DATE: Wednesday, October 22, 1997           TAG: 9710220519

SECTION: FRONT                   PAGE: A1   EDITION: FINAL 

SOURCE: BY MATTHEW DOLAN, STAFF WRITER 

DATELINE: RICHMOND                          LENGTH:   85 lines

BINGO GROUPS TO RECEIVE $1.1 MILLION FEES REFUND

The state Charitable Gaming Commission decided Tuesday to give back more than $1 million to 450 bingo organizations, responding to criticism from local operators who claimed that the state was charging them too much in annual audit fees.

Even though audits have helped uncover recent criminal activities such as Chesapeake's Deep Creek Baseball embezzlement scam, state officials said they have more than enough money to root out corruption.

``The refund of $1.1 million is unparalleled in state government history,'' said Edward J. Fuhr, chairman of the commission.

Any bingo organization that paid audit fees on its revenues in 1996 should expect to receive a partial rebate, commission officials said.

In South Hampton Roads, charitable gambling operations collected almost $50 million in the fiscal year ending Sept. 30, 1996. After paying expenses and prize awards, the groups spent about $3.7 million of that money on charitable purposes, such as refurbishing baseball fields and building chapels.

The much-maligned audit fees were first set at 2 percent of a bingo organization's gross receipts when the state General Assembly created the commission in 1995. Since then, the commission has received almost $6 million.

But when the General Assembly allowed the commission to lower the fee earlier this year, state officials found their regulatory job could be done with less.

``This is particularly heartening because the commission is making significant progress in its twin objectives of increasing the amount of proceeds going to charity while weeding out the disturbing large criminal element in Virginia's games,'' Fuhr said.

Late last month, former youth league bingo manager George West was convicted on two of 10 charges that he took part in a scheme to divert hundreds of thousands of dollars from Deep Creek Baseball Association bingo games.

After bingo fraud convictions in Henrico County in 1994, the Chesapeake case - the first investigation by the commission to lead to successful criminal prosecution - was the second-largest bingo fraud conviction in state history. Three others, including a Maryland-based supplier involved with the million-dollar-a-year bingo game, pleaded guilty to corruption-related charges.

Although their funding will be cut back, commission officials said their law enforcement efforts will increase. Jerry Rowe, the commission's executive secretary, said he has authorization to hire two additional full-time and three part-time employees to assist with investigations.

Rowe and other officials have confirmed that as many as five separate bingo organizations statewide are under investigation for paying volunteers to work at bingo games, which is a felony offense.

Tuesday's announced rebate comes at the same time the commission has been discussing more stringent regulations for bingo operations, which should gain final approval next month.

Officials hope the give-back will appease Virginia's bingo organizations as they become subject to the new rules next year. Those rules will drastically increase the amount of money these bingo organizations must provide for charitable purposes.

Commissioners also may hope to quell their critics in the General Assembly, who came close to shutting the commission down earlier this year. Lt. Gov. Donald S. Beyer Jr., for example, has called the commission a ``needless intrusion.''

``Don Beyer has felt that the commission was a cumbersome bureaucracy that siphoned all of this revenue away from charities,'' said Beyer gubernatorial campaign spokeswoman Page Boinest. ``But it sounds like (Tuesday's commission vote) would correct a lot of the problems he has had with it.''

A spokesperson for Beyer's opponent, Republican James S. Gilmore III, did not return phone calls Tuesday night.

The rebate also will be accompanied statewide by a reduction in the annual audit fee from 1.5 percent of an organization's gross bingo receipts to 1.25 percent.

But Ray Mac Lennan, who was one of about 40 people from bingo groups attending the meeting, could not be mollified.

Lennan, the junior vice commander of Veterans of Foreign Wars Post 8613 in Shenandoah, said the commission's decision to refund money to bingo groups was tantamount to ``throwing a little, tiny bone our way and hoping we shut up.''

Starting this month, organizations like Lennan's, which gross more than $500,000 will have to return 9 percent to charity and 1.25 percent in audit fees to the state. Next year, the amount that must go to charities will increase to 12 percent. MEMO: The commission is scheduled to vote on Nov. 3 at 11 a.m. in

Richmond on its final regulations, which will take effect on Jan. 1,

1998. For more information, call the commission at (804) 786-1681. KEYWORDS: BINGO EMBEZZLEMENT

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