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Occupying less than one square mile of land just east of the 605 Freeway at Carson Street, Hawaiian Gardens is the smallest city in Los Angeles County.

But it has a big problem.

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Nearly 70 percent of its tax revenue comes from one business: The Gardens Casino. And since the coronavirus shutdown, the loss of casino income is costing the city about $1.1 million a month.

'I've been in this business for 20 years and I've been at six other cities, and there's just really nothing like it,' said City Manager Ernie Hernandez.

'The bottom line is, nobody depends this much on one source.'

FAKE VOLCANO

The first thing you see as you drive up to the casino is the fake volcano.

'The theme here is Hawaiian. So it has a volcano and has music and smoke and fake lava that lights up,' Hernandez said as he led a tour of the exterior.

Under the massive shaded portico out front, there are lanes for valet parking — a stretch limo is at the curb for the high rollers. This place is open 24/7, and it's normally jumping, with boxing matches, weddings, tournaments.

More than 2,000 cars can park in the lot. But it's quiet and empty now. The double doors don't even have locks on them, so are held closed with chains and padlocks.

Security Manager Dan Sanchez is not used to the quiet.

'We're so used to the hustle and bustle of it,' Sanchez said. 'And just seeing it closed is kind of just really odd.'

Inside are 200,000 square feet of space with 225 gaming tables, the second largest card room in California. No slot machines or video poker like in Las Vegas or tribal casinos, just card players sitting elbow-to-elbow, face-to-face. Or at least, there used to be.

SECURITY BARS AND SWIMMING POOLS

Hawaiian Gardens is home to nearly 15,000 people, so it's one of the more densely-populated cities in the area. Most families speak Spanish at home, and nearly one-quarter of the population is poor.

While police, fire and road repair services are safe for now, with the casino money slashed, many other free services Hawaiian Gardens provides to its residents to improve quality of life and reduce crime could be cut. They are possible only because of the revenue that comes from the casino.

One program encourages homeowners to remove security bars from their windows. The city offers free bar removal, new windows or home security cameras. That's on hold for now, along with other non-essential services.

'We have some recreational and quality-of-life programs that really nobody else has,' Hernandez said. 'I mean, we have a tattoo removal program. We have most of everything, our service, especially to the seniors, at zero costs. And most cities can't afford to do that.'

The city's only public pool, at Lee Ware Recreation Center, is closed during the coronavirus outbreak, but when the health precautions abate, the pool might remain closed if the city cannot pay lifeguards and swim teachers.

Free public events, like a popular car show, Independence Day celebration, Halloween and Christmas tree lighting gatherings will also likely be canceled, Hernandez said.

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BIGGEST PLAYER IN TOWN

The city of Hawaiian Gardens, incorporated in 1964, is named for a Prohibition-era thatched roof fruit stand where, local legend has it, you could get some illegal moonshine in your soda if you knew how to ask for it. The city developed as a bedroom community, nearly all single-family homes. But over the years, as the housing stock aged and large nearby employers such as the Long Beach Naval Shipyard and big factories closed, the population got poorer and crime rose.

For years, the city budget was bolstered by fees from a big bingo hall, but by the mid-1990s the city was in dire financial straits. So voters approved a proposal for the operator of the bingo game to create a card club.

The card club operated out of a big tent back when it started in 1997. But that was replaced in 2016 by a $90 million gambling hall.

The casino is controversial — partly because the money doesn't all stay local, some goes to a political cause in Israel. The casino also recently admitted to violations of the federal Bank Secrecy Act and agreed to nearly $6 million in settlements.

But as the casino grew, so did its share of the tax base. The city's fortunes rise and fall on the casino's daily take. And now it's too big to fail.

REOPENING HEADACHES

For now, city manager Hernandez has no easy answer to the casino's continued closure.

Los Angeles County has other shuttered card clubs in small cities, including Commerce, Bell Gardens, Gardena and Inglewood. Hernandez said, together, the card club cities have laid off about 7,000 workers, adding to the region's sudden unemployment problem.

The city and casino are pushing state and local health authorities to permit the cardroom to operate in Phase 2, which is when lower-risk businesses can open with physical distancing precautions. But the California Gambling Control Commission places cardrooms such as the Gardens in Phase 3, when higher-risk businesses may reopen with distancing measures.

'We've taken note of the reopening plans put forth by other states and the gambling industry,' said Commission spokesman Fred Castaño. 'We can't go into specifics because it's not finalized, but we are studying the plans closely and will work to incorporate the best practices that arise from these plans.'

That slower re-opening plan puts The Gardens and Hawaiian Gardens officials at a competitive disadvantage to California's tribal casinos, which began reopening this week.

Hawaiian Gardens Casino Ca News

Tribal casinos have more flexibility under their sovereign nation status to set their own rules. They have installed physical distancing measures, such as separating players and gambling machines with plexiglas dividers.

Card rooms like The Gardens are likely to also adopt similar safety measures, said Sanchez, the casino security chief. But, stuck in Phase 3, they have no projected date to reopen.

'And so not only does that present an immediate danger to our revenues, but from a consumer standpoint, it puts us at a great disadvantage if [tribal casinos are] gonna open up already and we're not making these decisions,' Hernandez said.

The immediate worry for Hawaiian Gardens is the loss of revenue while the casino is closed. But a longer-term worry is whether its customers will be fickle and move their gambling habits to tribal casinos that are opening up — and whether they will ever return.

A grand jury in Los Angeles County has been seeking information about the California gambling operations of Dr. Irving Moskowitz, a Miami Beach philanthropist known for his financial support of Jewish settlers in East Jerusalem and the West Bank.

Scott Wildman, a former Democratic member of the California state Assembly, told the Forward that he had been called to testify on March 3 before the grand jury, which meets behind closed doors. Wildman said the questions posed to him focused mainly on the casino and bingo hall that Moskowitz owns in the impoverished city of Hawaiian Gardens, just south of Los Angeles.

In particular, Wildman said, the questions dealt with a 154-page investigative report issued in 2000 by the staff of the state legislature’s Joint Legislative Audit Committee, which Wildman chaired. The report detailed a series of alleged improprieties in the establishment and operation of Moskowitz’s casino and bingo hall.

“They were concerned about the fact that very little investigative work had been done subsequent to the report,” Wildman said, “and that very few of the issues had been looked into.”

Moskowitz’s supporters in Hawaiian Gardens frequently credit tax receipts from his casino with keeping the cash-strapped municipality afloat. But opponents, including the Coalition for Justice in Hawaiian Gardens and Jerusalem — an orga- nization composed mostly of Jewish peace activists — have long accused the 76-year-old physician of commandeering the political structures of the tiny city to serve his philanthropic interests, particularly his funding of controversial projects in Israel and the territories.

The battle over the Hawaiian Gardens casino represents one of the most dramatic instances of the Middle East conflict spilling over into local American politics. The Hawaiian Gardens bingo hall, a not-for-profit operation launched in 1988, and the casino, a for-profit operation opened in 1997, are major sources for the millions of dollars that tax documents show Moskowitz has poured into the coffers of right-wing settlement groups such as Ateret Cohanim and the Everest Foundation.

Moskowitz’s money has frequently been used with the goal of establishing a Jewish presence in predominantly Arab neighborhoods of East Jerusalem. Construction at Moskowitz-connected sites repeatedly has sparked unrest and worldwide protests, including the 1997 opening of an archaeological tunnel near the Temple Mount that led to battles in which 76 people died.

Despite the international implications of the battle in Hawaiian Gardens, the involvement of California authorities in the town’s controversies has always focused narrowly on local issues, including the integrity of the city’s political process and the gambling operations’ labor practices — much of which was discussed in Wildman’s legislative report.

In 1995, the Los Angeles Superior Court considered a case brought against the planned casino by the Committee Against Card Clubs Association, a group that Moskowitz’s lawyer, Beryl Weiner, says was funded by competing gambling operations. After a series of countersuits by Moskowitz, the two parties reached a settlement in 1997, with both sides agreeing to stipulate that the establishment of the casino was “valid.” Moskowitz also agreed to pay the community group about $280,000.

In a letter to the Forward, Weiner wrote: “All investigations and challenges relating to the development of the casino have already occurred…. In addition, all applicable statutes of limitation have expired.”

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Weiner, in his letter, wrote that he was not aware of the recent activity of the grand jury, but that, “there would not be any reason for a grand jury investigation, nor could any such investigation be justified.”

Grand jury proceedings are confidential — defendants are not always alerted when they are being investigated — and jury officials will not reveal any cases on the current docket. But sources familiar with the proceedings have confirmed to the Forward that other witnesses appearing before the grand jury also have been asked about Moskowitz’s gambling operations.

The matter is being handled by the public integrity section of the grand jury, which evaluates possible criminal charges. Criminal grand jury proceedings generally result from an investigation by a police department or district attorney’s office, and when they produce an indictment, can lead to a public criminal trial. It is unclear from the information provided to the Forward if the grand jury is focusing on the conduct of Moskowitz, Hawaiian Gardens officials or both.

The grand jury’s activity comes at the same time that the California Gambling Control Commission is reviewing Moskowitz’s application for a permanent gambling license, which would replace the temporary license under which the casino has operated since opening in December of 1997. The California Attorney General’s office already has endorsed Moskowitz’s application, but the commission is still hearing arguments from both sides and has not announced when it will make a final decision.

In the course of the licensing proceedings, the Coalition for Justice has argued that Moskowitz does not have the “good character” necessary for a casino license because of his philanthropic giving to pro-settlement organizations in Israel. At the same time, some of Moskowitz’s supporters have voiced skepticism about the concern of coalition members for the welfare of Hawaiian Gardens, citing the group’s roots in Jewish peace activism.

“None of these people know anything about Hawaiian Gardens,” said Leonard Chaidez, the mayor pro-tem of Hawaiian Gardens, who said that he and all the current members of the Hawaiian Gardens city council are Moskowitz supporters. “If Dr. Moskowitz wants to send his money to Israel, that’s his business.”

The casino is a private operation, so its financial records are not public. But, according to Chaidez, in February the casino took in $5.7 million, $644,000 of which came back to the Hawaiian Gardens city government in taxes.

Moskowitz’s nonprofit bingo parlor funnels its proceeds to a charitable foundation, the Irving I. Moskowitz Foundation. In 2001, the last year for which tax records are available, the foundation donated about $500,000 to beneficiaries in Hawaiian Gardens, and more than $2.9 million to Israel-related causes. Of that sum, $1.75 million went to a single charity, the American Friends of the Everest Foundation, which was founded by Moskowitz to fund religious institutions and land acquisition in Jerusalem, according to Israeli news reports.

The anti-Moskowitz coalition previously focused much of its attention on Moskowitz’s giving overseas, but has recently shifted its public emphasis to local issues. Last fall, the coalition submitted an 80-page report to the gambling commission detailing long-standing allegations against Moskowitz that have been aired in various public forums, including the Hawaiian Gardens Redevelopment Agency public hearings, the 1995 county court proceedings, and the depositions to the Joint Legislative Audit Committee chaired by Wildman.

The audit committee is a special body formed by the legislature to investigate improper interactions between government agencies and private business. The staff report on Moskowitz was released at a public hearing in 2000. It was never formally endorsed by the legislature itself, leading some to dispute its official status. But experts in state politics say such procedures are standard.

“There’s no other process than having the expert staff write it and have it released at a public hearing,” said Thad Kousser, a professor of political science and expert in California politics at the University of California at San Diego. “That’s about as official as committee reports get in the legislature.”

The report on Moskowitz recommended that state and local law enforcement authorities “investigate for criminal or corrupt activity” the actions surrounding the 1995 Hawaiian Gardens redevelopment project, which included the casino. It also recommended that the state force Moskowitz to pay back $12 million in city redevelopment funds he received for the casino, and that his attorney, Weiner, be referred to California’s state bar association for investigation.

The report noted that Moskowitz spent half a million dollars of his own money to campaign for the 1995 referendum, something the report deemed illegal under a state law that bars casinos’ financial backers from influencing election initiatives about their establishments. In addition, the report cited numerous instances in which Moskowitz and his casino allegedly exerted undue influence over the political operations of the town.

The report also questioned whether there was a conflict of interest involving Weiner, who served as legal counsel both to Moskowitz and to the city’s redevelopment agency when it provided the multimillion dollar grant for the construction of the casino.

In his letter to the Forward, Weiner dismissed the conflict of interest allegation, saying he had acquired “a written waiver of conflicts of interest” from the city of Hawaiian Gardens before taking on both jobs.

Weiner has long disputed the legitimacy of the report, noting that Wildman received political contributions from the co-director of the Coalition for Justice, Rabbi Haim Dov Beliak. In his letter, Weiner wrote that the report authored by Wildman “has been touted as an official report of the Committee when it is anything but.”

A few months after the report was released, Wildman was stripped of his chairmanship when he attempted to create a subcommittee to continue investigating the situation in Hawaiian Gardens. Wildman was relieved of his duties by Robert Hertzberg, the first Jewish speaker of the California Assembly.

Soon after, Wildman’s term as assemblyman ended and no further action was taken on his report.