Number Could Be Up for Bingo Hall : Charity: The founder of the Woodland Hills games denies diverting money. She says she will shut down after clearing her name.

The tables in the cavernous bingo hall at Identity Inc. in Woodland Hills are mostly empty. Bingo nights that once drew 800 players are fetching fewer than 250.

Presiding over the decline on a recent evening is the “Queen of Bingo,” Edith Ryan, the embattled founder of a charity for the physically disabled.

Lower income and government investigations into her operation signal that her reign as Los Angeles’ biggest bingo operator may be nearing an end.

The charity and its 64-year-old founder face accusations by ex-associates that thousands of dollars in player fees were diverted from the charity on bingo nights.

And, for the second time in six years, the city is seeking to revoke the charity’s bingo license, based on allegations that Ryan illegally paid bingo-game operators who by law are supposed to be volunteers. Hearings continued before a city administrative hearing officer last week.

Ryan vigorously denies any wrongdoing but said she will close her charity, Identity Inc., after clearing her name. “Who will be the loser then?” she asked tearfully. “The city’s crippled and poor.”

The eight-year saga of the bingo queen tells of repeated clashes with city officials. The details include a minor police scandal, bitter betrayals by longtime associates and even a shoe box filled with a fortune in gold.

Most of all, it is about Ryan, whose gruffness and aggressiveness were forged during the Depression, when she was one of seven children being reared by a widow.

Ryan left Akron, Ohio, to start a new life in Canoga Park after her second marriage ended in 1978. She brought a dream of starting a charity for the handicapped, born years earlier when her 11-year-old stepson, Shawn Ryan, was permanently disabled in a car accident.

She also said she brought a shoe box filled with gold hoarded for a decade. It was worth more than $750,000 after the price of gold skyrocketed in the early 1980s, she says.

After buying a four-bedroom house in what is now West Hills, Ryan established Identity in 1979 simply by filing papers with the California secretary of state. But Identity languished while she joined a singles group, enrolled at Pierce College and took a $120-a-week job with Prudential Insurance.

(Ryan said she already had a bachelor’s degree in psychology from Akron University in Ohio and enrolled at Pierce to build up her confidence. But Akron has no record of her graduation.)

In her spare time, Ryan said, she fruitlessly pursued funding for Identity. “We were spinning our wheels. Every direction we turned we were told there was no money.”

Los Angeles voters legalized bingo for charity in 1976. She saw that the game could save the organization. To qualify for a license, Ryan got tax-exempt status for Identity and paid the city a $50 fee.

The charity opened its doors to bingo players in February, 1982, and promptly lost more than $2,000 that month. But there was reason for optimism: Bingo is popular in the San Fernando Valley. About half the money wagered on bingo in the city is spent in the Valley, though only 30 of the city’s 75 bingo games are here.

Each Valley player typically spends $45 to $50 a night, about $10 more than others in Southern California.

“There’s just a tremendous gambling instinct in the Valley,” said Don Carrier, publisher of the Bingo Bugler, a monthly newspaper based in Sun Valley.

By the end of 1982, Identity was making enough for Ryan to quit her clerical job and draw a salary from the charity. It reported a profit for charity of about $6,000 a month.

By the end of 1983, Identity had moved to a larger hall where as many as 800 people played 100 games a night, and the profit was as high as $86,700 a month.

Big prizes were one of the attractions. City figures show that 77% of Identity’s $29-million gross income over the eight years went for prizes.

The game grew into the city’s most successful. Its income represented fully 9% of the total gross of all games in Los Angeles.

It also attracted the eye of the city’s chief bingo regulator.

Ryan was helped by John Defino, a supplier of game equipment. “I learned everything I know about the game from him,” she said. “He was my mentor.”

Defino was not as highly regarded by city officials. In early 1984 they shut down his bingo game at Mary Immaculate Church in Pacoima on the grounds Defino broke the law by working there. State law prohibits suppliers or anyone else with a financial interest in bingo from working at games.

When Defino turned up at Identity as a volunteer game caller, his presence aroused the suspicions of Robert Burns, general manager of the city’s Social Service Department, which regulates bingo.

Burns revoked Identity’s license in 1984, citing Defino’s involvement as both supplier and caller at Ryan’s games and Ryan’s use of bingo proceeds to pay insurance premiums for five employees, also a state violation.

Ryan appealed in court, arguing that she had purchased supplies from Defino’s son and did not know he was related to her game caller. The license was restored by a Superior Court judge who called Burns’ revocation order “excessively harsh, abusive and arbitrary.” The judge also ruled that it is legal to pay insurance premiums out of bingo proceeds.

“I took it in the shorts,” Burns said of the case.

What followed has been six years of clashes between the regulator and the queen. The fight has helped shape the way the game is played in Los Angeles.

Burns urged the City Council to pass two regulations that Ryan said have crippled her charity financially. The first, passed in 1988, restricts bingo operators to 40 games a night. A year later, the council limited the number of players to 350 per session.

Burns, in defending the restrictions, said big operations were hard to police and unfair competition for little ones.

The competition has steadily driven up the prize pot, eroding the share for charity. In 1980, Los Angeles bingo operators spent 71% of their gross receipts on prizes, Burns says. By this year, the figure was 80%.

Burns lays the trend at Ryan’s door.

“Edith simply ran the highest-powered game in town, and that put pressure on all licensees to increase the size of their prizes,” he said.

Ryan says Identity spent $65,000 in legal fees to fight the new regulations. It had to scale back its charitable services when they took effect, she said.

Using bingo proceeds, Identity had been offering counseling and physical therapy at the De Soto Avenue facility where the bingo hall is located. Its files contain records of 138 clients served since 1985. It also gave money to programs for the disabled, such as a wheelchair basketball team.

Tim Staats, director of the UCLA Prosthetics Education Program, said that after 1988 Identity stopped paying for artificial limbs for disabled people who could not afford them. Nancy Berry, a counselor with the state Department of Rehabilitation, referred clients to Identity until Ryan began turning them down.

Identity’s financial crunch and Ryan’s lobbying against the new regulations were overshadowed this summer by at least three investigations of Identity.

Four former Identity bingo workers who had been involved with the games since their start told city officials that for years they had been illegally paid for their work. Burns’ current attempt to revoke Identity’s license is based on that charge. The hearing before an administrative judge recessed last week until Nov. 30.

Two of the workers also said in affidavits that records from one of two tables at which bingo cards were sold were routinely destroyed on Ryan’s orders and the income was not reported.

One of the volunteers, Cindy Houseman, said that an estimated $25,000 was diverted during one three-day period in July.

Los Angeles police investigators are looking into the workers’ claim.

In another investigation, Los Angeles Police Department internal affairs detectives are seeking to determine if several officers who worked off duty as security guards at Identity bingo games knew of any illegal handling of money. Last week, the department revoked permits allowing officers to work at all bingo games in Los Angeles.

The state attorney general’s office, which monitors bingo operations, is also investigating the allegations of financial improprieties.

Ryan has denied any wrongdoing and has sought to discredit the workers who have turned against her by calling them thieves. She said the bad publicity has caused a further drop in attendance at Identity’s games.

Few local charity organizations sympathize with Identity. An official of a Valley charity who asked not to be identified said “this whole thing gives legitimate bingo a bad name.”

Ryan said she is a victim of Burns, who she claimed is pursuing a vendetta partly because of his embarrassing failed attack in 1984.

“Burns is an unmitigated pathological liar--he sits up there like he’s the Gestapo,” Ryan said. “Here’s a city official who should have no ax to grind, no personal motive, trying to destroy a legitimate charity.”

Some people familiar with Ryan say her personality may be part of her problem.

“Edith is gravelly,” Staats of UCLA said. “She is a no-nonsense person. I’ve wondered if someone had a vendetta against her. Edith sometimes rubs people the wrong way.”

Burns, a 28-year Civil Service bureaucrat who earns about $71,000 annually, called Ryan’s charge that he is vindictive preposterous.

“What is true,” he said, “is that after the department was unsuccessful in revoking Identity’s license I continued to remain suspicious of Identity in view of the continued assortment of rumors and speculation that have circulated within the bingo community.”

Burns also said he is motivated by concerns over what he believes is the relatively low level of charitable services Identity provides. He questions whether a charity that takes in about $1 million a year should serve only a handful of people.

The law sets no minimum percentage of revenue which a charity must use on philanthropy. The U.S. Supreme Court has ruled that such legislation is unconstitutional, said Deputy Atty. Gen. James Cordi, whose office is investigating Identity.

Identity’s 1988 federal tax form, the most recent available in full, shows that 29% of the organization’s $1.3 million in expenses went for direct charitable services. Included were physical therapy, social work, transportation and the costs of running a since-closed Woodland Hills house for the disabled.

The rest of the money went for operational expenses such as salaries, including Ryan’s of $39,000, and the $60,000 annual rent for the bingo hall. Expenses also included city bingo fees of about $42,000 or 1% of the gross bingo receipts minus $5,000 a month.

Ryan acknowledged that Identity now serves only about 15 clients and has been forced by high operating costs to close its four-bedroom house for the disabled in Woodland Hills.

To save the charity, Ryan said she has personally loaned Identity $200,000 in the last three years. She said she also is using her own money to pay the legal tab on the latest license battle with the city.

Ryan, who now makes $52,000 as Identity’s executive director, said there was still some gold left and she took out a second mortgage on her house.

In an interview, Ryan’s mood alternated between distress and battle-hardened determination.

At one point, she vowed to win. At another, she said she is burned out.

“When this is over, I will close Identity,” she said. “But not until I prove everything is right. I have gone through more abuse than anybody should expect. . . . Where they should be putting me on a pedestal, they want to put me on a stake.”