Bingo operations at the Rincon Indian Reservation in northeast San Diego County have been halted, and the payroll and prizes have gone unpaid amid allegations that the tribe has not received its proper share of profits generated by more than $10 million in revenue.
The state attorney general's office in San Diego says it is investigating accusations of mismanagement and there is talk on the reservation of impeaching the current tribal leadership for alleged mismanagement.
But Charles Schlegel, the Orange County man retained by the Indians to manage the bingo games, says that the problem is simply that the games are not paying for themselves and nobody has made any money over the 1 1/2 years since bingo made its debut at Rincon, one of three Indian bingo centers in San Diego County.
The last bingo game on the reservation was played June 9, and a scheduled $12,000 payroll last week went unpaid.
In addition, a Vista automobile dealership is still waiting to be paid for two 1985 Chevrolet Sprints that were awarded as prizes.
Schlegel, managing partner of S & G Associates in Santa Ana, which operates the games in return for a 35% split of the net profits, denied reports that S & G has filed for bankruptcy, but conceded that in addition to being behind on payroll and in paying for the two cars, the company is delinquent in forwarding to the appropriate government agencies unemployment, disability and personal income tax contributions withheld from employees' paychecks.
He said the bingo games have lost $500,000 over the last six months because the amount of guaranteed prize money on any given evening exceeded the income generated that night.
A $640,000 bingo hall, financed by S & G, was constructed last summer to accommodate as many as 1,800 bingo players, but crowds of late have numbered about 400 "because of the bingo wars," Schlegel said. At least 500 customers are needed to break even, he said.
He noted that high-stakes bingo is played at the Barona and Sycuan Indian reservations in east San Diego County as well as at the Soboba Indian Reservation at Hemet and the Morongo Indian Reservation at Banning.
He said the bingo games have generated more than $10 million since their inception, but that operating costs accrued by S & G have exceeded that by about $400,000 over and above the cost of constructing the building.
He said audits and ledgers showing the figures are available to the tribal officers for their inspection and that, in fact, the accounting is done by Indians on the payroll of Rincon Tribal Enterprises, which was established to oversee the bingo games.
Rincon's tribal attorney, Richard Sola, said Thursday that the tribal council's immediate concern is simply that the late payroll be paid.
On that point, tribal Chairman Don Calac sent a letter on Monday to Schlegel, notifying him that S & G is in "material breach and default" of the management agreement by having closed down the games and having not met the payroll.