Bicycle Club Seizure Fails to Shake Faith of City Leaders

When George Graham Hardie first came to Bell Gardens with lofty plans to build the world’s largest card club, some residents dourly predicted that a gambling palace would bring about the moral disintegration of the community.

Now, at least one doomsayer is saying, “I told you so.”

Federal authorities seized the club last week, after four men were convicted of a complex racketeering scheme that involved investing drug-smuggling profits in several ventures, including the club.

“I always said that this would happen,” said the Rev. Jack Showers, pastor of First Baptist Church. Showers was a member of Citizens Against Gambling, which was formed in 1982 to oppose a ballot measure to legalize gambling in the city.

Showers acknowledges that the Bicycle Club has not had the negative impact he thought it might, but said, “Gambling always brings unsavory characters.”

Authorities seized the Bicycle Club after a three-month federal trial in Miami of four men, including a Los Angeles developer who was a partner in the group that owns a controlling interest of the club. The jury found that the four laundered drug profits through an extensive array of bank accounts and dummy corporations from Los Angeles to Liechtenstein. The drug profits were spent on a small fleet of boats, a corporate jet, condominiums and an $11-million investment in the Bicycle Club, according to federal authorities.

A federal judge promptly ordered the city to take control of the club, and ordered all profits frozen and placed in a special fund, until he can sort out which investors knew that drug profits were invested in the club and which did not. Hardie was allowed to remain in his position as general manager.

The club is owned by two general partnerships--LCP Associates and Park Place Associates. Michael Gilbert, one of the men convicted of racketeering, is a limited partner in LCP Associates, which has a 65% interest in the club. Hardie owns a controlling interest in Park Place Associates, which owns the remaining 35%.

Hardie and city leaders dismissed the naysayers, and said the seizure is just a paper transaction. City Manager Claude Booker said the seizure has not besmirched the reputation of the city or the club, which he called the “cleanest” around.

“No one in the club had any suspicions,” he said. “(The convictions) don’t have anything to do with Hardie. He is just an innocent victim and I think the judge’s order to allow him to remain general manager is proof of that.”

Hardie said he is sure he will be allowed to retain his share of the club.

Hardie, who testified for the government during the trial of the four men, has said he did not know drug money was used to build the club. He said he thought he was dealing with a reputable developer when the late Samuel Gilbert bought the land and helped build the poker palace in return for a controlling interest. Gilbert was indicted in 1987, along with his son, Michael, in connection with the drug laundering case. Samuel Gilbert died four days before federal authorities announced that he had been indicted.

Also found guilty of racketeering last Thursday were Benjamin Barry Kramer, a convicted drug smuggler; his father, Jack Kramer, and Miami attorney Melvin Kessler.

Hardie first approached Bell Gardens city leaders with plans to build the club on the northwest corner of Eastern and Florence avenues in 1982. He had been denied a license in neighboring Bell four years earlier. When he carted his plans across the 710 Freeway to Bell Gardens, Booker said, there was a great deal of concern among residents that a card casino would bring crime.

Two groups, one supporting gambling as a way to bolster city revenues, and the other condemning it, campaigned heavily before a special election to decide whether gambling should be legalized. Hardie helped finance the pro-gambling group, which spent an estimated $22,000 at the time.

The measure passed overwhelmingly, and the city has not looked back.

Today, the Bicycle Club offers several versions of poker and has expanded to add more Chinese card games. It offers valet parking, a beauty parlor, pastry shop and giant television screens that broadcast sports events to the players’ content. The Bicycle Club has been more successful than city leaders could have predicted, Booker said.

Booker said that when the club was built in 1984, officials predicted it would generate $1.2 million to $2 million a year in revenue for the city.

Two months after the club opened, the city was receiving the maximum 13.2% of all revenues exceeding $1.6 million. The club’s revenues now total about $100 million a year, yielding an average of about $10 million a year for the city, Booker said.

Booker said he attributes the club’s success to four things: “Location, location, location and George Hardie.”

The club, perched just off the Florence Avenue exit of the Long Beach (710) Freeway, attracts passers-by with Las Vegas-style lights. At more than 81,000 square feet, it stands out like a crown jewel in the city’s landscape.

Booker praised Hardie for hiring a security staff of 65 to keep the club free of disruptions. He also said Hardie has made the club a success with such innovations as card tournaments that bring in thousands of gamblers.

“I get more complaints about my Building Department and Police Department than the club,” Booker said.

The Bicycle Club has not been the first card club in the Southeast to be named in a criminal case. In 1985, three former city councilmen in Commerce pleaded guilty to bribery and racketeering charges stemming from a scheme to give officials secret shares in the California Commerce Club.

In neighboring Bell, a former city councilman and a former city administrator were among several who either pleaded guilty or were convicted of fraud charges in a similar effort to secretly obtain majority ownership of the now-defunct California Bell Club.