Casino Owner Faces Strong Opposition

A long-simmering battle over a casino in Los Angeles County’s tiniest city has reached a critical phase as the state Gambling Control Commission weighs whether to grant the card club’s controversial owner, Dr. Irving I. Moskowitz, a permanent gaming license.

Moskowitz, a reclusive Miami Beach multimillionaire, runs a gaming empire in the one-square-mile city of Hawaiian Gardens. He bankrolls local charities, and his gambling revenues help keep the city solvent. But critics say he has co-opted City Hall and, overseas, has undermined the Middle East peace process by using his wealth to promote Jewish settlement in Arab-populated areas of Israel.

Moskowitz’s application, state officials say, has generated the strongest opposition in the commission’s three-year history. Hearings for pornographer Larry Flynt’s Hustler Casino in Gardena drew nary a peep of protest, but the Moskowitz hearings have been contentious affairs, with critics and supporters clashing in emotional exchanges that veered from gaming and local issues to debates over biblical teachings and Middle East politics.

“I want you to be on the side of God,” said Max Kessler to the three commissioners, echoing the views of some of Moskowitz’s supporters that the issue transcends local politics. “The return of the Jewish people is above and beyond history.”

Actor Ed Asner said residents have lost control of the city to the physician-turned-developer.

“I ask the commission to let Hawaiian Gardens go free,” said Asner, who is part of a coalition of peace and local activists contending that Moskowitz’s application should be denied because he has broken disclosure laws and is undermining the Israeli peace process.

Moskowitz, 75, has not attended the two hearings at the Ronald Reagan State Office Building in downtown Los Angeles. The hearings have drawn dozens of supporters and critics, including rabbis, law enforcement officials and politicians. Moskowitz was represented by his son, David, and his attorney, Beryl Weiner.

The commission is expected to take up the matter again at a meeting in February. They can vote to approve or deny the application, or request more investigation.

Moskowitz’s tent-shaped Hawaiian Gardens Casino houses more than 100 tables and is the largest employer in the southeast Los Angeles County city. Its licensing fees make up 73% of the city’s $9.5-million annual budget.

The controversy comes as the commission is working to wrap up the final applications from casino owners seeking permanent licenses. Most of the state’s 99 card clubs, including Flynt’s, have upgraded their temporary provisional licenses to permanent ones after their owners were cleared in background checks by the state attorney general’s office. The Gambling Control Act, which created the commission, requires all owners to seek permanent licenses.

Moskowitz has been cleared by what the attorney general’s office calls the most in-depth probe of any casino owner.

But some are urging the commission, which has approved owners cleared in the background checks, to take a closer look at Moskowitz.

The challenge to his application does not affect his ownership of a foundation that runs a bingo parlor next to the casino.

The casino is one of 11 card clubs in the state that would be able to offer slot machines under a voter initiative that owners are trying to place on the November ballot. The initiative, if passed, could end Indian tribes’ monopoly on Nevada-style gaming in California, and the Hawaiian Gardens casino could have up to 1,900 slot machines.

At the heart of the licensing dispute is a disagreement over whether Moskowitz is a person of “good character, honesty and integrity,” as required by state law.

Supporters portray Moskowitz as a savvy businessman with a social conscience. They say Moskowitz, who lost 120 relatives in the Holocaust, spends his money on charities dear to his heart, both in Jerusalem and Hawaiian Gardens.

“Without the doctor ... we couldn’t be a city,” said Hawaiian Gardens Mayor Betty Schultze during a December hearing.

But to critics, Moskowitz poses a threat to the two cities.

In Jerusalem, where Moskowitz, an Orthodox Jew, purchases land in Arab-populated areas, critics say he “pours gasoline” on the tinderbox of Middle East politics by moving Israeli settlers onto his properties.

In Hawaiian Gardens, one of the county’s poorest cities, they say Moskowitz controls the city through manipulation and electoral chicanery.

Beyond character issues, critics say Moskowitz’s operation runs afoul of many provisions in the Gambling Control Act, which, among other things, prohibits casino owners from meddling in elections, and requires all owners to disclose their partners or potential partners.

Moskowitz has been under state scrutiny in the past. In 2000, a state joint legislative audit committee concluded that Moskowitz and the city appeared to have broken state laws prohibiting the use of redevelopment funds for gaming purposes.

The report encouraged local and federal authorities to probe possible corruption, and concluded that Moskowitz should give back $12 million of city funds used to subsidize the casino.

“Hawaiian Gardens provides an example of what can go wrong when redevelopment is manipulated or used for the benefit of one individual rather than for the benefit of the community as a whole,” the report said.

Moskowitz and the city, which demanded a halt to the report’s distribution, denied any illegalities. They said the development agreement between the city and Moskowitz was reached before the 1996 law went into effect. Moskowitz did not return the $12 million.

Chief among critics’ other complaints is the casino’s location near a hospital, church and school. The casino is one of the few in the state next to a school. Critics point out that state officials can deny a license to a casino near such facilities.

Other allegations involve the 1995 election that led to the approval of gaming in the city. Moskowitz, according to the state report, spent nearly $550,000 on the campaign. Critics say the spending violated a law prohibiting gaming interests from altering a local election.

A former Hawaiian Gardens police chief, Walter McKinney, accused Moskowitz at the December hearing of enlisting local gang members to work in the campaign. The former head of a local social services agency, Ray Rosas, tearfully testified at the same hearing that gang members intimidated him for opposing the initiative, and that Moskowitz destroyed his agency by pulling funding from his bingo foundation.

Moskowitz’s critics also say he lied on his gaming application by not disclosing that in the 1990s he had been in negotiations with other owners to sell them a 25% interest in the casino.

Moskowitz’s supporters react to such accusations with a mix of angry denials and sobering statistics.

Hawaiian Gardens, they say, could go bankrupt and more than 1,000 people would lose their jobs if the casino closed.

And they emphasize that the attorney general’s office has investigated every allegation -- by their count as many as 50 -- and found no reason not to recommend a permanent license.

The accusations, they say, are fueled by people who don’t live in Hawaiian Gardens, and who oppose Moskowitz for his religious and political views.

Weiner, Moskowitz’s attorney, said he did not know if profits from the casino are going to Israel. Such information is private, he said. He said some profits from Moskowitz’s bingo parlor, which is run by a nonprofit foundation, go to causes in the Middle East, but not to “extremist” groups. Weiner said all of Moskowitz’s donations go to nonprofits considered legitimate by the Internal Revenue Service.

Weiner said other profits from the bingo operation -- estimated at $3 million to $4 million per year -- have gone to fund scholarships, food banks and other social programs in Hawaiian Gardens.

“He has the right to make contributions to whomever he chooses,” Weiner said.

But opponents say it boils down to character, and that money from a small California city should not be used to destabilize Israeli peace negotiations.

“For sure, it is not what I, as a Californian, think that we should be doing,” said Scott Wildman, a former state Assemblyman on the legislative committee that requested the report.

Times staff writer Hector Becerra contributed to this report.