Sports Kids Explains Its Insolvency and Defends the Past of 2 Executives

Officials of embattled Sports Kids on Wednesday explained why their nonprofit organization is insolvent and canceling its summer games in Mexico, and they defended two key executives who have been been charged with crimes in the past.

During a lengthy news conference at the group’s headquarters at the Holiday Inn Irvine, founder Bob Mathias, an Olympic decathlon winner, and other officials discussed allegations leveled against them and their organization, which promotes the development of children through sports, fitness and friendship.

“We have tried to do everything right,” Mathias said. “We haven’t done anything wrong. We were the victims. They might accuse us of being stupid for falling for this thing. . .,” he said, “but our reputations are intact.”

Series of Controversies

The group, which planned to hold Olympics-type events in Tijuana next month for children from 40 countries, has been the subject of a series of controversies, including the failure of a Texas businessman to deliver a promised $5 million; disclosures that the organization was out of money; that Chuck Foster, chairman of Sports Kids, and Paul Stemm, vice president, had both faced criminal charges; and that it owed $80,000 to former Irvine City Councilman C. David Baker, who performed part of his court-ordered community service there after his conviction last year of check forgery.

Baker, an unsuccessful congressional candidate, ultimately accepted a full-time job with Sports Kids but left in April.

“We are going to make sure we have the money in the bank,” Mathias said. “This year, we assumed it was in the bank. We got burned.”

He was referring to Houston businessman Michael A.S. Makris who promised Sports Kids up to $25 million over five years to fund its program. The first payment never arrived and Mathias’ group was left without any money to hold the Mexico games, scheduled to begin Aug. 13.

Doubts He Had Money

Makris told The Times last week that he would donate $5 million to Sports Kids if Foster would leave the group. But Mathias said Wednesday he now believes that Makris never had the resources that he promised Sports Kids.

Foster said he was prosecuted in 1978 in Los Angeles County for allegedly setting fire to a mobile home to collect insurance money. But, Foster said, there was no insurance on the mobile home and after the circumstances were explained to a judge, the case was dismissed.

“And as I sit here, I am not a convicted criminal,” Foster said, adding that the fraud case was the result of a government campaign to get him to cooperate in another “sensitive and unrelated” investigation.

Foster also explained why he changed his name from Charles K. Ferguson to Chuck Foster. He said he did not do it to avoid anyone but to “accommodate a request” of his ex-wife to use her last name. “She was adopted, and her name meant a lot,” he added.

Named in Civil Suit

Foster said he was named in a civil suit stemming from an event that he promoted at Glen Helen Regional Park in San Bernardino County in the fall of 1986. The event was called the “Million Dollar Mile.” The winner of the drag race never got the $1 million he was promised. Foster said the main sponsor refused to come up with the money, which was to be paid to the winning driver over 50 years.

Stemm, 55, of Laguna Hills said he served 15 months at the federal minimum-security prison at Lompoc, and his sentence ended in November after he spent six weeks in a halfway house.

He said he pleaded guilty to one count of conspiracy because he could no longer afford to defend himself in the lengthy case in Kansas City, Kan. His indictment was part of a cosmetics-promotion scheme that allegedly defrauded 27,000 investors out of $80 million.

Stemm said he was indicted in the case because he was an attorney representing one of the companies. He said he never got any money from the promotion.

Foster and Mathias said that Stemm disclosed his conviction when he came looking for a job.

“He (Stemm) said he, too, was tired of dealing with grown-ups and would like to have a breath of fresh air. He said he loved what we were doing and wanted to do something worthwhile,” Foster said, adding:

“There is no legal or moral reason why he couldn’t work for us.”

In another areas, Foster said:

*The organization raised about $180,000 for an Olympics-style event which was held last year at UC Irvine. Some of the donors for that event have said they thought they were giving to a nonprofit group. But Foster said he has never represented Sports Kids as a nonprofit organization. In fact, he said, attorneys are now putting together the paper work to make Sports Kids nonprofit and tax-exempt.

*Foster said that in 18 months with Sports Kids, he has received $15,219 from the organization, including reimbursement of gas and telephone bills on his personal credit cards.

*The organization has received $222,952 in loans, grants and sponsor fees since its inception. Records show that it has a $5 deficit in its checking account and has current liabilities of $550,000, nearly $400,000 of which are listed as salaries due.