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Looting Hawaiian Gardens
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| 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.
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| 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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2003 design by elbop for the Coalition for Justice in Hawaiian Gardens and Jerusalem
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