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How Moskowitz Profits from his Hawaiian Gardens Non-profits
A Detailed Analysis of Irving Moskowitz's Non-profit Operations in Hawaiian Gardens

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Moskowitz - arguably his own biggest recipient

In 1996 Moskowitz applied to operate a casino in Hawaiian Gardens. His application to the city council notes that Dr. Moskowitz was supporting a number of charities in the city including scholarship programs, local churches and a dental health program.35 1996 was, for perhaps obvious reasons, a stand-out year for the Foundation's charitable giving. It contributed $2.9 million to local non-profits operating in the city.36 Unfortunately, rather than increasing its investment in social services such as literacy, job and anti-violence programs, the bulk of the money, $2.06 million, went to a "pass-through" foundation, the Hawaiian Gardens Education Foundation, which funneled the funds to the Hawaiian Gardens city government.37 (1996 was not a stand-out year in the sense that the Moskowitz Foundation has been more focused on propping up city government than it has on funding charitable enterprises in the city). That left $840,000 for donations to local charities.

And if our estimates are correct, Moskowitz and his private firms are earning at least $1.6 million dollars a year in rent from "charitable" enterprises in Hawaiian Gardens.

Since posting this report on our website, more information has come to light that strongly suggests that Moskowitz's non-profit Tri-City Regional Medical Center is in violation of Internal Revenue Service rules qualifying health care providers for tax-exemption. (Click here to read more…)

If one tallies all of Moskowitz's foundation donations to charities operating in Hawaiian Gardens as well as to the city coffers starting from 1988, Moskowitz's first year in the bingo business through 2001 (the year of the most recent Foundation 990 available to the public), the total comes to roughly $18.5 million dollars.38

Hawaiian Gardens, looking down Carson St. Moskowitz's Casino is the white tent on the left. The bingo sign is to its right, farther down the street.

On average, that is $1.3 million dollars per year of municipal revenue and charitable giving - or about 1/30th of the bingo's annual profits39 or roughly $88 per Hawaiian Gardens resident per year. At any rate, it is less than the amount of tax-free funds generated by the bingo that wound up in Moskwitz's pocket - no matter how you cut it.

Calling in his chits

Moskowitz's involvement with charitable enterprises in Hawaiian Gardens earned him more than money - it also gave him unrivaled prestige and political clout in a community he was determinedly pressuring to give - and help him keep - a casino monopoly that is expected to generate revenues of up to $100 million dollars a year.40

Arguably, Moskowitz would never have had the chance to own a multi-million dollar casino had he not traded on the influence derived from his Foundation's contributions to the city.

Out of the $18.5 million the Moskowitz Foundation distributed in Hawaiian Gardens from 1988 thru 2001, $6,159,281 went to Hawaiian Gardens city coffers.41 And a total of $13, 936,610 went from the Moskowitz Foundation to organizations that Moskowitz either controlled or profited from directly - or that were run by his political allies and their relatives.

These contributions include the $4.9 million grant to the Tri-City Hospital and more than $3 million dollars given to a food bank run by Moskowitz and his wife Cherna.42

Critics - including Ray Rosas, the former director of a local non-profit - say the food bank was used "as a vote-generating machine" for Moskowitz-backed candidates.43

Rosas says that anyone who has been on the receiving end of a Moskowitz Foundation donation in Hawaiian Gardens knows there is an expectation of a quid pro quo - sometimes on a check-by check basis.

Rosas would know, he is the former head of the Coalition for Youth Development - an agency that for four years sought to combat substance abuse, child abuse, high unemployment and the high school drop-out rate in Hawaiian Gardens. The Coalition was funded almost exclusively by Moskowitz's bingo foundation.

After the agency presented the Foundation with a proposal seeking $1.5 million to fund a job center, Rosas and several board members met with the foundation's attorney Beryl Weiner. Rosas says that during the meeting Weiner implied that he would not support the job center unless they came out in support of Proposition A, the Moskowitz-sponsored 1995 ballot measure that would authorize casino gambling in Hawaiian Gardens. Rosas says he told the lawyer that, as the head of a 501c3 non-profit, he could not take a position on a political referendum and Weiner replied, "If you can't support this (Proposition A) - this proposal is going to have funding problems."44

Rosas says the pressure continued. He says on another occasion when he reiterated his refusal to support the proposition, "Weiner told me that "maybe I wasn't the right person for this job. Maybe we need someone more friendly to the foundation. After all, it is the doctor's money." I felt his comments conveyed a clear message - do our bidding or get out."45

Of course, it wasn't the doctor's money that Weiner was threatening to withhold. It was money generated by the charitable bingo operation and that was supposed to be funding programs which benefited the community - like Rosas' non-profit agency.

Soon after Rosas' refusal to support Proposition A, the Coalition's funding problems grew worse; the Foundation slashed its grant by more than half and it was forced to eliminate programs.46 In the end, Moskowitz's defunding forced the agency to close down entirely.

Rosas believes the City and the Moskowitz Foundation offer nowhere near the same level of services the Coalition used to provide.

Contributions to City coffers = increased political clout

Moskowitz channeled most of the $6.16.million his foundation gave to the City via "pass-through" foundations, created by his lawyers and headed by local loyalists, some of them related to City officials.

Casino under construction in 2000; bingo, barely visible, is in the strip mall to the left.

The Hawaiian Gardens' Public Safety and Police Foundation, for instance, was purportedly set up to support the city's police department. Starting in 1997,47 the short-lived foundation helped keep Hawaiian Gardens' cash-strapped city government afloat by writing $200,000 checks each month made payable to the municipal coffers - at the time it amounted to about half the city's budget.48 The Public Safety and Police Foundation president and incorporator, Donna Schultze, is the daughter of the late city council member Donald Schultze and current city council member Betty Schultze. One of the foundation's directors, Suzanne Underwood, was recently elected Hawaiian Gardens' City Clerk and has long been a vocal supporter of Moskowitz. The Irving I. Moskowitz Foundation provided the totality of the $3.7 million dollars received by the Foundation during its short existence.49

Comparing city budget documents and the foundation's IRS Form 990s, there is a $372,894 discrepancy between what the public safety foundation claimed to have given the city and what the city recorded as donations received from the foundation.50 The foundation dissolved in 2000 and the whereabouts of the missing funds has never been explained.

Some might argue that keeping Hawaiian Gardens solvent was a small price for Moskowitz to pay as he sought support to build his casino. (In fact the City had long depended on the bingo for a substantial part of its budget and, when it licensed the Moskowitz Foundation, expected the support to continue). But apparently, he himself didn't think so. His chief lieutenant in Hawaiian Gardens, attorney Beryl Weiner, attempted to use the money to pressure the city council into doing Moskowitz will - including demands to fire employees who did not do the doctor's bidding.

In 1999 Hawaiian Gardens City Council Julia Sylva reported that Weiner threatened to withdraw the donations when city officials or agencies did not take Moskowitz's orders, given by Weiner.51 On another occasion, former City Clerk Dominic Ruggeri noted in a letter to Moskowitz that Weiner would "not make any additional [financial] commitments until, it would seem by the tone of discussions, Ms Julia E Sylva, Esq. is relieved of her duties as City Attorney."52

According to one former city council member who asked not to be named, Sylva's 'crime' was asking too many questions about past deals shifting casino construction costs from Moskowitz to Hawaiian Gardens. "As soon as she started doing that," he said, "they got rid of her lickety split."

When Moskowitz found himself in a legal wrangle over his efforts to make the city pay the lion's share of his casino development costs, he turned the money spigot off completely. As part of its belt-tightening measures, the city disbanded the police department and 70 percent of the city staff was laid off,53 severely cramping its ability to deliver services.

Tallying the costs

The City Council members who complained about Moskowitz's decisions to cut off city funding are all gone, replaced by the current Hawaiian Gardens city government, which is actively campaigning on Moskowitz's behalf in his bid to win a permanent casino license. Last year, a City Council member argued in a New York Times article that it did not matter what Moskowitz did with the foundation money overseas, in part, because he said his city benefited too.54 By the same logic, it is likely that he would make the same argument with regard to Moskowitz's profits - what difference as long as our residents are benefiting too?

But this rising-tide-lifts-all-boats theory of philanthropic profiteering could not be more wrong - Moskowitz's donations have merely provided a smokescreen for unbridled opportunism and they have enabled him to use his financial clout to turn the city into a personal fiefdom. No one has benefited more from the money he has donated to the Hawaiian Gardens community than he has himself, but it is the residents of Hawaiian Gardens who are paying the price.

Endnotes:
1. http://censtats.census.gov/data/CA/1600632506.pdf`
2. Gardens Regional Hospital and Medical Center, Inc.1997 1023 IRS application for Recognition of Exemption Under Section 501c3 of the Internal Revenue Code - Part IV, p. 9 Balance Sheet and Gardens Regional Hospital and Medical Center dba (doing business as) Tri-City Regional Medical Center 1998 990. Tri-City applies for tax-exempt status at the end of 1997 - at the beginning of 1998 its total assets totaled $5,303,473, its liabilities equaled $10,237,632, and it had $150,432 cash on hand.
3. According to Los Angeles County property records Cerritos Gardens Hospital Company currently owns the property at the hospital's address. Irving Moskowitz is identified as the company's managing general partner in his casino application submitted to the city of Hawaiian Gardens. Hawaiian Gardens Card Club, Inc., Information in Support of Application for Card Club License, January 25, 1995.
4. Moskowitz and his wife Cherna have presided over the Foundation as President and Secretary Treasurer since at least as far back as 1988. Irving I. Moskowitz Foundation 990s, 1987-2001.
5. The Irving I. Moskowitz Foundation 1997 990, Statement 7, p. 28 (On p. 23 the Foundation notes that, "Concerning grants and allocations to Gardens Regional Hospital and American Friends of Mercaz Harav which are listed on statement 7: the donees have agreed under specified circumstances to return a portion of the grant to the Irving Moskowitz Foundation.").
6. Gardens Regional Hospital and Medical Center, Inc. 1997 1023 IRS application for Recognition of Exemption Under Section 501c3 of the Internal Revenue Code - Exhibit E, "Lease by and Between Cerritos Gardens General Hospital Company, a CA limited partnership and Gardens Regional Hospital and Medical Center." The lease agreement notes that the hospital's dba (doing business as) name is Tri-City Regional Medical Center. It is also worth noting that the agreement included a provision allowing Cerritos Gardens Hospital Company to resume ownership of the hospital at any time.
7. Gardens Regional Hospital and Medical Center, Inc. 1023 IRS application for Recognition of Exemption Under Section 501c3 of the Internal Revenue Code - Exhibit E, "Lease by and Between Cerritos Gardens General Hospital Company, a CA limited partnership and Gardens Regional Hospital and Medical Center." On p. 3 the lease states the base monthly rental rate will be increased by no less than 4% per calendar year.
8. UCC (Uniform Commercial Code) Financing Statement 0013761201, California Secretary of State, May 15, 2000, debtors: Gardens Regional Hospital and Medical Center, Inc. and Tri-City Regional Medical Center, Secured Parties: Irving I. Moskowitz Foundation. Two additional CA UCC Records, 9903560258, dated February 2, 1999 and 0013761201, January 25, 2001, indicate that Tri-City also is indebted to its landlord - Cerritos Gardens General Hospital Company. These state financing statements do not record the amount of the loans but show that the hospital pledged its accounts receivable as collateral.
9. The social contract of tax exemption for charitable organizations is based on the assets of those organizations being held in trust for the public - not for the benefit of the individual who controls a charity.
10. "Prenatal Services will provide care for the female patient during pregnancy, labor, delivery and the post-partum period." Gardens Regional Hospital and Medical Center, Inc. 1023 IRS application for Recognition of Exemption Under Section 501c3 of the Internal Revenue Code -Exhibit B "Statement of Activities."
11. California Office of Statewide Health Planning and Development (OSHPD), Patient Discharge Database, 2000 and OSHPD Annual Utilization Report of Hospitals, 2001.
12. 2002 OSHPD Public Patient Discharge Data.
13. http://censtats.census.gov/data/CA/1600632506.pdf`
14. "With regard to charity cases, the Hospital's policy is simple. The Hospital will not turn away any patient for financial reasons. When a charity patient is admitted, the case is handled individually on a case by case basis. In some cases, the Hospital absorbs costs associated with providing services to charity patients." Gardens Regional Hospital and Medical Center, Inc. 1023 IRS application for Recognition of Exemption Under Section 501c3 of the Internal Revenue Code Addendum to Schedule C - Hospital and Medical Research Organizations.
15. OSHPD financial data 2001and the OSHPD Patient Discharge Database 2000. Additionally,OSHPD records indicate Tri-City Regional Medical received zero dollars in Disproportionate Share (DSH) funds 2000 and 2001.These are funds that the state makes available to hospitals which care for large numbers of poor patients, the money is pegged to the number of Medical patients the hospital serves. The hospital's failure to collect DSH funds is striking given the low income levels of many in the Hawaiian Gardens community.
16. Tri-City Regional Medical Center is one of five non-profit hospitals in Los Angeles County with 100-149 licensed beds, charity care statistics can be found in OSHPD financial data 2001.
17. OSHPD Annual Utilization Report of Hospitals, 2001 and 2001 OSHPD financial data
18. OSHPD Annual Utilization Report of Hospitals, 2001
19. http://www.cstobesity.com/
20. "Shrink Stomach, Lose Weight?" 48 Hours, July 13, 2000
21. 2002 OSHPD Public Patient Discharge Data.
22. 2002 OSHPD Public Patient Discharge Data.
23. Gardens Regional Hospital - DBA Tri-City Regional Medical - 2001 federal tax return. Dr. Mathias Fobi is listed as Foca Management's Agent for Service of Process in the California Secretary of State's business registry database.
24. Gardens Regional Hospital - DBA Tri-City Regional Medical - 2001 federal tax return.
25. "Shrink Stomach, Lose Weight?" 48 Hours, July 13, 2000
26. 2002 OSHPD Public Patient Discharge Data.
27. According to 2002 OSHPD Public Patient Discharge Data, 136 Tri-City Regionala Medical Center discharges came from the Hawaiian Gardens zip code (90716). A total of 988 patients registered Hawaiian Gardens zip codes in the state's total patient discharge set for all hospitals in that year.
28. According to the 2002 OSHPD Public Patient Discharge Data, 136 Tri-City discharges came from the Hawaiian Gardens zip code (90716)and Tri-City Regional Medical Center discharged a total of 2519 patients that year.
29. Irving I. Moskowitz Foundation, 1988 and 2001 990s.
30. Irving I Moskowitz Foundation 1997 990, Statement 14, p. 11, "The Foundation leases property from a partnership in which the president is a general partner. The lease includes a fully furnished, fully equipped bingo parlor which is a license to operate bingo games in the city of Hawaiian Gardens." LA County property records indicate the bingo hall is situated on property owned by Cerritos Garden General Hospital Company, as discussed earlier, Moskowitz is the company's general partner.
31. p.4 Irving I. Moskowitz Foundation 1999 and 2000 990s.
32. C. Cook, "The Bingo Connection," Mother Jones, September 1, 2000.
33. Ibid.
34. J. Seguro, "Bingo Club Sued: Latino Rights Groups Says People Called Volunteers Are Employees," Long Beach Press-Telegram, March 20, 2000.
35. Hawaiian Gardens Card Club, Inc., Information in Support of Application for Card Club License, submitted to the city of Hawaiian Gardens, January 25, 1995.
36. Irving I. Moskowitz Foundation 1996 990 and Printout from Hawaiian Gardens City government, showing that $2,060,217 went from the Moskowitz Foundation to the City, via the Hawaiian Gardens Education Foundation, a "pass-through" foundation completely funded and controlled by Moskowitz.
37. This information was obtained from a list of donations made to the city of Hawaiian Gardens, 1995-2000, obtained through a Public Record Act request to the city.
38. Irving I Moskowitz Foundation 990s, 1988-2001.
39. Ibid. A more detailed examination of the foundation's history of contributions to questionable causes can be found at: http://www.stopmoskowitz.org/bingobucks.pdf.
40. R. Russell and V. Mejia, "City of Fear," New Times Los Angeles, February 12-18, 1998 edition. The Information in Support of Application for Card Club License, submitted to the city of Hawaiian Gardens, January 25, 1995 estimates the casino would gross $50 million dollars in its first year alone.
41. This information was obtained from a list of donations made to the city of Hawaiian Gardens, 1995-2000, obtained through a Public Record Act request to the city.
42. Hawaiian Gardens Food Bank, Inc. 2001 990 indicates that Moskowitz is president and his wife Cherna is vice president of the food bank.
43. Interview with Ray Rosas conducted on September 18, 2003. The quote comes from R. Russell's and V. Mejia's article "City of Fear," which ran in New Times Los Angeles, February 12-18, 1998 edition.
44. Ibid.
45. Ibid
46. Irving I Moskowitz Foundation 990s filed in 1995 and 1996.
47. Hawaiian Gardens reluctantly dissolved its Police Department in 1997 because Moskowitz refused the city sufficient bingo funds to pay for it.
48. "Entrepreneur to Open Long-Awaited Card Club," Los Angeles Times, December 12, 1997; Segura, J., "Hawaiian Gardens Wants Arbitrator to Handle Dispute," Long Beach Press-Telegram, August 5, 1999.
49. Hawaiian Gardens Public Safety and Police Foundation 990, 1997-2000.
50. Hawaiian Gardens Public Safety and Police Foundation 990s, 1997-2000, Irving I. Moskowitz Foundation 990s 1997-2000 and a list of donations made to the city of Hawaiian Gardens, 1995-2000, obtained through a Public Record Act request to the city.
51. March 19, 1999 memorandum from HG City Counsel Julia Sylva to the Hawaiian Gardens Redevelopment Agency.
52. August 3, 1997 memorandum from Dominic Ruggeri to Irving Moskowitz.
53. "Entrepreneur to Open Long-Awaited Card Club," Los Angeles Times, December 12, 1997; Segura, J., "Hawaiian Gardens Wants Arbitrator to Handle Dispute," Long Beach Press-Telegram, August 5, 1999.
54. C. LeDuff, "California Bingo Plays on World Stage," The New York Times, November 25, 2002

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