson St.

The report noted that the redevelopment agency is continuing to pay legal fees and lawsuit settlements involving the project.

In a Sept. 7, 1999, letter to Wildman, the state's legislative counsel, Bion Gregory, said any money spent by the redevelopment agency on the casino on or after Jan. 1, 1997, violated state law.

Weiner accused Wildman of launching the investigation at the behest of a local rabbi who is upset that Moskowitz plans to buy land for Jewish settlements in East Jerusalem. Critics claim those settlements could jeopardize peace efforts between Israel and Palestinians in the Mideast.

An Orthodox Jew, Moskowitz is allied with right-wing political interests in Israel and has financed previous Jewish settlements in East Jerusalem.

The rabbi, Haim Dov Beliak, concedes that he urged Wildman's office to investigate Moskowitz. But he said he is not waging a vendetta against Moskowitz.

"There is nothing personal about this at all," Beliak said. "This is a question of justice."

Weiner acknowledged that he and his law firm, Selvin & Weiner & Weinberger, represented both the redevelopment agency and Moskowitz but insisted that the agency signed a waiver to allow the firm to represent both parties.

Hawaiian Gardens' former city attorney, Julia Sylva, who resigned last year after questioning the city's role in the casino project, called the report impressive and substantial.

She said she supports the findings of the report.

"In my capacity as a former city attorney, it appears they violated the law," she said.

Copyright 2000, Los Angeles Times For education and discussion only. Not for commercial use.

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