U.S.-Run Casino Faces State Charges

The state Fair Political Practices Commission has filed a 922-count complaint against a Bell Gardens casino partially owned by the federal government, accusing the card club of concealing its role in several election campaigns aimed at blocking potential competitors.

If the Bicycle Club and its staff of political consultants are found liable on all counts, the FPPC could impose a record $1.84-million fine, officials said. The complaint contains the most counts ever filed against an organization in the 23-year history of California’s political reform law.

The state action is an embarrassment to the U.S. Justice Department, which owns 36% of the casino and has overseen its operations since 1990 when the club was seized during the course of a money-laundering case.

The FPPC complaint arose after a series of elections in 1995, when more than a dozen California cities were scrambling to hold balloting to decide whether to allow card clubs before a moratorium on new clubs took effect Jan. 1, 1996.

State investigators said the Bicycle Club spent more than $1 million to oppose casino plans in those cities. The Bicycle Club organized and financed campaign committees that sent political mailers warning voters that a card club would attract loan sharks and would addict residents to gambling, investigators said.

Although the casino’s involvement in political campaigns is legal, FPPC investigators found that campaign committees financed by the Bicycle Club failed to disclose that relationship. Among the targets of the accusation is the casino’s top political consultant, Jerry Westlund, who was indicted last month for allegedly embezzling $380,000 of campaign funds.

Of eight cities that considered new casinos on their 1995 ballots, only one voted to allow them. Similar ballot measures have failed in seven other cities since 1993 in campaigns where the Bicycle Club financed the opposition, investigators said.

“The scheme was simple and consistent,” FPPC general counsel Steven Churchwell said in the complaint. The casino first created “shell committees” to hide its identity, then pumped money into the committee, allowing one to siphon the money to others. When voters received mailers from such organizations as Concerned Taxpayers of California, with no mention of the Bicycle Club, they could not know the true source of the opposition, he said.

Harry Richard, a former Las Vegas casino executive who ran the casino for the U.S. Marshals Service during the Bicycle Club’s heaviest involvement in political campaigns, has not been charged in the FPPC complaint, nor has any federal employee. The Marshals Service has said that its asset managers told Richard to stop making political contributions in late 1995, but that he disregarded their instructions.

While the complaint is pending, the FPPC is scheduled to consider on Jan. 15 a $414,000 default judgment against the casino’s eight political committees.

Former casino manager George G. Hardie and four others are named in the accusation. Hardie, who founded the Bicycle Club in 1984 and served as its manager before he was ousted in 1994, contends that the FPPC is seeking to blame him because it doesn’t want to pursue the federal government.

“They trumpet the record fine, then they don’t go after the people who were actually [overseeing] these activities,” said Hardie’s attorney, Frederic D. Woocher. He also said that the FPPC had “overcharged” the targets of the investigation, and noted that many of the counts are not for direct violations, but aiding and abetting.

The case, which will be argued before the commission, involves twice as many counts as the FPPC’s second-largest complaint, taken against an anti-gun control organization that unsuccessfully worked to recall former state Sen. David Roberti in 1994. The agency imposed a $808,000 fine in that case.

“The question is, as a technical matter, should they have been reported as sponsored committees?” Woocher said. “That’s something George left to the others. They’ve got these sort of bizarre, technical violations. Let’s see what the fine is at the end of the case.”