Barona Indian Tribe Sues Operator of Bingo Games

The Barona Indians filed a lawsuit against their bingo management firm in federal court Monday accusing the company of keeping a double set of financial books, failing to prepare monthly operating statements, undercapitalizing the bingo games and failing to pay its fair share of bingo operating expenses.

The lawsuit also demands that the company, American Management and Amusement Inc., repay the Indians “all funds which have been stolen or embezzled by employees” of American Mangement, including $96,000 that the firm’s former general manager, Stewart Siegel, has admitted stealing through rigged bingo games.

The Barona tribal council voted two weeks ago to terminate its contract with American Management, and the suit, filed by attorney Art Bunce in U.S. District Court in San Diego, was intended to support the council’s earlier action.

The high-stakes bingo games, among the first to be played on an Indian reservation in California and unaffected by the $250 payoff limit for charity bingo games, were halted April 27 when American Management announced it was going to reorganize management of the games because of cash-flow problems.

The chief executive of American Management has steadfastly refused to comment on the Barona bingo games, and the company’s attorney could not be reached for comment Monday.

The Indians’ suit maintains that the tribe’s contract with American Management, signed in May, 1983, was null and void from the start because it was never approved by the U.S. Bureau of Indian Affairs.

Tom Dowell, superintendent of the bureau’s Riverside office, said it was his understanding that the Barona-American Management contract did not need bureau approval because it was signed in 1983, whereas the bureau has only insisted on approving bingo management contracts since August, 1985.

That issue notwithstanding, the lawsuit maintains that the contract with American Management should be declared invalid because of a host of breaches by American Management.

The suit notes that American Management transferred interest in its company to others--thereby assigning a third party to the bingo contract--without tribal approval and, furthermore, the new owners were conducting bingo operations of their own within 100 miles of the Barona Reservation, another contractual violation.

(The new owners have since said that they and American Management’s owners scuttled the deal because it upset the Barona tribe.)

The suit alleges that American Management failed to offer “a serious job training program, especially for management positions,” for members of the tribe. It also alleges that the firm failed to offer the Indians the chance to build their own bingo hall, and instead hired a private contractor to build the hall, which cost $3.3 million. American Management even failed to conduct competitive bidding in awarding the construction project, the lawsuit states.

The suit alleges that American Management not only failed to pay its share of “reasonable operating expenses” but also incurred debts on the bingo operation without the tribe’s approval.

Other allegations state that American Management “has maintained more than two accounts for the financial operations of the tribe’s bingo business,” failed to prepare monthly statements of net operating profits, and failed to prepare annual operating budgets for the tribe’s review.

The tribe will sue for specific monetary damages once that figure is determined, the suit says.

In the suit, Bunce asks that the court declare the contract null and void, that the tribe be freed of any debts incurred by American Management in connection with the bingo games or the bingo hall’s construction, and that American Management employees be told they have no access to the bingo hall, its equipment and the bingo books and records.

The suit says it is the tribe’s intention to negotiate a new bingo management contract with another firm so the games can resume.

Since the bingo games on the Barona Reservation were halted last month, the Sycuan Indians east of El Cajon have been the only Indians in San Diego County to offer the high-stakes games, with some payoffs in the tens of thousands of dollars.

The Rincon Indians have announced their intention to resume their bingo games on May 31. A previous management company cited financial problems and stopped the games last June on that reservation.