SPECIAL REPORT A Tale Of Two Cities


Hawaiian Gardens, Calif.: Francelia Morales, a 36-year-old Mexican immigrant living in a roach-infested, leaky apartment with mildewed walls, has been thinking a lot about the crisis in the Middle East lately.

"I feel a link to the Palestinians I never knew before," she said as she sat with her husband and three children amid the cardboard storage boxes, children’s toys and English-language instruction video cassettes that crowd her small living room.

Her neighbor from just a few doors down feels similarly.

"I feel like I understand what the Palestinians are going through," nodded Arturo Perez. "It’s the same thing like what we are going through here."

Like 16 other families in this row of clapboard apartment units set on a narrow asphalt alleyway outside Los Angeles, the Morales and Perez families have received 30-day eviction notices from their landlord, Dr. Irving I. Moskowitz, the controversial right-wing Jerusalem developer who emerged last week at the center of the Israeli-Palestinian crisis. But unlike most of them, the Morales and Perez families, and three others, are defying him.

"I’ll find another apartment when they give us the relocation money we deserve under the law," said Emilio Gomez, one of the other holdouts. Like his comrades, Gomez rejected the $600 Moskowitz’s son-in-law offered each family when he came around last June with their eviction notices, if they left within three weeks.

But most of the other families have left without a fight because they also work for Moskowitz as "volunteers" at the not-for-profit Bingo Club he operates. Its vast parking lot starts just opposite their asphalt alleyway. And until their eviction, the sporadic tips they made from the winners among the hundreds who flock there nightly helped pay the $500-per-month rent Moskowitz charged them for the ramshackle apartments. The units were cited this month by the Los Angeles County Department of Health Services for numerous health code violations.

"They told us we have to move because if we didn’t we would be fired," said one of those who left, a young woman whose family is now living with two other ousted families in a three-bedroom apartment nearby. The modest house, which rents for $1,000 a month, shelters 14 adults and children. Still fearing trouble, the woman asked that her name not be used.

Moskowitz is the diminutive 69-year-old physician from Miami whose housing developments for Jews in sensitive, heavily populated Arab neighborhoods of East Jerusalem have caused an international uproar. Repeated messages left for Moskowitz’s local representative, attorney Beryl Weiner, were not returned.

But to an important degree, his Bingo Club and other activities in this tiny, cash-poor city of 14,000 (the smallest incorporated municipality in California) have provided much revenue for his Mideast real estate ventures. And though his powder-keg development activities in Jerusalem may dwarf his operations here in import, the two remain deeply intertwined, as Morales and Perez have only recently, to their surprise, realized.

Pipeline To Jerusalem

Owned by the Irving I. Moskowitz Foundation, a nonprofit organization established in 1968, the Hawaiian Gardens Bingo Club has taken in some $30 million a year in tax-free gross revenue and helps to finance some of the Mideast’s most controversial land ventures. Last week saw the soft-spoken, private U.S. citizen negotiating with the prime minister of Israel over Ras al-Amud, the hot spot he owns in the middle of an Arab neighborhood in East Jerusalem and funds out of his own pocket.

Moskowitz backed down only partially when Benjamin Netanyahu pleaded with him to forego his plans to move Jews into a housing complex there. Moskowitz reportedly has been a major financial backer of Netanyahu, Jerusalem Mayor Ehud Olmert and Avigdor Kahalani, Israel’s internal security minister. He also funds yeshivas and groups asserting the right of Jews to live anywhere in Israel.

While many criticize Moskowitz for interfering in the volatile Mideast peace process, his supporters, particularly in the Orthodox community, praise his efforts to reclaim all of Jerusalem for Jews. "He’s a champion, a hero in my eyes," says Dr. Joseph Frager, president of the American Friends of Ateret Cohanim, which supports Jewish land purchases in Jerusalem.

"I’m doing the natural thing for a Jew," Moskowitz told the Los Angeles Times last year, trying to "save our nation."

In 1994, the last year for which tax returns could be obtained, the foundation, which gets its bingo license from Hawaiian Gardens, sank $264,000 into the community while sending $2.4 million to various causes Moskowitz backs in Israel. (Moskowitz has reportedly poured some $18 million in all to right-wing causes in Israel.) The most prominent of these recipients was Ateret Cohanim, a Jerusalem yeshiva with a declared goal of buying up properties in the Arab sections of the Old City, evicting the Arab residents and moving in Jews. Moskowitz gave it $576,000 that year.

Still, there is no question that since 1994 Moskowitz has significantly boosted contributions to numerous Hawaiian Garden charities, ranging from a local food pantry to the Hawaiian Gardens Little League. In fact, through its grants to two other foundations Moskowitz has set up, the Moskowitz Foundation funded this year more than half of Hawaiian Gardens city government budget, covering basic municipal services like police and recreation.

As a result, Hawaiian Gardens is a city literally living on charity, doled out at Moskowitz’s discretion.Sgt. Ray Gilmore, the president of the local police union, says he realized this when he found himself negotiating his force’s labor contract not with any elected official, or official appointee, but with Weiner, Moskowitz’s attorney.

Though the city manager sat across the table from him, said Gilmore, he called Weiner to get approval for every detail and had Gilmore himself fax the draft agreement to Weiner for final approval.

"This is a unique city," said Gilmore. "Its financial woes have made all of us dependent on someone no one here elected."

Now, however, Moskowitz stands on the verge of initiating a much larger, for-profit gambling venture in Hawaiian Gardens, one expected to gross three times what the Bingo Club takes in. But suddenly, a hornet’s nest of problems has swarmed around the doctor’s long-laid plans. These holdout immigrant families, who refuse to budge from part of the land on which he plans to build his new club, are but one of the challenges he faces.

Another is the Internal Revenue Service. Since May at least, the IRS has been conducting an intensive probe of Moskowitz’s not-for-profit bingo operation. Agents have conducted interviews with a variety of local residents, and from their questions, it appears they suspect Moskowitz may be using his foundation’s revenues for illegitimate political purposes. Non-profit foundations like his are prohibited by law from engaging in political activities.

So far, the tax investigators are concentrating on Moskowitz’s local dealings. But they are clearly interested in how he is using his tax-exempt money in Israel, as well.

Bingo Club officials have told the local press that such scrutiny is not unusual for a nonprofit agency. But any problems the agents find could affect Moskowitz’s ability to get final approval of his state gaming license.

Meanwhile, this city’s long love affair with Moskowitz appears to be ending. And the feeling seems to be mutual.

Four years ago, Moskowitz persuaded city officials to acquire for him the site that is to become the new card club despite what critics derided as sweetheart terms. He persuaded them to buy the land from the previous owners for $5.5 million, using the threat of eminent domain, and sell it to him at half that price. Later, he got them to agree to charge him an upfront commission fee of just $25,000 for a non-negotiable 25-year contract, when up to $2 million for 10 years is the norm in comparable localities.

In return for this and more, he provided his largesse to the groups he favored, including the police, using the Bingo Club funds and his personal discretion.

But this month, for reasons no one is sure of, Moskowitz has abruptly stopped his charity to the municipality. His attorney, Weiner, has complained bitterly of waste and padding. And there are many here who agree. But now desperate city officials have turned on Moskowitz, too. Last week, they invited another card club operator to come into town and accepted $300,000 from the firm as the initial down payment on a negotiated $500,000 license fee.

It is a given that two such clubs could not survive so close together.

‘There Are Two Sides Of Him’

The story behind this state of affairs is a Byzantine one. But in many ways it displays some of the same central ingredients that characterize Moskowitz’s more volatile work in the Middle East: land expropriations and claims of ruined lives; personal negotiations with government officials who reportedly have received large Moskowitz campaign donations; a deeply felt, paternalistic generosity to grateful recipients; and a ruthless, take-no-prisoners response to anyone who opposes him.

"We all admired him here," said Kathleen Nevejas, a former Hawaiian Gardens mayor and City Council member. "But it turns out there are two sides of him. He can be so magnanimous in one of his guises, when you are dependent and need his help. But when you stand up against him, he has no conscience."

As for the huge sums of tax-free money he took from Hawaiian Gardens and sent to the Middle East, she said, "We had no idea. We just thought he had a commitment to religious organizations. It was after the prime minister [Yitzchak Rabin] was killed that we began to put two and two together.

"It’s so similar; he doesn’t live here, either. And he does what he does in both places with all this money we give him, with our bingo license."

That bingo license was awarded to Moskowitz in 1988 after its previous holder left town under threat of indictment. A physician who says he lost 120 relatives in the Holocaust, Moskowitz made his fortune after earning his medical degree at the University of Wisconsin by starting a chain of for-profit hospitals in Southern California in the 1960s. The successful doctor struck most folks as a fatherly figure with good business sense. His Moskowitz Foundation, already established, also seemed a ready-made vehicle for the legal requirements of bingo in California.

Under state law, only not-for-profit foundations may be given such licenses, on the principle that bingo clubs are meant as fund-raising devices for local charitable enterprises, such as churches or schools. Many operate only a few days a week for limited hours.

But Moskowitz turned his into something else altogether: the largest-grossing bingo club in the state. Open 363 days a year (it’s closed on Dec. 25 and 26) the Bingo Club draws hundreds every night from all over the area for what its management bills proudly as "the fastest game in town."

Smoke-Filled Bingo Hall

First you see the sign, a palm tree logo next to the words that say simply The Bingo Club. Then you see the cars turning in from the bland ribbon of a highway that cuts through the one square mile of Hawaiian Gardens in the blink of an eye.

Once inside, the cigarette smoke is overwhelming, totally enveloping the No Smoking sign hanging over one of the tables. Standing up front, the caller barks out new numbers in a relentless monotone, and with shouts of "Bingo" coming quickly, a new game starts every three minutes or so. Customers at long rows of tables in the large room slap down a dollar for every new game, which is snapped up by the so-called volunteers such as those who lived in the nearby apartment row. These volunteers also pass out new game sheets.

State law strictly limits the number of actual employees bingo clubs may hire, based on the principle that they are local and nonprofit in character. The question of these low-income workers’ actual status is now under state and federal investigation.

In the meantime, however, the games continue. The take from each one appears to average about $500. Winners receive $250, which is shared if there is more than one. And there are 120 to 200 games per night. That means a house take of some $30,000 to $50,000 a night.

"No one could believe this not-for-profit was grossing $30 million a year," said Nelson Oliva, a former Hawaiian Gardens city manager who began to study the club’s numbers.

Dream Of Higher Profits

If Moskowitz succeeds in getting his for-profit card club off the ground, that enterprise is expected to pull in some $100 million per year. And Hawaiian Gardens, a postage stamp-sized island of poverty and high crime surrounded by affluent Los Angeles suburbs with gated communities, has been salivating at the thought of the jobs and revenue the card club could bring.

Moskowitz’s generous contributions to keep the city afloat these last few years has certainly helped smooth the way, as have his large campaign contributions to various elected officials and referenda on the card club. During the November ’95 voter referendum on approving his card club, for example (a vote required by law) Moskowitz spent nearly $600,000 to fight off opponents, winning the ballot with less than 1,000 votes, spending almost $600 per vote.

There were no expensive TV buys to make in this tiny town; according to the measure’s opponents, much of the money simply went to putting scores of people on the payroll of his pro-casino campaign group, thereby winning their loyalty and that of their often low-income families.

According to some, Moskowitz has also deployed his bingo charity fund grants with a readiness to reward and punish civic activists according to their support for his project.

The Coalition for Youth Development, for example, was initiated by Moskowitz with a grand flourish in 1993 as a multi-service social agency offering counseling, parenting and literacy classes, computer training and more to a town sorely in need of it. But according to its board members, when the center insisted on staying neutral in the casino referendum, Moskowitz’s attorney made no secret of his anger. Soon after, Moskowitz’s support was stopped.

"He was very derogatory," said Ray Rosas, the coalition’s executive director, speaking of Weiner. "He’d use foul language, calling me an a–, saying, who the hell are you?"

Moskowitz has used his clout to obtain what critics consider a giveaway deal on the terms of the proposed casino itself.

The half-price sale was not in and of itself necessarily bad, said Oliva, Hawaiian Gardens city manager at the time. The 10-acre parcel adjoining his Bingo Club was a piece of real estate the city’s redevelopment agency felt was not being put to productive use by the jumble of shops there.

But according to Oliva, who negotiated the deal, Moskowitz received such good terms because he told the city he planned to bring not a casino to the site but a Wal-Mart-sized food market. The deal given to him was based on the earnings that he could expect from such an enterprise, not the huge profits that come with casinos.

To this day, Oliva believes the deal had every appearance of being genuine.

But Lupe Cabrera, today the mayor of Hawaiian Gardens and then a council member who voted to approve it, said, "That was a pretext. [We] always knew it was going to be a casino, even though no one would admit it."

Meanwhile, the old business tenants forced off the property have yet to be paid promised relocation or lost business costs, despite Moskowitz’s commitment in the agreement to share the costs with the city: and despite court orders instructing the city, at least, to do so.

"We were just totally ruined," said David Downen, a Suzuki motorcycle dealer forced off the site he and his father had been at since 1958. He and his wife, Marion, are still waiting for much of his compensation. "They [Moskowitz and the city] took my business against my will and made me their involuntary lender," he said.

In another case, more than $200,000 worth of equipment being stored by a meat market on its old site was taken by Moskowitz’s employees.

It was two years later, after the purported food market deal fell through, that Moskowitz openly called for a casino on his property, and sponsored a voter referendum to get it approved. If the casino were approved, he told voters, the revenue generated would ensure that the city’s popular, newly formed police force would never want for funds. That alone would cover the city’s single largest expense.

But though he touted it repeatedly in his campaign literature, this commitment was not put in the referendum measure. And this week, with Moskowitz’s personal charity to the force halted, the cash-strapped city will vote to disband the force.

"He double-crossed us," said Cabrera, the mayor, referring to clauses in the property agreement he said Moskowitz had violated. Others believe, however, that one way or another, Moskowitz will move to save his long-nurtured investment in a bigger, more prosperous gaming establishment: if only for the sake of Jerusalem.

"Wouldn’t you like to own a city?" asked Fred Woocher, an attorney for the main local group that opposed the deal with Moskowitz. "And not just a city with a bingo club, but a gaming ordinance passed by the voters making your city one of only five to be able to do this?"