February 24, 1993
by Yolanda Reynolds
San Joseans who wish to engage themselves in policy decisions by way of the initiative or referendum process have to follow a whimsical San José ordinance that one attorney, Tim Morgan, says “may be defective for unconstitutional vagueness, in that it does not permit electors of the city to ascertain with any certainty the number of signatures that will be required to qualify an initiative for the ballot.”
The Committee for Cardroom Controls found out in mid-December just how whimsical it really is. The Committee for Cardroom Controls was formed after the San Jose City Council in a majority vote decided to expand the number of card games to be played in the city and relaxed the restrictions on cardrooms in San José. That occurred last June 9.
Mayor Hammer’s rationale for the expansion of gambling was that the cardrooms would pay approximately $4 million in taxes to the City per year. The City is desperate for more tax money. Cuts in service/personnel have been announced in order to reduce the General Fund budget to accommodate an expected $40 million shortfall of revenues to the General Fund. This made the card club money attractive, even if it meant making some major revisions in the City’s cardroom ordinance.
Spokespersons for the Committee for Cardroom Controls say that the cardroom expansion completely reverses the City’s previous policy of strict controls on card room gambling. The controls are needed, the Committee says, because of the crime that tends to accompany gambling.
Their claims regarding illegal behavior were verified last month when many members of the family owned Garden City Cardroom Club room plead guilty to 59 felony counts before retired Santa Clara County Superior Court Judge, John S. McInerny. A number of employees several years ago pled guilty to charges against their illegal activities at this same card room. The Garden Club Cardroom in San Jose is the largest such establishment in northern California.
Critics of gambling my gambling related crimes are not limited to embezzlement and tax dodging but include such crimes as loan sharking. murder, prostitution among other illegal behavior that involves gambling patrons who are engaged in or addicted to gambling. Among those who pled guilty were Nicolas Dalis, Chris Peter Dalis, Debbie Dalis Smith, Phil Harris, Carmen Dalis, John Weingarten, and
The Corporation, The Garden City Card Club, itself. Except for Carmen Dalis, all pleaded guilty to grand theft campaign law violations, and fraudulent personal income tax violations. The Corporation itself was also charged and admitted to being guilty of similar violations. Except for the ﬁling of fraudulent personal income taxes. All, except Carmen Dalis, face the possibility of 10 years in prison and ﬁnes of thousands of dollars.
Before a recent revision, City ordinance required the revocation of a cardroom license in the event of a felony conviction by the cardroom operators. The San Jose Chief of Police can no either impose a fine or revoke the license. This case broke open in 1985 when Nicolas Dalis was
accused of cheating his partners (and the government) of thousands of dollars each year by skimming off proﬁts. The change in the ordinance allowing the retention of license after a felony was made this last June.
San Jose Police Chief Cobarruvias chose to impose a $5 million ﬁne and force the current stockholders to sell their interests. The ﬁne is placed on the Club, not the stockholders and can be paid off over a period of seven years by the new card club owners, unless they negotiate themselves out of the ﬁne as part of the purchase agreement with the current owners. The card club reportedly grosses over $40 million a year.
The indicted card club owners decided not to go to trial and instead decided to plead guilty. Since they had given campaign funds to so many politicians a total of 14 politicians had been subpoenaed to testify regarding the contributions that they received from the card club owners had it gone to trial.
Most of the campaign money had reportedly been laundered through employees or relatives of the card club owners making it difficult for campaign contribution sleuths to ascertain the candidates’ real sources of ﬁnancial support. Among those subpoenaed to appear before the court were Mayor Susan Hammer and former Mayor Tom McEnery, who will not have to testify because of the guilty pleas.
The elected city ofﬁcials decided to go ahead with relaxation of card room restrictions and the expansion of gambling – even though the police department had not been properly consulted and without regard to the concerns raised by Council member David Pandori as well as the testimony of a number of concerned citizens. A citizens group, the Committee for Cardroom Controls was formed to put the matter of card room gambling to a vote of the people of San José.
The Cardroom Committee decided not to pursue a “referendum” on the Council’s action regarding the city’s cardroom policy, which would have resulted in a simple reversal of the Council’s decision. They decided instead on an Initiative, in order to address the numerous revisions that have weakened the strict controls beginning in 1985 and continuing to the present.
In order to place an initiative on the ballot, the citizen petitioners must collect signatures of a certain percentage (5%) of the registered voters of the last general election. The petition coordinator for the Cardroom Committee, John Morales, and Cardroom Committee Secretary, Dale Warner, say that throughout the signature gathering process they have been stalled and misdirected by City Staff, primarily the City Clerk’s office.
They say that when they ﬁrst sought speciﬁc information on the requirements for both a referendum and an initiative, two people at the front desk told them that such information was not at that ofﬁce but that the requested information could be obtained by contacting the Secretary of State of California. They did that, but were referred to the City Clerk’s office.
They again approached the City Clerk’s office but, this time, were told that the information they sought was available at the City Attorney’s office. They again were told that such that information was available in the City Clerk’s ofﬁce.
Finally, on July 21, the City Clerk answered to their request for the number of signatures required to qualify their initiative for the ballot, the amount of time allotted to collect the signatures and details regarding the process. She responded, in writing, saying that they needed 17,583 signatures. She added that that figure represented 5% of the voter registration count as provided in the Registrar’s office. She also cited the ordinance statement on petition gathering.
The group turned in on Dec. 4, 1992 what they thought were more than enough signatures (over 28,341 San Jose signatures) for the official count and validation by the County Registrar of Voters. The City Clerk, at that time, again informed Morales (in writing) that the required number of signatures were 17,583.
The Registrar of voters veriﬁed that the Committee had collected 17,723 valid signatures — more than the number of signatures originally specified by the City Clerk.
To the surprise of the Committee, on December 8, 1992 the City Clerk advised the Committee that they actually needed 1,565 more signatures and that the required number of valid signatures was instead 19,288.
Interestingly, one citizen, Glen George of Joseph George Distributor (a local liquor distributing firm), in a letter dated December 9, 1992, protested to the City Attorney’s office the number of signatures originally said to be required by the City Clerk and he said that by his reading of the law more signatures were, in fact required. That number he said was 19,288.
On December 15, a deputy San Jose City Attorney wrote to Mr. George saying that the 19,288 number he suggested was correct. This number was considered appropriate in spite of the fact that new voter registration count after Oct 5 (the deadline for voter registration) was not available until Dec.7, 1992, several days after the petitioners had turned in the required number of signatures that had been twice affirmed by the City Clerk.
Having been advised of a change in the number of signatures that were required to place the initiative on the ballot, the Cardroom Committee decided to take the issue to Court unless the Initiative petitioners are given “relief” to either allow them to collect the needed signatures, since they had more than a month remaining in the time required to collect the signatures, or to let stand the original total of signatures originally affirmed by the City Clerk, Patricia O’Hearn.
The Committee Attorney, Morgan, expects to ﬁle formal legal papers at the Superior Court if the City does not respond positively. © La Oferta Newspaper.