CUDAHY — City officials, expressing concern about the potential for hidden ownership interests, have asked the developer of the proposed Silver Saddle Casino to explain how he financed the $637,500 purchase of land and a building for the poker parlor.
But Charles King, president of Tanlo Inc., has said he will not divulge details of the deal, which involves a two-acre site in an industrial section of south Cudahy.
City Manager Gerald Caton, acting under a city ordinance, asked the card club promoter to reveal how he bought the land and whether he sold interest points in Tanlo to raise funds for the purchase.
The city's gambling ordinance requires that the city approve interest holders in a card club. King and his wife, Anna, are listed in city records as the sole financial interest holders in Tanlo.
"I'm not anticipating any problems," Caton said in an interview. "I just think the question has to be asked as to the source of the money he used."
Won't Disclose Sale Details
King insisted there are no hidden ownership interests in the card club, but said he did not want to disclose any details of the land sale because he considers it a private business transaction. He also questioned if Caton has the power to make such a request without the approval of the council.
"My business is my business," King said. "I have honored in the past and will honor in the future every regulation of the city."
Councilman John Robertson, however, told King during a council session Monday that city officials have "a right to know where that money came from."
Robertson, referring to a recent card club scandal in Bell, said he is concerned about the city becoming embroiled in a controversy involving "hidden ownership interests" in the Silver Saddle Casino.
Two former city officials in Bell and a front man who held their hidden interests in a card club there pleaded guilty in September, 1984, to participating in a scheme to deceive and defraud the city and state.
"I don't understand the need for secrecy," Robertson said. "I think the time has come for the disclosure of the financial package."
"I've complied with the letter of the law," King countered. "It's always been a concern of mine to keep everything aboveboard and honest."
City Atty. Glenn Watson said the city manager has the power under the city's gambling ordinance to ask King to release financial information on the transaction. If King refuses to reveal details of the deal, the matter would go before the council, he said.
Mayor Faye Dunlap and Councilmen Lynwood Evans and Gabe Zippi have steadfastly backed King--and showed no indication this week of wavering.
Evans said Robertson's questions about financing of the land purchase were "just the usual rhetoric." Dunlap, too, said she was not concerned about the deal.
"I've been for this card club from the very beginning," Dunlap said after the meeting. "And I'm going to stay to the end."
With the help of his council supporters, King scored a victory Monday, receiving permission to offer pai gow, a complex betting game played with domino-like tiles. The council voted 3 to 2, with Robertson and Councilman Joseph Graffio opposing, to approve the game.
Although a Los Angeles Superior Court judge ruled in January that the game essentially is legal, the district attorney's office has appealed the ruling. In approving the game, the council stipulated that pai gow can be played at the Silver Saddle Casino only as long as the game is deemed legal by the state.
King, a Santa Ana real estate agent, said he bought land and a building for the card club in late March. The oblong, cinder-block building at Patata Street and Wilcox Avenue housed an automobile smog control station until last year.
Tanlo will spend about $2.5 million to enlarge the 7,000-square-foot building so it can house 50 card tables, a restaurant, cocktail lounge and administrative offices, King said. The club is scheduled to open in September.
King's efforts to build a card club have been marked by controversy.
In December, 1983, King said he had a funding commitment for the card club from Seacoast Investment Group, a Virginia-based financial consortium. But that commitment came into question when Seacoast told city officials that only preliminary contacts had been made with King and no final agreement had been reached. Seacoast executives also said they were unaware the money was to be used for construction of a casino.
Tanlo's financial footing again became an issue last November, when the project's architect obtained a court order to seize $27,000 still owed by King. As part of the ruling, a lien was placed on $50,000 King deposited with the city for the card club project. King, however, said the architect went to court merely to document that the money was owed. A judge ordered the lien, King said, after the architect's lawyer mistakenly sought the ruling because of "a communication gap."