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California bingo and card club’s Middle East connection

To hear critics tell it, Dr. Irving Moskowitz uses funds from his California
bingo hall–staffed by unpaid, predominantly Latino workers–to fund millions
of dollars worth of controversial settlements in Israel, while leveraging
his local philanthropy to all but control the small southern California city
of Hawaiian Gardens.

In August of 2004, this bingo king, who spent more than $2.1 million backing
a failed 2004 initiative to allow the state’s card clubs to have slot
machines, was granted a permanent license by the Gambling Control Commission
to operate one of the state’s largest card clubs–right next door to the
controversial bingo parlor.

The story begins eighteen years ago in California’s smallest city, a
thumbnail sized nine-tenths of a square mile town with a predominantly
Latino population of 15,000, and an average yearly income that hovers above
$10,000, according to the latest census data.

In 1988, the local charity bingo hall faced closure as criminal charges were
brought against the then-operator. The city government of Hawaiian Gardens
turned to local hospital owner Irving Moskowitz, who has lived in Miami
Beach since 1980, to take over the parlor on behalf of his Irving I.
Moskowitz Foundation. California law requires all bingo proceeds go to
nonprofits.

He obliged and never looked back.

Today, the Hawaiian Gardens Bingo Club–the largest non-tribal parlor in the
state–is no ordinary bingo hall. Between 1997 and 2003, tax records show
that the parlor brought in more than $200 million in revenues and doled out
just shy of $37 million in charitable giving. At the end of 2003, the
charitable foundation funded by the bingo hall had more than $46 million in
assets, and only $900 in liabilities.

Bingo in Hawaiian Gardens is advertised as “the fastest game in town.”

Because state law prohibits high bingo jackpots, Moskowitz simply runs more
games. A new bingo number is called out every four seconds, and a game lasts
only minutes.

Then it starts again. Seven days a week.

By the early 1990s, the bingo hall was generating upwards of $30 million in
annual revenues.

It’s hardly all profit. In 2003, the year of the latest available tax
filings, the bingo hall pulled in more than $29 million in revenue, but gave
away $20 million in prizes.

Some of the profits go to local charities. The foundation gave more than
$2.9 million to the city’s food bank between 1997 and 2003 and regularly
supports local sports programs. The foundation recently donated
half-a-million to open a new library.

“I think he has been pretty good for the city,” says current Hawaiian
Gardens Mayor Leonard Chaidez. “He’s kept the city afloat.”

But much of the bingo windfall ends up thousands of miles away in Israel,
buying controversial property, building Israeli developments in Arab
neighborhoods and supporting militant pro-Israel organizations. Millions
have poured into hard-line pro-Israel groups, including more than $5.5
million given to the American Friends of Ateret Cohanim over fifteen years
and $7 million to the American Friends of Mercaz Harav Kook in 1997 alone.

Also in 1997, bingo riches helped several Jewish families move into a
property in Ras al-Amud, an Arab neighborhood of East Jerusalem. One U.S.
State Department official called Moskowitz’s action “a lightening rod for an
increase in tensions” and “counterproductive” to the peace process.

“Moskowitz, like a real estate tycoon turned practitioner of Lao Tzu’s Art
of War, is using property as a weapon in his quest to convert Jerusalem into
an exclusively Jewish city,” said Rabbi Haim Dov Beliak, one of Moskowitz’s
most vocal critics and founder of the Coalition for Justice in Hawaiian
Gardens and Jerusalem, in a 2003 report.

Last April, Moskowitz led a mission of American Jewish leaders to the Gaza
Strip. Wearing an orange baseball cap that read “Jews Don’t Expel Jews,”
Moskowitz was joined by Morton Klein, president of the Zionist Organization
of America, whose group has received more than $200,0000 from the Moskowtiz
foundation since 1997.

The mission’s goal was to drum up opposition to the planned Israeli
withdrawal from the Gaza Strip. According to media reports, the group’s
spokesman said that Moskowitz promised financial assistance to settlers that
resisted the evacuation.

The parlor’s operations have also come under scrunity.

California law requires not only that bingo proceeds go to charity, but also
that bingo halls be staffed by volunteer workers. In 2000, the Mexican
American Legal Defense and Educational Fund brought a class-action lawsuit
against the Moskowitz bingo hall on behalf of 24 workers, most of whom are
Latinos, that are paid no wages and earn only tips while selling bingo
cards.

This week, a MALDEF spokeswoman would only say that “the matter had been
resolved,” refusing any additional comment. The multi-million dollar bingo
hall continues to be staffed by volunteers.

The Hawaiian Gardens bingo parlor has also landed in the crosshairs of
legislation introduced by Sen. Richard Polanco, a Democrat, in 2001. His
bill would have placed bingo under the control of the state’s Gambling
Control Commission–charging the commission with the task of ensuring bingo
operations followed legal requirements and that all proceeds went to
charity.

But various provisions of the bill targeted Moskowitz in particular. One
provision would have prohibited bingo money from being handled by security
forces, a common practice at the heavily secured Hawaiian Gardens bingo
hall. Another provision prohibited the use of bingo funds for charitable
purposes outside of California. A third limited bingo operations to three
days a week.

Moskowitz spent $134,000 in lobbying fees to defeat the measure, and a
second bingo-regulating bill introduced by Polanco the next year.

Neither bill ever made it to a floor vote.

The lobbying was not the only political dollars Moskowitz has spent in
Sacramento. In 2004, he shelled out $2.1 million to push a failed initiative
to allow card clubs to operate slot machines, though nearly $250,000 was
returned unused. Moskowitz also gave the California Democratic Party $25,000
in 2003 recall, and has given $3,200 to former Assembly Speaker Herb Wesson,
current Speaker Fabian Nunez, Senate President Don Perata and Assemblyman
Jerome Horton, who chairs the gambling-regulating Governmental Organization
committee.

Now, the centerpiece of Moskowitz’s gambling empire is the Hawaiian Gardens
Casino, a Vegas-style card room that, at most recent count, had 1675
employees and 180 tables. It is the fasting growing card room in the
state–with plans to expand to a massive 190,000 square-foot structure with
300 tables at the end of next year, which would make it California’s largest
non-tribal casino.

But Moskowitz’s critics say the casino was borne of convoluted dealings and
questionable transactions.

The card club opened in December 1997 with five tables in a temporary
structure–slipping “under the wire,” as Mayor Chaidez put it, as the last
card club to open in California before a statewide moratorium went into
effect in January 1998.

Moskowitz first bought the land of the future card club in the mid 1990s for
half of what it had cost the city of Hawaiian Gardens to condemn it. Around
the same time, Moskowitz was sending the city $200,000 per month to help
keep the town solvent.

Moskowitz’s lawyer, Beryl Weiner, represented both the city’s redevelopment
agency and Moskowitz in the transaction. Originally, the land was slated for
a new supermarket, but soon after the sale the city held a Moskowitz-backed
special election to allow a card club on the site.

Moskowitz spent $540,000 on the cont
est–in a city of only 15,000. Local
officials that opposed the casino were eventually recalled, resigned or were
beaten in the following election.

Weiner, Moskowitz’s attorney, has pointed out that the casino
opponents–mainly other large local card clubs–spent similar sums of money
during the election.

But in a 2000 report by then-Assemblyman Scott Wildman, a Democrat who
chaired the powerful Joint Legislative Audit Committee, found that “the
majority of funds were apparently spent employing or otherwise paying a
number of city voters.”

The report went on to blast the original land deal citing, “numerous
instances where the city and agency have accommodated the private interests
of Moskowitz and Weiner at the expense of citizens and taxpayers.”
Wildman’s report said the city’s $12 million in redevelopment money
“illegally subsidized” the Moskowitz casino.

But Mayor Chaidez, who was the city administrator during the original casino
battle, says the redevelopment funds were an excellent investment.

“Yes, we used some of the redevelopment money to spur that enterprise,” says
Chaidez. “That project turned out to be the fastest payback project in the
state of California.”

Controversy aside, the casino quickly grew after its 1997 opening. Now with
180 tables and poker’s surging popularity, club executives are projecting
$85 million in revenues this year.

That translates to almost $10 million in tax receipts for Hawaiian Gardens.
Mayor Chaidez says last month the card club sent the city a check for
$930,000–nearly 80 percent of the city’s general fund budget, according to
the casino. That means improved schools, improved facilities, and a bigger
police force, says the mayor.

“I am not a councilman over in Israel or Jerusalem,” he says. “I am a
councilman in Hawaiian Gardens”

But the Coalition for Justice in Hawaiian Gardens and Jerusalem, armed with
the Wildman report and the then-pending MALDEF lawsuit, continued to
pressure the state’s Gambling Control Commission to deny Moskowitz a
permanent license.

“Our position has been that if the commission licenses this operator, who is
so bad that they won’t license,” said coalition co-director Jane Hunter.
Ultimately, the commission rejected the arguments against Moskowitz and
granted a permanent license in August of 2004, unanimously renewing it last
August.

“Based on the background investigation of the Division of Gambling Control
and the requirements of the Gambling Control Act, there was no ground to
deny the licensing application,” said commission spokeswoman Anna Carr.

So, one dollar at a time, the big-time revenues continue to pour into the
bingo parlor and card club California’s smallest city. And because the card
club is a private business, Moskowitz is not required to report where his
$85 million-a-year in revenues are going.

“We don’t even know how much money he is using from the card club from these
causes because he doesn’t have to disclose that,” laments Hunter.


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