A well-known local social club has until Oct. 4 to deliver a list of documents to Ohio Attorney General Mike DeWine as part of a new investigation by the state into alleged financial issues.
The letter sent late last week to trustees of the Union Club of Springfield — an organization whose charitable giving and vast membership during the course of 80 years have made it a Clark County institution — marks the third time this year that DeWine’s office has ordered the club to take action.
Topping the list of required records the state wants is a “detailed explanation,” supported by documentation and board meeting minutes, about why $260,479 of club money was transferred to three individuals back in February the day before trustees being ousted by DeWine left office.
The Union Club, 139 W. High St., gives thousands annually in local scholarships with money made from a tear-off bingo operation that’s among the most profitable in Ohio.
Last year, state records show, the club turned a $665,132 profit on $3.1 million in gross revenue, ranking it among the five most lucrative charitable gaming sites in Ohio.
With that comes a strict set of rules about how an organization can use money raised in the name of charity.
In February, DeWine cleaned house and ordered an emergency election after finding that the former Union Club trustees allegedly breached their fiduciary duties and violated state law by operating slot machines, the latter of which also violated an earlier settlement agreement with the state.
In addition, DeWine split the Union Club into two organizations — one to oversee charitable giving and one to manage the social club and its bar — each with seven new trustees.
In its latest look at the club, the state also wants an explanation of why a nearly $109,000 dividend from an investment account wasn’t recorded on the club’s books; why the social club’s operating account was on the general ledger of the charity; why the charity loaned $10,000 to the social club and who approved it; and an explanation of a $950,000 receivable on the charity’s books and how that money was used, among other items.
“I’m hoping for the best,” Jerry Numbers, president of the Union Club charity, said Monday.
Previously, Numbers has said that while the $260,479 transferred the day before the election looked “funny,” it was properly done as part of a deferred compensation plan for three retired club employees.
He said he was unsure why DeWine’s office “all of a sudden” would want information after ordering the club late this summer to conduct a full audit by Jan. 30.
Despite the new request for records, the club must still complete an audit by Jan. 30, according to Dan Tierney, DeWine’s spokesman.
As of February, the club held $3.6 million in total assets.
“Hopefully, they’ll figure it all out,” Numbers said of the club’s attorney and recently hired accounting firm.
The club’s Columbus attorney, Donald C. Brey, is out of the country on vacation, his assistant said Monday.
Robert “Flash” Whitaker, who won office in February as a trustee of the Union Club charity on the promise of reform, believes the state is on the right path with its latest inquiry.
“This could be the best charitable club in the country,” Whitaker said. “I hope that investigator jumps into it.”
Whitaker, however, was suspended earlier this month from the club for 30 days, he believes, for efforts to get the club back in the good graces of the state and to become more transparent to its 4,000 members.
In June, Whitaker and fellow trustees Harold Pounds and Larry Vince filed a motion in court to force the club to complete the audit that wasn’t proceeding.
Whitaker, Pounds and Vince withdrew that motion after the state ordered an audit by Jan. 30, according to their attorney, Dan Harkins.
Whitaker, the charity’s vice president, was suspended on Sept. 3, a Union Club letter stated, for actions detrimental “to the members and survival of this club.”
“For Flash to continuously bother the state with letters and phone calls it is not doing the members of this club nor the trustees any good,” that letter also stated. “He is costing the club an enormous amount of money and time that could be spent on the members and betterment of the club.”
“Our job as a trustee is to report any wrongdoing to the AG,” Whitaker said. “I’m being condemned for it.”
The day after his suspension, Whitaker, along with Pounds and Vince, sent a letter to DeWine’s office alleging that charitable funds are propping up the bar and its employees’ salaries, and that the state’s order of an audit spanning Jan. 1, 2011, to Dec. 31, 2012, wouldn’t address areas of concern that occurred later.
Bobby Shaffer, the trustee who manages the Union Club bar, said he didn’t want to answer questions Monday about the social club’s finances.
Whitaker, who’s been threatened with indefinite suspension, said he’s seen little change at the Union Club despite the influx of new trustees.
“Really, it’s run the same way,” he said. “They have no records. The members have no idea what they’re making, what they’re spending. And it’s all a secret. I’m not supposed to know. And I’m a trustee.”
Sticking with the story
The Springfield News-Sun first reported last fall on alleged wrongdoing at the Union Club of Springfield and subsequent action by the Ohio Attorney General’s Office.