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Union Club faces more legal action

Five months after the state ordered the replacement of trustees at the Union Club of Springfield with an emergency election, the new trustees are fighting between themselves over an audit that could determine if financial misconduct happened at the club.

An independent audit by Aug. 6 was among the requirements of a 15-page settlement in February between Ohio Attorney General Mike DeWine and six Union Club trustees, who were ousted for violating an earlier settlement by operating illegal slot machines and for allegedly breaching their fiduciary duties.

Three new trustees recently filed a motion to intervene in Franklin County Common Pleas Court, a move that could force the full audit they say isn’t proceeding.

The club, in turn, filed an appearance in court last week.

The 80-year-old social-charitable club — a Springfield institution with about 4,000 members and assets of $4.6 million — was split by DeWine in February into two distinct organizations, each with a seven-member board of trustees elected earlier this year.

One organization manages the social club at 139 W. High St., and the other controls the club’s charitable giving, which annually includes thousands locally for scholarships.

The tax-exempt local club, according to state records, ran the fifth-most profitable charitable bingo operation in Ohio in 2012 — a $665,132 profit on $3.1 million in gross revenue.

Prior to DeWine’s involvement, the club’s activities were managed by one, mutual board.

Robert “Flash” Whitaker, the charity’s vice president since February, said Monday he and two other new trustees, Harold Pounds and Larry Vince, were becoming increasingly concerned that the mandated audit wasn’t moving forward.

The settlement makes clear, he said, that a $150,000 judgment will be levied against the club if it fails to undergo an audit.

“I’d seen what happened to the old trustees,” Whitaker said. “I’m not going to get caught up in that web.”

Their motion to intervene — which asks DeWine not to seek the specified damages — alleges that current president Jerry Numbers is limiting the scope and timing of an audit.

Numbers referred questions Monday to the club’s attorney in Columbus, who didn’t return a call for comment.

Dan Harkins, the Springfield attorney who’s representing Whitaker, Pounds and Vince, said his clients want what’s known as a forensic audit performed to determine any financial misconduct that might have occurred before the new trustees took office.

They allege that the club’s balance sheet from 2011 may have been overstated by as much as $1 million in advances from charitable resources to the social club. They also allege that, two days before the emergency election in February, the old trustees transferred about $300,000 in investment assets to three individuals.

“You’ve got three trustees who are trying to find out what were the facts,” Harkins said. “You have other trustees who don’t want to look at the past, don’t care about it at all.”

In 2011, the state ordered the club to pay $261,918 to local schools and scholarship funds for allegedly not paying enough to education from its tear-off bingo operation.

The state ordered the club to pay an additional $69,000 to local schools after it found that settlement payments were made to the wrong entities.

Whitaker said he only wants the audit to go forward “and to let things go from there.” But, instead of an audit, he said other trustees have only asked for a balance sheet.

“My only goal is to get that place running right,” said Whitaker, a club member for 20 years. “That’s the members’ club. It ain’t ours.”

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