ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Friday, February 21, 1997 TAG: 9702210085
SECTION: VIRGINIA PAGE: C-5 EDITION: METRO
SOURCE: MATTHEW DOLAN, DAVID M. POOLE AND JUNE ARNEY STAFF WRITERS
Just as the Virginia Charitable Gaming Commission rides out its first major investigation into alleged bingo fraud, the General Assembly may vote the commission out of business.
Several bills under consideration this week have provisions that would disband the entire regulatory commission in the year 1999 and, before then, offer localities the chance to opt out of the state's regulation system.
The bills, which have been passed in various forms by the House of Delegates and the Senate, should be addressed by a conference committee that meets Saturday, the last session of the 1997 General Assembly.
The seven-member Gaming Commission, which has governed bingo operations statewide since July, is coming under attack for being too heavy-handed and requiring too much paperwork - especially for small charitable organizations.
But this week, Jerry Rowe, the commission's executive secretary, detailed an ongoing investigation of the alleged embezzlement of as much as $1million worth of instant bingo tickets by the former bingo manager of a Chesapeake youth baseball league.
George West, who managed the bingo operation until he was dismissed last week, is accused of diverting funds from Deep Creek Baseball Association to his use through the sale of instant bingo tickets, according to court documents.
Calls for a statewide commission were prompted in part after a corruption investigation led to the conviction of a Henrico County bingo manager in 1995.
Several opponents of the 8-month-old state bingo panel said the Chesapeake probe does not change their opinion of the commission.
One of them is Sen. Mark Earley, R-Chesapeake, who said Chesapeake's commissioner of revenue had regulated the city's bingo operations well before the commission was formed - and better than a distant state agency in Richmond. Earley voted Wednesday to allow localities to opt out of the state regulations.
But the Chesapeake auditor who used to monitor bingo operations said Thursday that he has reservations about giving regulatory powers back to the cities.
``I would suspect that should this fall back in the laps of the cities, the state would have to mandate local audits and some controls over the [bingo] suppliers, especially if they're out of state.'' said Chesapeake City Auditor James Gibbs.
Proposed bills on charitable gaming still under consideration in the General Assembly would:
* Repeal the commission in 1999. This is a compromise between those who want to abolish it right away and those that want to give it time to prove its worth.
* Exempt organizations with small games - the Senate version is gross sales of $15,000 a year, down from $25,000 - from certain regulations.
* Exempt organizations with small games - the Senate threshold is $25,000 gross sales - from having to pay an annual permit fees.
Gov. George Allen said Thursday that the Chesapeake case points out the need to keep the commission intact until at least 1999.
``They are the ones that investigated it,'' Allen said. ``Whether someone else would have looked into it, I don't know. But they did their job very well.''
Del. Glenn Croshaw, D-Virginia Beach, who has opposed efforts to gut the commission, said the Deep Creek investigation is exactly what the commission was intended to do.
Charitable gaming, including bingo, instant bingo tickets and raffles, generate annual sales of about $215million statewide each year, Rowe said.
But after paying out expenses and prize awards, the groups - from the Elk Lodges to the PTAs - spend an average of 8 percent of the total money collected on their charitable activities, according to 1996 financial reports collected by the commission.
Critics have cited reporting requirements and audit fees that must be paid to the commission as reasons to curtail or abolish its regulatory powers. Others have said that bingo corruption is isolated and could be rooted out by the cities if they had enforcement power and resources.
Rowe, the commission's executive secretary, said he supports most of the proposed changes in bingo regulations, including lowering the state-mandated audit fee on bingo sales.
``I think it's right that the legislature has a chance to review the commission's work at the end of two years,'' he said.
But Rowe said the General Assembly should drop proposed amendments that would give individuals, cities and counties the opportunity to exempt themselves from state regulations.
LENGTH: Medium: 87 lines KEYWORDS: GENERAL ASSEMBLY 1997by CNB