beckons drivers on the 605 freeway to the white-domed casino in Hawaiian
Gardens, a city with none of the romance of its name.
The casino project, that was to lift from poverty the tiny city in
southeast Los Angeles County, has instead brought crushing debts and
heartache. Now, like the gamblers it hopes will save it, Hawaiian
Gardens wagers on credit, some funded by the casino developer himself,
Irving Moskowitz, M.D., internationally prominent-enemy of Israeli-Palestinian
peace and kingpin of Hawaiian Gardens. Before Moskowitz ventured into
casino gambling, he made a fortune in the hospital business. His first
venture in Hawaiian Gardens was the local hospital. Much of Moskowitz'
local power derives from an enormous bingo hall he runs through his
Irving I. Moskowitz Foundation.
should be crunch time for the 72-year-old Moskowitz. A decision on his permanent
casino license is imminent – just when the California Joint Legislative Audit
Committee (JLAC) has launched a probe into Moskowitz's financial dealings
with Hawaiian Gardens. But at City Hall they're saying the license, which
must be approved by Attorney General Bill Lockyer, is a done deal.
How this can be is a puzzler, when, according
to a news report ,
the JLAC is looking at the Hawaiian Gardens Community Redevelopment
Agency 's financing of the casino. There are questions about whether
the funding violates a state law forbidding investment of redevelopment
funds in gambling ventures.
For months, the Coalition for Justice has been
encouraging letters to Lockyer asking him not to grant
Moskowitz a license. The letter campaign focused on the questionable
use of redevelopment funds for the casino. Letter-writers also voiced
concern about the Moskowitz Foundation's bingo operation exploitation
of Latino "volunteer" workers to generate millions of dollars for
organizations fighting Israeli-Palestinian peace far from Hawaiian
Moskowitz' casino under construcion in mid-1999
Tell-tale document found
now the Coalition has obtained something that surely must give Lockyer pause:
long-sought evidence supporting allegations that, moments before Hawaiian
Gardens approved the agreement that governs the casino project, a Moskowitz-friendly
draft was substituted for the official document.
difference between the two documents is enormous. For starters, the substitute
document knocked Moskowitz's good faith deposit down from $3 million to $25,000.
But potentially even more expensive is some stealth language that could free
Moskowitz from the casino tax specified in his city license – the revenue
justifying the whole project and at least some of the pain it has caused.
[Click here to see a .pdf document comparing the two agreements.]
cities are naturally attractive to would-be casino operators. But, for the
most part the gambling moguls significantly bolster the cities' finances.
This story is about how a little city of hard-working people has gone into
debt to build a rich man a casino.
Kingpin of Hawaiian Gardens
hard not to notice the Moskowitz presence in Hawaiian Gardens, even if you
manage to miss the large "Irving Moskowitz Little League" banner in the local
ballfield. That's across from the Tri-City Regional Medical Center, which
Moskowitz built in 1969, his first local venture. Not far off, the Hawaiian
Gardens Food Bank, recipient of most of the bingo proceeds which Moskowitz
spends in Hawaiian Gardens, gives out food and used clothes to the many impoverished
families among Hawaiian Gardens' population of 14,800.
the hospital (and sharing its parking lot) stands the bingo hall, where signs
remind players the operator is the Irving I. Moskowitz Foundation. Inside,
tired-looking immigrant workers move between the long rows of players. They
hand out dollar-a-game cards and pluck up bills for the Irving I. Moskowitz
Foundation. The foundation sends millions of those bingo dollars to support
the doctorís causes – most infamously, the purchase of homes in Palestinian
neighborhoods of Jerusalem for occupation by right-wing Jewish opponents
of Israeli-Palestinian peace. If he gets the casino going full tilt, Moskowitz
could have not handfuls, but hundreds of millions to spend on derailing the
block up Carson Street from the bingo, amid shabby franchise food outlets
and low-rent merchandisers, Moskowitz' poker casino sits far back behind
a forbidding iron fence. Viewed up close, the casino's dazzle turns out to
be lights playing on cinderblocks and a shiny white vinyl roof. Moskowitz
operatives recently evicted and dismantled a popular donut shop that clung to the casino's perimeter (see photo at end of story).
lives in Miami Beach, letting his lawyers and his two Israeli sons-in-law
do his legwork in Hawaiian Gardens. Nevertheless, those who've dealt with
the retired physician say he's a control freak who keeps close watch on local
developments. "He phones quite often, and he'll talk and talk," said former
Hawaiian Gardens mayor and councilmember Kathleen Navejas, recalling the
days before she and the doctor became political foes.
Cabrera, a member of the current city council who occasionally strays from
the Moskowitz program, said in a 1999 interview that he expected Moskowitz
to run someone against him, spending many times his own typical campaign
budget of $2,000. "Two of the councilmembers elected [in March] were his
people," said Cabrera, referring to Petra Prida and Leonard Chaidez, who,
with Betty Schultze make up the current Moskowitz majority. "And," continued
Cabrera, "he's grooming others to take my place." Cabrera, who was born in
Hawaiian Gardens when the place was "nothing but a swamp," and who was president
of the Chamber of Commerce in 1964, when the city incorporated, sighed. "There's
a lot of good history – but ugly politics."
The Moskowitz casino project
especially ugly spell of local politics began in 1993, with the development
agreement for the project that eventually became Moskowitz' casino. Initially,
Moskowitz approached city officials – in their dual roles as directors and
staff of the Community Redevelopment Agency (CRA) – with a proposal to build
a supermarket on the choice land on Carson Street, just off the 605 freeway.
But, according to several former and current city officials, it was widely
believed that the doctor really planned to use the site for a casino.
in 1989 a member of the City Council wrote his colleagues a memo, saying
"some of you are upset with the recent meeting I had with Dr. Moskowitz concerning
the development of the 23-acre parcel at the northeast corner of Pioneer
and Carson, adjacent to a parcel of land owned by the Redevelopment Agency.
He wants a card casino on the property."
Late December 1999: Moskowitz' casino nears completion
owned some of the land, but businesses were flourishing on additional parcels
he wanted. So Moskowitz asked the CRA to condemn these and sell them to him,
recounts Nelson Oliva, who was, at the time, the Hawaiian Gardens city manager,
and therefore also the CRA's executive director. In interviews with the Coalition
and this writer, Oliva told how the agency began drafting the deal, known
in California as a "disposition and development agreement," or DDA.
to Oliva, "One of the issues in negotiations over the DDA was that current
property owners . . . [and their] tenants would be treated in a proper way.
. . . Assurances were made that the city and agency would pay them the market
value of the property and that their tenants would be treated in a professional
way. They would be protected under the laws of California redevelopment,
which provide certain assurances to tenants being displaced by redevelopment
activity," said Oliva.
years later, several of those business owners have harrowing tales to tell
about their eviction and their long wait, which continues, for the CRA to
pay their relocation expenses so they can get back into business.
no one knew, back in 1993, when the CRA board members (the city councilmembers
wearing their CRA hats) approved the DDA, how things would turn out. Indeed,
very few people even realized that the DDA that they passed was a different
document than the DDA the CRA staff negotiated with the Moskowitz organization.
That staff-written DDA was generous enough, with the agency charging Moskowitz
only 50 percent--$2.75 millionóof what it paid to acquire the parcels of
A last-minute switch
Oliva tells it, during an agency meeting, "there was a request by one of
the members of the agency that the agency be allowed to go into closed emergency
session." On a large conference table in the room where they gathered, Oliva
continued, "was a stack of legal documents. When I went to review these documents
– knowing that there was nothing in there prior to the meeting starting –
I realized this was another DDA. Not the one that staff had prepared, not
the one that had been hammered and negotiated with Beryl Weiner [Dr. Moskowitz'
attorney] and the CRA attorneys and the city attorneys, but another DDA."
continued: "[Then city attorney] Graham Ritchey says, 'What's this? All of
a sudden Dr. Moskowitz needs to have [changes]?' We asked them for time to
read it," Oliva said. But that wasn't allowed. "Graham Ritchey was graciously
allowed to grab a copy."
CRA directors promised not to discuss the new document, but "to talk about
something else," Oliva continued. When "they came out, Weiner has a box of
documents and the vote is taken [to approve] their DDA."
Oliva: "It was conveyed to me by some of the members of the agency at the
time that this was the agreement that Mr. Weiner and Mr. Moskowitz were comfortable
with, and the project would still not be jeopardized. It would still be developed
as talked about and discussed for almost a year."
a councilmember at the time, confirmed Oliva's account. "That's true, and
we all voted for it," she said. "Because Moskowitz called and called and
there was so much pressure, we asked staff to step out."
if he recalls the DDA's being switched, Ritchey said he was reluctant to
probe old history because "I left Hawaiian Gardens under friendly circumstances."
He said, "I don't recall if that was the case."
Sylva, who succeeded Ritchey, said the switch was possible. Two years ago,
in a letter to Weiner, Sylva put it more strongly: The DDA, she wrote, "appears
to be an incongruous and hastily drafted document."
Lupe Cabrera described the DDA as "put together by the doctor's attorney."
"Absolutely not!" said Weiner, when asked to comment on the alleged switch.
when the Coalition for Justice obtained a copy of the original DDA and compared
it, line for line, with the substitute that became the official DDA, several
stark differences jumped off the pages. For starters, the good faith deposit
required of Moskowitz was reduced from $3 million to $25,000!
[Click here to see the relevant page in the DDA in .pdf format.]
the original DDA said the CRA would deliver the site to Moskowitz in an "as
is" condition and the parties would split the cost of removing hazardous
substances, the substitute DDA required the CRA to take responsibility for
hazardous substances on the site.
more serious is some language added to the substitute DDA that appears to
allow Moskowitz to challenge the casino revenue tax established in 1995.
This language says, "[N]either the Agency nor the City of Hawaiian Gardens
may at any time designate . . . [any] property or business located at or
near the Site on property now owned or hereafter acquired by Redeveloper
[Moskowitz], for greater tax assessments or treatment (including, but not
limited to, business license or other taxes) that established for all other
properties or businesses within the City of Hawaiian Gardens, nor may any
such taxes, assessments or treatment (including, but not limited to, business
license or other taxes) be hereafter increased by any percentage greater
than such increases for all other properties and businesses within the City
of Hawaiian Gardens ."
[Click here to see this page of the revised DDA; the key text is in red.]
Potentially devastating language
may be pretty tame boilerplate language for a supermarket development. But
a casino, with all the potential crime, blight, congestion and stigma it
brings a city, is expected to bring millions of dollars to the municipal
coffers of those cities willing to tolerate it. The ordinance permitting
the casino, which Hawaiian Gardens voters passed in 1995, specified a tax
rate of between 10 percent and 13.2 percent of the casino's gross receipts.
now, Moskowitz would probably not want to invoke that little clause. He recently
loaned the city $3.5 million, to be paid back (interest first) out of casino
revenues. But once the city pays down the loan, it might be confronted with
the devastating prospect of giving the casino a free ride. Compare it to
Atlantic City paying Donald Trump to establish casinos.
substitute DDA also had an attachment calling for the city or the CRA to
be responsible for any improvements on and off the site, noted Oliva. "Those
improvements could be curbs, gutters, redesign of streets, traffic lights,
parking lot improvements. Anything the city or agency would impose as a condition
of development on the developer. Obviously," he said, "this appeared to be
a very done deal due to some very strong lobbying efforts behind the staff's
and technicians' backs. There was very little we could do."
original DDA obtained by the Coalition refers to attachments, although they
are not attached, so it is impossible to verify that these conditions were
absent in that document.
no one ever formally challenged the DDA's validity, suspicion over the document
never diminished. In 1999, the Moskowitz organization prevailed on the city
council and the CRA to call a special (and especially inconvenient) early-morning
meeting to approve a "Certificate of Estoppel," a formal, legalistic avowal
of the DDA's authenticity.
amendment to the DDA passed in 1994, heaped even more expenses onto taxpayers.
Where previously the DDA had the agency and Moskowitz sharing the costs of
evicting the existing businesses on the site, the amendment obliged the CRA
"to bear all costs, expenses, damages and liabilities incurred by Redeveloper
the amendment committed the agency to hire Beryl Weiner's law firm to represent
the agency and Moskowitz in the eminent domain cases against the businesses.
The hourly fees for Weiner and other attorneys in his firm were specified
in the amendment, as was the agency's statement that it was willing to tolerate
any potential conflict of interest Weiner's representation might entail.
or not Moskowitz and Weiner were laying the groundwork for the casino, when,
in 1995, they made their intentions clear, the contractual foundation was
beautifully prepared. By contrast, the public process that followed was surpassingly
ugly, featuring recall elections, lawsuits and pain that has yet to be assuaged.
A brutal campaign
the months leading up to the special referendum on the casino, Moskowitz
started pumping significant amounts of bingo proceeds into the city, through
foundations under his control. The bingo money underwrote a significant portion
of the city's expenses including a municipal police force, established to
replace the county sheriff's contract services. (It's difficult to say exactly
how much of the city's budget Moskowitz subsidized, because the city skipped
a few years of budget writing.)
casino referendum sparked lawsuits, recall elections and enduring bitterness.
Over the course of two weeks – and several emergency City Council meetings
– in August 1995, Nelson Oliva and City Attorney Maurice O'Shea were fired
(O'Shea pre-empting the axe by quitting), Navejas was served with a recall,
the casino measure went on the ballot and the DDA was amended to drop the
language that specified a supermarket.
says he'd been arguing with Beryl Weiner that there should be a new deal
– not an amendment – because the basic nature of the project had changed.
Such a deal should require "that $3 million should be put back," said Oliva,
referring to the good faith deposit, whittled down in the substitute DDA.
A redrawn deal should also require Moskowitz to pay for all the site improvements
and half the eminent domain costs. "If it was gaming" that Moskowitz was
planning as the redevelopment project, Oliva said he told Weiner, "taxpayers
shouldn't subsidize any of it."
remembers his last negotiating session with Weiner, on August 7 th , a Monday.
The next night, there was a regular City Council meeting with a routine agenda.
But, Oliva said, before the end of the meeting, Mayor Robert Canada "started
passing out the agenda for a 24-hour notice emergency meeting." On that agenda
was the "firing of the city attorney, firing of the administrator and the
agency attorney." Oliva said he cautioned the members that Canada's agenda
hadn't been prepared by city clerk, but "was prepared by someone off staff
and faxed in, so the council should be sure its actions were legal." But
"at the Wednesday meeting, I was terminated. They retained Mr. Ritchey [the
CRA's attorney] for five months, and after frustration, he resigned."
The project, concluded Oliva, had become " a full gambling casino."
reasons that have never become clear, the amendment to the DDA, passed on
August 15, 1995, did not explicitly state that the project was to be a card
club, as California casinos are called. Instead, it was simply called "a
commercial development of between 50,000 to 80,000 square feet."
Moskowitz may ultimately come to regret those
vague words, which may cost him, retroactively, the CRA subsidy.
One of Hawaiian Gardens' own State Assembly representatives, Alan
Lowenthal, announced last year that he would investigate whether
the agency's spending on Moskowitz's casino was illegal under 1996
legislation called the
" Isenberg Amendment ." That measure prohibits spending redevelopment
agency funds on gambling establishments contracted after April 1,
1996. Lowenthal, who represents about 70 percent of Hawaiian Gardens
and chairs the Assembly Housing and Redevelopment Committee, said
in an interview with this writer: "My sense is that amendment was
written for Hawaiian Gardens."
attorney Beryl Weiner argues that city voters authorized the casino in a
November 1995 referendum. Others say the first explicit mention of a casino
came long after the cutoff date. Lowenthal said that "there are serious questions"
involved and, if he finds the agency used funds illegally, "I would be compelled
to act. No one is above the law." The investigation launched last fall by
the State of California's Joint Legislative Audit Committee may also scrutinize
the use of agency funds for the casino.
in the fraught month of August 1995, Navejas, Oliva and their allies, backed
by three big area casinos, filed a series of lawsuits against Moskowitz,
the city and the agency. (The three casinos were the Commerce Club, the Bicycle
Club and Hollywood Park, the latter of which tried to apply for a Hawaiian
Gardens casino license but was rejected.) Their first action sought to block
the referendum and they persuaded a Superior Court judge to order the measure
off the ballot because of fraudulent petition gathering practices. However,
an appeals panel put it back on.
the group sued to block construction of the casino and punish Moskowitz and
the city for alleged illegalities in the referendum and the granting of the
casino's business license (which doesn't expire until 2021).
complained that the special meeting at which three pro-Moskowitz councilmembers
fired Oliva and forced O'Shea's resignation was illegal. Their complaint
contended that the two were fired "because they refused to accede blindly
to the . . . demands and plans of Moskowitz. . ." for the casino referendum.
lawsuit alleged that "City workers were permitted to campaign for the initiative.
. . on city time and using city vehicles and other resources; campaign posters
were permitted to be plastered on city property, including posting at City
Stratospheric campaign spending
lawsuit also complained of Moskowitz' huge personal expenditure on the special
election held on the casino referendum. The infusion of cash was one of the
factors prompting persistent questions about the validity of the election,
which legalized casino gambling in Hawaiian Gardens. Indeed, according to
campaign spending reports, Moskowitz pumped $561,000 into the contest, gaining
the votes of 965 of the 1687 who went to the polls. Most of the money was
given directly to individual Hawaiian Gardens residents, in amounts ranging
from $100 to several thousand dollars.
the referendum, allege the plaintiffs, "[s]ome of the proponents. . . .received
thousands of dollars" from Moskowitz and his Cerritos Gardens General Hospital
Company (which is the landlord for the casino, the bingo and the hospital).
Recipients of Moskowitz campaign largesse included the wife of a city councilmember
and several city workers, one of whom, Fred Licon, collected $11,733.15 for
campaign work; a Patty Licon at the same address given for Fred got $5,300.
In a sworn statement in an unrelated lawsuit, Moskowitz describes Fred Licon
as "an employee of the City and during off-hours, he works at one of my projects."
During the voting, the suit alleged, casino supporters challenged many voters
and told others they weren't on the voter lists.
July 1997, Navejas and her allies won a reported settlement of $281,383 from
Moskowitz and undisclosed cash payments from the city and agency. In a letter,
Sylva, the ex-city attorney, mentions the city's obligation for $100,000
in legal fees to the plaintiffs' attorney's firm for the case. In return
for the settlement, the plaintiffs had to drop their claims of illegalities
surrounding the casino referendum and the DDA.
internal city document used in the settlement talks shows that city lawyers
believed that, if the case went to trial, Hawaiian Gardens might be found
guilty of several of the plaintiffs' allegations, including violating laws
governing open meetings, elections, redevelopment and using public funds
for partisan purposes. The document estimated that a trial might result in
potential liability and costs amounting to more than $5 million. Plus, it
notes, the city could lose $5 million a year in card club revenue during
litigation that prevented the casino from operating. (The city's budget is
currently around $4 million a year.)
the lawsuit moved through the system, Navejas mounted recall elections against
two Moskowitz loyalists on the council, knocking out one. But in the same
election, Moskowitz won his recall of Navejas. In 1997, Moskowitz reported
spending $16,925.00 on the recall of Navejas' ally Rene Flores, which also
December 1999: Workers board up building, as Moskowitz' casino evicts popular donut stand.
A contractor subsequently leveled the building without the required asbestos procedures,
prompting the Coalition to seek an investigation [see
the Coalition's News
Release – Jan. 5 2000.]
hired gang members to stump for recall votes against Navejas, according to
several sources. An Israeli TV crew interviewed one of the recall workers,
who called himself "Boxer" and said Moskowitz had paid him and his relatives
$1,000 each. "Boxer. That's his street name," said Nelson Oliva, who added
that, as city manager, he "had a good working relationship" with local gang
members – good enough to keep municipal property graffiti-free. "Boxer was
one of the main players in the Hawaiian Gardens street gang," said Oliva.
confirmed that Moskowitz "of course" used members of the local street gang
as election workers. "A lot of these guys were felons, and they couldn't
work for the casino. But they were okay for campaigning. I've heard they
pay them $7 an hour." He added: "One of the kids [Moskowitz] hired is in
jail" for killing a black youth during a period of Latino-African-American
strife. According to one source, anti-card club campaigners hired security
staff for protection against Moskowitz's precinct walkers.
says she previously employed some of the same the same young men as part
of a bingo-funded gang diversion program – until she fell out with Moskowitz
and he stopped the money. Then, she says, he bought the building that housed
the program and took her name off it. It stands empty today. "Four years
later and he leaves the lights on every night," she said. The program, which
provided a range of services to at-risk kids and their families never resumed.
"He's very good at playing psychological warfare," said Navejas.
the cruelest blow was the one dealt by the arm of the law against Navejas
and her ex-husband the day before the casino referendum. As volunteers, the
two had been running the community food bank, which in the days of harmony,
enjoyed Moskowitz' funding. On that November morning, Navejas recalls, investigators
from the Los Angeles District Attorney's office swooped down on both their
went out to the media that Carlos Navejas had embezzled money from the food
bank. (Such allegations are not usually leaked, much less made formally,
by a disinterested third party with a puckish sense of timing.) No charges
were ever brought. Indeed, no embezzlement was ever alleged. But the DA ignored
repeated appeals to formally close the case and return seized documents.
[Click here to see a .pdf of the Coalition's News Release Regarding the Changed Agreements]