O.C. Rich Lode for Charity Swindlers : Fund-raising: Every one of its 31 cities has a different ordinance to control those seeking donations. As a result, enforcement is practically nil.

Now that the starving Somalians are on the news every night, let’s cash in.

We’ll register with the state as a commercial fund-raising company. Big deal. We don’t have to report our activities for a year.

Then we’ll call people on the phone and tell them about the need for compassion and quick action to save all those starving children. We won’t mention a specific charity, just a vague cause.

We won’t ask for much--$15 or $20--but we’ll say we prefer cash. We’ll send messengers over to their home so we can pick it up fast. We’ll give some part of it, maybe a tenth, to the United Nations or somebody and keep the rest ourselves. Or we can keep it all and just move out of town.

Such unethical or downright illegal fund-raising is so common in Orange County that legitimate charities are suffering, says charity consultant Bonnie S. Gillman of Santa Ana. “Orange County is the crown jewels for every sleazebag around.”

In Los Angeles, ordinances require fund-raisers to register before they start soliciting, then report afterward. Commercial fund-raisers must have a city license that can be denied or revoked if they engage in fraud. Cards giving basic information about the charity and fund-raiser must accompany all literature. The enforcer, the city Social Service Department, has a $600,000 budget and a staff of 14 to answer queries and investigate complaints. A toll-free phone number makes it easy for anyone to check on the solicitor who has just called.

But in Orange County, which is cut up into 31 cities, it’s a different story.

“If you try to report something, good luck,” says Gay Geiser-Sandoval, who used to prosecute such violations for the Orange County District Attorney. “Every city has its own ordinance. Some are very stringent and some of them aren’t. In most jurisdictions, it’s not much different than a business license. It’s not like anyone’s verifying the information.

“And they may or may not be enforced. Just trying to report a suspicion of a problem is almost impossible.”

Peter K. Shack of the state attorney general’s charitable trust section cautiously confirms Orange County’s status as easy pickings: “It’s my impression--and it’s purely an impression--that more (questionable fund-raising) comes out of Orange County than other places.”

Not that it’s all that difficult anywhere in California, he says. State law “is full of holes. We try to plug the gaps, but it’s very tough. Semi-sleazeballs can make a very fine living by doing this legally. If I was a crook, I could operate on the margin of legality and no one would ever prosecute me.”

To start with, there aren’t that many investigators and prosecutors. Shack says the state has only six attorneys to handle such cases statewide, and these cases are difficult and expensive to litigate. “One case can tie up one or two people for a year or more,” as is expected in the suit filed last month by the state against Mitchell Gold and his Irvine fund-raising firm, Orange County Charitable Services. (The state alleges fraud, saying the firm raised $8 million and gave less than 5% of it to charity. Gold denies any fraud. “We are licensed. We are legal. We are bonded. . . . And no charity has complained.”)

Local district attorneys seldom get involved, Shack says. “Their help would be welcome, but they have their budget problems and priorities. I mean, these solicitors are not shooting you.”

The Orange County District Attorney has two attorneys assigned to the broad field of consumer protection. They do file suits in some fund-raising cases. Earlier this month, they settled with Tri County Associates of Santa Ana, whom they had accused of calling Latinos and Vietnamese and saying they’d get better police and fire service if they contributed. Tri County denied doing that but agreed not to do it in the future.

Yet “we can’t look at all complaints,” says Bob Gannon, chief of the unit. “It’s not a large part of our caseload. We could very easily be buried.”

It was after prosecuting such a case in 1988 that Geiser-Sandoval and the charity experts she had consulted decided to clean up Orange County’s act. They formed Charities for Truth in Giving, and Gillman became the organization’s director. Their goal: Have uniform fund-raising regulations passed countywide and create a central bureau to receive complaints and answer questions by phone.

They have been lobbying city and county officials with the story of what’s really going on out there.

Commercial firms contract with charities and other organizations to do their fund-raising for them, but the firms keep part of what they raise as their fees.

Each year, the firms must report to the state how much they turned over to their clients, but there’s little risk in fudging. The reports are not audited.

Still, the firms on the average reported keeping two-thirds of the $94 million they raised in 1990. In 87 cases where a total of $13.8 million was raised, firms turned over 10% or less of the take. In 10 cases, they turned over nothing.

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Do they fear prosecution? Hardly. One of the organizations receiving nothing, though $289,970.36 was raised, was the San Bernardino Sheriff’s Employee Benefit Assn.

Soliciting for police and fire organizations is popular, Gillman says, probably because it’s easy to imply that you’ll get “special service” if you’re on the list of donors.

“(Tustin Police Chief W. Douglas) Franks is on my board because of one of these scams. They called a businessman, and he decided it would make an even better impression if he took the money down to the police station in person. When Franks heard about it, he hit the ceiling.”

“The Tustin Police Department does not solicit funds,” says Franks.

Likewise, Jerry Pierson, president of the Orange County Deputy Sheriff’s Assn., is on Gillman’s board. His group used professional fund-raising for a while.

“It’s been four years since we did it, and we will never do it again,” Pierson said. “But fund-raisers still use our name. I don’t know what we can do about it. We and some other departments ran an ad after we found out fund-raisers were working the Vietnamese and Hispanic areas. These people come from countries with a different kind of law enforcement. Solicitors were telling them they’d have trouble if they didn’t contribute, and they were believing it.”

Groups agree to commercial fund-raising because “it’s no pain and no strain,” says Shack. “They come to you with a deal: Sign a contract and you’re guaranteed, say, $10,000 a year--and you have to do nothing. You don’t realize you’re getting only 10% of what’s raised.”

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A law that required fund-raisers to tell donors how much of their donation actually goes to the charity was struck down by the U.S. Supreme Court in 1988. The court ruled that since it’s basically a charitable activity, it’s protected as free speech.

New laws taking effect next month will try to fill the gap. The commercial firms will have to tell donors that they are commercial firms. And if donors ask for information, solicitors must answer truthfully.

These laws will have little effect on the out-and-out crooks--those who solicit for “look-alike” charities, then take the money and run. “They can do jail time, but it’s really hard to catch them. They’re really mobile,” says Shack.

Also sophisticated. They collect by messenger. They avoid any use of mail, because mail fraud is a stiff federal offense and postal investigators are aggressive. They prefer a telephone “boiler room” and may locate it outside the state receiving their calls. That confuses the legal jurisdiction and makes witnesses harder to gather. And if investigators get too close, the boiler room can be emptied forever in minutes.

“People in Orange County are generous,” but they are not angry enough, says Gillman. She wants people to call police, prosecutors, city councils and county supervisors to demand action.

Legitimate charities are afraid that fund-raising scandals will turn donors off completely.

“I was helping a campaign in Orange County, a big charity that was selling an item for fund-raising. Two former volunteers split off and started making a look-alike item and look-alike brochures and got to our established donors before we did,” Gillman says.

But the charity said nothing publicly. “If you sound the alarm, people at home have both brochures, and they can’t tell which is the right one. So they say, ‘Let’s write a check to Jerry’s Kids and forget about it.’ We lose both ways.”

Several of Orange County’s children’s charities went public, however, when soliciting to buy tickets became popular.

According to Gillman, professional fund-raisers would call asking people to help buy tickets to take disadvantaged children to a circus or show and also benefit children’s charities. But the fund-raisers would often simply send a few tickets to the charities, sometimes for events the fund-raisers themselves arranged. “Like they’d hire a juggler and he’d perform in some room for awhile,” she says.

The answer, most everyone agrees, is the usual one: educating the public. Gillman’s task force wants everyone to learn the scent of sleaze. “It’s not necessarily the unsophisticated who are taken,” says Geiser-Sandoval. “You wouldn’t believe the number of attorneys and doctors.”

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After previous lobbying failures, the task force feels it now has a feasible plan. It’s proposing a uniform ordinance for county and all cities that would require fund-raisers to register with one, centralized office and pay a registration fee. The fee would pay for a telephone bureau that would accept and route complaints. More importantly, people would have one local phone number to get information on a fund-raiser and his track record.

Gillman says major local charities are strongly behind the plan. The major problem is getting 31 city councils and the Board of Supervisors to adopt a uniform ordinance. So far, the local League of California Cities has assigned an attorney to the task, and County Supervisor Harriett M. Wieder has forwarded the proposal to the County Counsel.

Gillman says her task force went to Wieder because she was involved with Los Angeles’ fund-raising ordinance when she was an aide to then-Mayor Sam Yorty.

“I’d say they’re maybe a third of the way there, maybe a little more,” Wieder says. “I think the way they’re proposing it this time, it has a better chance.

“It was never considered a priority. There was never enough money. And they couldn’t decide where to put it--Social Services, the D.A.? If they come back with anything that’s feasible, I will bring it to the board. It would be justifiable, and if someone else pays for it--a user fee--all the better.”

Gillman says she’s hoping for some public outrage before it’s too late. “My main concern is that reputable charities are hurting and some may wind up closing down. Who’s going to pay for those services when the charities don’t?

“The recession, the United Way scandal, stories in local papers about people embezzling from charities, being sued by the state--if we don’t have a means to verify, people will just stop giving. A lot of them already have.”

How to Give Wisely in Orange County

* When solicited, don’t give on impulse. Mailing a check directly to the charity is always most effective.

* Request the name, address and phone number of the charity that will benefit. Then call to confirm that the fund-raising is legitimate.

* Ask for details. Are they volunteers or professionals? How much of your donation will go to the charity? Will they send printed materials?

* Don’t allow messengers to pick up your donation. It is often a tactic to avoid violating postal laws.

* Always donate by check. Never give cash or your credit card number.

* Want to complain? One place to call is Ronald McDonald House of Orange County, (714) 639-3600, which will send you a form.

Source: Charities for Truth in Giving