FOUNTAIN VALLEY : Independent Hearing Due on Bingo Permit

The City Council has agreed to hire an independent hearing officer to determine whether a nonprofit group that is under investigation by the state attorney general’s office should be allowed to renew its permit to host bingo games.

The hearing, which will cost the city $3,000 to $5,000, was scheduled after Amateur Sports Training Facilities appealed City Manager Raymond H. Kromer’s refusal to renew its permit. The Fountain Valley-based organization raises money for athletes and athletic groups.

No date has been set for the hearing, said City Atty. Alan R. Burns.

Kromer, in refusing to renew the group’s permit, cited charges made by Atty. Gen. Daniel E. Lungren’s office.

In a complaint filed in February, Lungren’s office charged that the organization commingled its bingo proceeds with other funds in violation of state law. The attorney general also contends that the organization used bingo proceeds to pay salaries, also in violation of state bingo laws.

The organization’s attorney, Thomas E. Walley, acknowledged in a letter to Deputy Atty. Gen. James Cordi “that past improprieties have occurred” but added that Amateur Sports Training Facilities had “made adjustments as a result of the attorney general’s investigation.”

Walley, in a telephone interview, said, “We’ve corrected everything that the state had a problem with.”

State Auditor Paul Ng, who is investigating the case, charged that Amateur Sports Training Facilities paid salaries totaling $723,690 to 15 people who worked on bingo games in 1992.

The state audit also determined that of nearly $2.4 million in revenue, the organization donated only 11% to athletes and athletic organizations. Kromer noted that the donations of $262,720 were not much more than the $202,000 salary of the organization’s president, James Remmey.

“When combined with other salaries paid, it appears as though the dominant purpose (of the organization) was to pay substantial salaries to individuals, and not to help athletes,” Kromer wrote.

Kromer charged that the salaries paid to certain individuals were “excessive, unfair and illegal.”

Walley said there are no laws regulating how much money must be donated to a charity. He added that in the past four years, the organization has donated more than $2 million to charity.

The organization has been granted an annual city bingo permit since August, 1989, when the first permit was issued. Bingo permits must be renewed by the city annually. Five other organizations in the city hold bingo permits.

Walley said the organization is continuing to hold bingo games until the hearing officer decides the case.

The city allows bingo games for charitable purposes. State law allows only certain nonprofit corporations to conduct bingo games. Only security personnel may be paid salaries from bingo game proceeds, which must be kept separate from other money that a group takes in. Bingo game profits must be used for charitable purposes.

Walley said that as of March, the organization had complied with state and city bingo laws.

In the organization’s application for an appeal, Walley charged that “there is no evidence that any bingo monies have paid any salaries in 1994” or that the organization has violated bingo game laws.

“Our intent has always been to be in compliance,” Walley said.