The Union Club by the numbers
5,000: Approximate number of members in local social club formed in 1933.
$261,918: Amount of money Union Club failed to pay to charity in 2008 and 2009 from its bingo operation, according to the Ohio attorney general’s office.
$5,000: Amount allegedly earned annually by each of the Union Club’s seven-member board of trustees.
$44,000: Total amount allegedly earned annually by the Union Club trustee elected bar manager.
Three former trustees of a tax-exempt local social club that raises money for charity say they and others were paid thousands in cash and that the compensation wasn’t reported on the Union Club of Springfield’s tax returns.
Those trustees, who have since paid all or some of the taxes they didn’t pay initially, also said the Union Club, 139 W. High St., operates gambling machines that reward players with cash, which could be a violation of Ohio law.
The club’s attorney believes those complaints are what led the office of Ohio Attorney General Mike DeWine to ask new questions about the way the decades-old Union Club is run.
“I am not privy to the allegations that have been made,” said Kurt Gearhiser, a Columbus attorney representing the Union Club. “But my expectation is that everything, including the kitchen sink, was thrown. Some may be truthful and some may not be.”
The attorney general’s office will neither confirm nor deny it’s investigating the private club, but the former trustees say they came forward because they’re concerned about the future of the club that has 5,000 members and $4.6 million in assets.
Last year, the club was forced by the state to pay a six-figure settlement for not giving enough to charity from its bingo operation.
Not only is the reputation of the Union Club, founded in 1933, on the line, but more should be going to charity, the former trustees said.
“It could be a great place if it’s run right, and a great thing for the community. It’s a cancer in the community at this point,” said Jimmie Howard, a trustee who currently is suspended from the club.
“All we’re asking for is what’s right,” he said.
Longtime Union Club trustee and current club manager Jerry Adams, who’s been a member since 1969, dismissed the allegations.
“These guys are just disgruntled because they were thrown out of the club for behavior unbecoming of a member,” Adams said.
The Union Club’s charitable giving varies greatly from year to year, a Springfield News-Sun review of the club’s tax returns shows.
Last year, the club took in $505,243 in revenue, and paid out $339,218 in grants.
But in 2010, the club took in $683,827 and paid out $125,687. The year before that, the club took in $815,252 and paid out $116,504.
The club reached a settlement in 2011 with the state attorney general’s office to make good on two years, 2008 and 2009, it allegedly didn’t pay the net profit from its instant bingo tickets to charity.
Only after the attorney general stepped in did the club pay the money, totaling $261,918, owed to 16 Clark County high schools, colleges and scholarship funds. According to Alex Anderson, the club’s bookkeeper, 51 percent of the club’s bingo money must be given to education by law.
Joe Jackson, vice president for business affairs at Clark State Community College, said the Union Club annually gives thousands to the Clark State Foundation to be dispersed as scholarships.
“They’ve been a generous and loyal and steadfast donor for a number of years,” he said.
The settlement agreement with the attorney general’s office also made note of several illegal gambling machines being operated by the club in 2010 — machines the club said it removed but which the former trustees say are still there.
“I play ‘em all the time,” said Bill Whitt, who served as a Union Club trustee for three years.
The club’s attorney said that gaming issues are a part of the attorney general’s latest inquiry.
“The gaming machines are a minuscule part of this,” Gearhiser said.
The legality in Ohio of gambling machines has been “incredibly confusing for many people,” he said.
What’s yet to be resolved, he said, is whether the Union Club is operating sweepstakes machines, in which a cash payout currently is legal, or skill-based machines, in which a cash payout is illegal. The club has operated different types of machines through the years, he said.
“If we’ve done something wrong … all right, we’ll deal with it,” Gearhiser said.
“Almost every time I’ve represented a charitable organization,” he said, “I have found issues that the organization is doing incorrectly, especially organizations that aren’t run by professionals.”
Howard, a retired bargaining chairman of United Auto Workers Local 402, said he belonged to the club for about seven years before being elected one of seven trustees in 2010.
At that time, trustees were paid $1,000 quarterly, plus a $1,000 Christmas bonus, he said, all of it in cash.
If a trustee is elected manager, one of two assistant managers or secretary/treasurer, they make even more, Howard said — an extra $750 per week as manager, $450 per week as assistants and $450 per week as secretary/treasurer. Two other former trustees verified the amounts.
“There are a lot of charitable organizations that could use that money,” Howard said.
A review of the Union Club’s tax returns between 2005 and 2011 revealed that, in many years, trustees reported no income. Other years, income appears to have been under-reported.
“I questioned it and told them I was going to report my income regardless of how they paid me,” Howard said. “Some of them didn’t like it.”
Gearhiser said he has no knowledge of issues concerning individual trustees.
The club’s 2010 return shows that Howard received nothing — yet he said he received $4,000 that year, and paid his back taxes this year.
When Howard was elected assistant manager in 2011, he said he decided midway through the year he wanted to be paid in check, with taxes withheld, a move the other trustees followed, he said.
“I said, ‘I’m not accepting any more money from this club unless there’s a paper trail,’ ” he explained.
Even so, the club’s 2011 tax return doesn’t list Howard or his income at all, despite that he was paid at least $11,450 by check, according to check stubs he provided to the News-Sun.
Adams, the club manager, confirmed the current pay scale, but said it’s only been in place since the club started paying by check, with taxes withheld. He said he was unsure how long that’s been, but said that before the current system, he was paid only $300 every three months — below what’s taxable, he said, for someone his age.
“I ain’t never made $750 (per week) cash,” the 74-year-old said. “I wish I did.”
Their pay was upped to the current scale, he said, to cover “inflation, like everything else.”
On the club’s 2011 tax return, it was reported that Adams, as manager, made $2,000. The year before, his income was reported as zero.
Howard was suspended from the club this past March for a year after allegedly calling the wife of a fellow trustee an obscene name. He said it’s a false charge used to cover for the fact that he was going to request the resignations of four trustees over back taxes and gaming issues.
“As soon as I asked for those four resignations,” he said, “they retaliated.”
He found an ally in Roy Atha, former president of Teamsters Local 654 and a Union Club trustee for several years. For two years, Atha said he served as assistant manager.
In 2010, Atha himself had been suspended from the club, allegedly for threatening someone after taking issue with a trustee election.
Admittedly motivated by revenge, Atha went to the city to allege that trustees weren’t paying taxes on their cash earnings — himself included. He then paid the $1,336 he owed the city, and persuaded another former trustee, Whitt, to go back and pay his share as well.
“If it goes to court, I’ll even testify,” Whitt said.
Atha still owes state and federal back taxes, and he admits he owes “more than I can pay.”
At 76, he said he’s “old enough to know better,” that he should’ve been paying taxes during the years he was a Union Club trustee.
When asked why he wasn’t paying taxes, he shrugged. “Greed maybe,” he answered.
Whitt was at a loss as well for why he didn’t pay taxes.
“Same reason as everybody else,” he said. “It’s been going on for 50 years.”
The city of Springfield won’t comment if it’s had any contact with other trustees about back taxes, citing confidentiality. Anderson said he recently settled the trustees’ city taxes, but the city said it couldn’t comment.
Adams said that everything has been cleared.
“We don’t have any tax issues with anybody whatsoever,” he said.
Howard stresses he doesn’t want to see the club shut down. He wants it cleaned up.
“If we don’t straighten this club up,” he said, “the government’s going to sooner or later.”
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