A Poorly Played Hand

At a congressional subcommittee hearing last week, officials of the U.S. Marshals Service acknowledged that mistakes had been made in management practices at the Bicycle Club, a Bell Gardens card casino partly owned by the federal government and run by a federal trustee. Fixes, they promised, are underway. Yet after six controversial years in charge of the casino, the government would do well to cut its losses and get out of the card club business altogether. Indeed, federal officials could have saved themselves grief had they sold the government’s share in the prompt manner called for under Justice Department asset forfeiture guidelines.

Washington seized control of one-third of the Bicycle Club in 1990 when it was determined the project had been financed with $12 million in laundered Florida drug money. Oversight fell to the U.S. Justice Department.

Government involvement should have cleaned up the operation. But Douglas Sparkes, the club’s head of security, testified before the Senate permanent subcommittee on investigations that skimming, cheating, stealing and payoffs had drained the club of revenues during the government’s tenure. Federal trustee Harry J. Richard denied the charge, attributing a drop in profits to competition from other casinos.

Whatever the truth, it is apparent that Richard did not fulfill his primary mission as a trustee--to move with dispatch to sell the government’s share of the Bicycle Club to the highest bidder. What’s more, records show Richard spent a share of government profits on political campaigns against rival casinos. And for this he was rewarded with an increase in salary and bonuses, rising from $116,000 in 1993 to $322,000 last year.

Richard’s foot-dragging is obvious. A less clear but more important issue is why nobody in Washington was leaning on him to unload the property. The U.S. Marshals Service, which runs the program for the Justice Department, now says it is tightening management procedures for business assets like the Bicycle Club, assets that represent only a small percentage of the government’s $2 billion in seized property. That’s encouraging. Justice and Treasury ought to be motivated by this sorry episode to take a hard look at the way seized assets are managed. Six years is too long for the government to be dealing cards.