Sports Foundation Asked for a Financial Accounting

A sports foundation organized by a prominent Newport Beach businessman has not complied with state requirements that it account for donations and expenditures but continues to raise money with its annual $100-a-plate banquet, according to foundation and government officials.

The Orange County Sport Celebrities Foundation, which has not filed required financial disclosure reports with the state since 1980, will hold the banquet, an all-male affair that regularly draws hundreds of prominent business and sports figures, next Tuesday.

Money collected is turned over to local junior colleges and universities, foundation officials said. The dinner raised $23,430 in 1980, the last year for which a report is on file with the state. Tickets worth an estimated $45,000 have been sold for this year’s banquet.

No wrongdoing by the foundation or its officials has been alleged, but the failure to report has been a cause of concern to state and federal officials. The California Franchise Tax Board stripped the foundation of its not-for-profit status in 1984, the same year that the Internal Revenue Service revoked the group’s tax-exempt status. And on Sept. 15, state Atty. Gen. John K. Van de Kamp ordered the foundation’s directors to provide financial records for 1981-87 and warned of potential financial penalties for “this violation of the law.”

All organizations that meet the legal requirements to call themselves “not-for-profit” and collect $25,000 or more annually are required to file disclosure documents with the attorney general’s office and the Internal Revenue Service. If an organization loses tax-exempt status, it becomes liable for corporate taxes and donations are no longer tax-deductible.

Paul Salata, the former University of Southern California football star and pro football player who is the founder of the group, said he was unaware of the 7-year reporting lapse. He said he could not say how much money is donated to college athletic programs and individual athletes.

“That’s not my function,” said Salata, 62, now a director of the foundation. “I just assumed that the papers had been filed.”

Asked who was responsible for maintaining financial records and apprising the state, Salata said: “I suppose one of the officers has that responsibility. None of the people whose money it is has inquired.”

Foundation board member and treasurer Marcus Woods, owner of the Irvine accounting firm of Woods & Associates, said that he has internal financial statements dating to 1980 and that the state filing requirements can be met.

“My understanding is that this is not a problem if we file the forms,” Woods said Monday. “Once we file, we should get tax-exempt status retroactively.”

Notification of the loss of tax-exempt status did not reach Woods until late 1986 because he had changed firms and moved offices several times, he said. Following recent inquiries, Woods said he found some of the uncompleted forms in his files. IRS filings for 1982-84 remain unaccounted for, but internal financial documents for those years provide the necessary information, he said.

The foundation board includes among its directors a Who’s Who of leading business and sports figures. Board members include the athletic directors of Chapman College and Cal State Fullerton, athletic department officials from Rancho Santiago College and UC Irvine, and coaches from Orange Coast College and Fullerton College.

Salata said the group’s Sportsman of the Year banquet--which features a dozen sports celebrities and Salata as the emcee-roaster--always includes an oral accounting of donations, athletic grants and expenditures. The dinner, which has honored such athletic figures as tennis player Rod Laver, Olympic diver Dr. Sammy Lee and Baseball Commissioner Peter Ueberroth, is an annual sellout, Salata said.

‘Gentlemen Only’

Attendance at the banquet is restricted by a line on the invitation that states, “Gentlemen only, please.” Salata attributes the success of the dinner, held at the Saddleback Travelodge in Santa Ana, in part to the men-only stipulation.

“It’s a boy’s night out because we can raise the most money that way,” Salata said. “The same banquet that will draw 600 under the boy’s-night-out theory will draw (only) half as many (as a dinner for) couples. It’s not exactly a PTA meeting, but it’s not X-rated either. The guys drink and so forth. It’s fun.”

Foundation treasurer Woods responded to the order by Van de Kamp by telephone on Sept. 21, saying that he thought the necessary documents had been filed and would check foundation records, according to Larry W. Campbell, registrar of charitable trusts in the attorney general’s office. Woods has not yet provided the required information, Campbell said.

“Our concern is to make sure that assets are properly administered,” Campbell said. “When you are not getting any reports at all, you are not sure what has occurred. The problem is usually not fraud, it’s usually carelessness and negligence.”

Woods said Monday that he thought the required documents had been filed by his employees until he received the Sept. 15 letter.

“We’ll be submitting something in the next couple of days to the state,” Woods said Monday.

College, Pro Player

Salata, the second of seven boys whose father died when he was 12 years old, attended the University of Southern California on a football scholarship. After college, he played for the San Francisco 49ers, was traded to the Baltimore Colts, then to the Pittsburgh Steelers, and played another 3 years in the Canadian football league.

After ending his professional football career in 1953, Salata worked briefly as an office manager for a Los Angeles construction firm and then found his vocation--sales. He sold building materials for another firm for 16 years before launching El Toro Materials, a sand, gravel and clay-tile supply firm 2 decades ago

Although he jokingly describes himself as a “sewer contractor,” Salata is now a wealthy business owner with diverse investments. Saying “I don’t have to prove anything,” he conducts business at the Balboa Bay Club wearing khaki pants, sports shirts and a Donald Duck digital watch.

A governor of the Balboa Bay Club and a member of the Lincoln Club, a group of prominent Republicans, Salata is known as a mover in the “SC Mafia”--a network of USC graduates that includes judges, bankers, developers and politicians--and never misses a football game at his alma mater. He contributes generously to Republican campaigns and is so prominent politically and socially that he is often called upon to escort the state’s first lady, Gloria Deukmejian, to partisan functions in Orange County, according to county GOP Chairman Thomas A. Fuentes.

“He is a hands-on people mover,” Fuentes said. “He rallies people, he energizes community leaders for philanthropic causes as much as for the Republican Committee of Orange County. He is a good check writer for any worthy cause. And his involvement lends credibility to any candidate or cause he becomes involved with.”

Despite his far-flung business dealings, social and political associations, Salata is best known as a master of ceremonies. He is in such great demand as an emcee that he formed Sports Depot, a one-man speakers bureau. In his “heyday” 10 or 20 years ago, Salata estimates that he roasted and toasted at 100 charity, sports and professional banquets a year. Nowadays, he limits his appearances to about 30 a year.

“As a businessman, he is a very tough man with a very sharp pencil,” said Assemblyman Gil Ferguson, (R-Newport Beach), a college friend and powerful ally. “As a social person, he’s the epitome of a politician--gregarious, outgoing. And as a civic person, he is extremely generous with his checkbook and his time.

“As an emcee, he can get away with things that anybody else would get stoned for. He was once speaking before a Mexican-American group when several people got up to leave. He said, ‘All those guys are leaving because Pancho’s got the jumper cables.’ He brought the house down.”

Salata, who has been speaking at sports banquets since he was student body president at Franklin High School in Los Angeles, said his early forays as an emcee were intended, in part, to boost his sales contacts. Incorporation of the Orange County Sports Celebrities in 1971, however, was his effort to “give something back. I’m a red-neck conservative. You take care of your own, and you don’t expect the government to do it.”

The banquet format has become a model for others. Instead of single sports star as the draw, Salata fills the dais with a dozen celebrities and “interviews” them from the microphone. He doesn’t risk the success of the evening on a single speaker who may be a dud, and as master of ceremonies, he retains control over the pace and the program. Over the years, Salata himself has become a draw.

“I think everybody needs somebody like Paul Salata to make life more fun,” Ferguson said, “except when you are the brunt of his jokes.”

Grants Are Down

Grants from the foundation to universities and junior colleges have decreased in recent years. According to records provided to The Times by Woods, the gifts have risen and fallen with the foundation’s income. In 1984, when Ueberroth was honored, the banquet produced a net profit of $36,198 and awards totaling $21,000 were distributed. But the following year, when Greg Louganis was honored as Sportsman of the Year, the banquet profit was $21,180 and $16,250 in grants were distributed.

Athletic officials said the money was helpful to their programs.

Dick Van Voorhis, athletic director at Cypress College, said grants to that college ranged from $1,500 to $2,000 until last year, when the amount dropped to $1,250. Van Voorhis and other college officials contacted said the money is most useful because is not committed in advance for a specific expenditure.

“We use the grants for meal money for our athletes when they travel, sports shoes, extra money for uniforms,” Van Voorhis said. “Every now and then, someone comes up with a big need, and this gives me some flexibility.”

Walt Bowman, director of athletics at Chapman College and a director of the Sports Celebrities foundation, said: “During the first years, we received about $1,000. One year it was $2,000, but in the last couple it has gone down to around $1,700.”

Bowman estimated that his college has received about $12,000 in the last 8 years, money it has used for men’s and women’s sports programs. He said the money was particularly important to a private school such as Chapman.

Salata says he will continue the sports benefit but protests that he has been the target of “feminists” who object to the stag nature of the event. While his initial goal was to bring in as much money for grants as possible, the popularity of the event has grown beyond his expectations, and he has raised the ticket price while keeping a lid of 450 on attendance.

“The banquet is the only reason we exist,” Salata said. “We use the money to help people who really need it.”

FOUNDATION BOARD OF DIRECTORS

The Orange County Sport Celebrities Foundation provided the following list Monday of its board of directors: Buck Bean, Santa Margarita Co. Bob Blakley, photographer. Dr. Walter Bowman, Chapman College athletic director. Don Brown, Parkville Financial Services. Al Brownell, First West Realty. Ed Carroll, Cal State Fullerton athletics director. Don Clark, Prudential Overall Supply. Bruce Gelker, Saddleback Travel. Richard Gorrie, Rancho Santiago College athletic department Roger Hobbs, Century American (a building contractor). Robert F. Hoyt, First American Title Insurance Co. John Hurlbut, attorney, Ruttan & Tucker. Jack Nix, Manufacturers Financial Services. Tim Paone, Paone, Callahan, McHolm & Winton law firm. Bob Pomeroy, associate director of athletics, UC Irvine. Mike Rae, Orange Coast College, assistant football coach. Dan Rogers, Lee & Assoc. Real Estate. Robert Rohrer, Gelker & Rohrer Insurance. Paul Salata, president El Toro Materials. Rich Saul, Fidelity National Title Insurance. Hal Sherbeck, football coach, Fullerton College. Rod Sherman, Management & Sports Marketing Inc. Jim Valentine, Coldwell Banker. Michael Watkins, Professional Sports Planners. Marcus J. Woods, Woods & Assoc. accounting firm.