Article: Long Beach Press-Telegram, July 7, 2000

Coalition for Justice in Hawaiian Gardens and Jerusalem

Long Beach Press-Telegram
July 7, 2000

Casino May Be Funded Illegally

By Joe Segura
Staff Writer

Hawaiian Gardens - The Hawaiian Gardens Casino was apparently financed illegally with public redevelopment money and its owner should return $12 million to the city, according to a state review released Thursday.

The review, by the Joint Legislative Audio Committee, urges the city and its Redevelopment Agency to stop all pending business with the casino and calls on the state Attorney General to consider helping the city recover the money it spent supporting the casino's development over the past 17 years.

"A city that embarked on an economic revitalization effort almost 20 years ago has little to show for its efforts save for an inappropriate gaming establishment, approximately $12 million in expenditures of public funds, and financial dependence on the goodwill of one owner/developer who is operating an illegally-subsidized gaming operation," the review states.

"It's a real example of how redevelopment should not have been used," said Assemblyman Scott Wildman, chairman of the Joint Legislative Audit Committee, adding that a copy of the report has been turned over to state Attorney General Bill Lockyer.

Hawaiian Gardens City Administrator Anthony Lopez declined comment Thursday, saying he had not read the bulky report.

However, Beryl Weiner, attorney for casino owner Irving Moskowitz, disputed the report's conclusions, saying "The report is sheer garbage. It should be thrown into the trash."

The casino generates several million dollars annually in tax revenues for the tiny city, its largest single source, and city officials have been eager over the years to support the casino's growth.

Redevelopment money funded in part the casino's recent expansion; another expansion is awaiting a state license.

Among the varied financial deals, the city last fall agreed to borrow $4 million from Moskowitz to pay for improvements on and off the card club property at 11971 Carson St.

Weiner said the report has not yet been reviewed by the full Joint Legislative Audit Committee, adding it has not had an opportunity to decide whether it merits being released. And he said the preliminary report contains no surprises.

Weiner said the report was based on inaccurate and incomplete information. He added that the Los Angeles County Superior Court has issued a judgement - in a lawsuit filed by card club opponents - the no violations of law have occurred.

"The Attorney General has been bombarded with this stuff for the past two years," Weiner said. "None of it is new."

Among the nearly three dozen findings in the legislative probe:

-The Redevelopment project is an "inappropriate use" of redevelopment funds because "it appears to violate" state law.

According to the review, state law prohibits the use of public finds to be used, directly or indirectly, on any aspect in developing or improving a gambling club. One exception allows for a contract to be entered into if the project existed by January 1, 1997. The casino opened in December 1997 with a six-table poker operation. Weiner said the casino complies with the law because Moskowitz had a development agreement that was amended in August 1995, when voters approved a card-club ordinance.

- The city and redevelopment agency have "failed to protect their scarce public dollars from being squandered on private interests."

Aside from recommending full recovery of the $12 million in public money, the report also recommends:

- The state Legislature should consider appointing a monitor or advisor to assist the city and redevelopment agency "in establishing independence and integrity."

- The Legislature should also reform the redevelopment laws to prevent "abuses and speculation."

- The city should postpone all significant pending decisions that make further commitments to Moskowitz until the state completes its investigation.

- Federal, state and local agencies also should look into the activities linked to the card club project.

- The city should find an "appropriate project" for the redevelopment site.

Rabbi Haim Dov Beliak, who leads a coalition of community activists opposed to the card club, said he's pleased with the findings. "This is absolutely an damning report," he added.