Kept in the dark about gaming money
County officials left to read IRS reports to figure out how much association keeps
Portions of proceeds from sales of tip jars, a form of paper gambling, are given to Washington County fire and rescue companies. (Photo illustration by Colleen McGrath/Staff Photographer)
But what association President Glenn Fishack doesn’t mention that day is a story changer:
For at least 10 years, his organization has been keeping for itself 20 percent of the millions of dollars in public gaming money Maryland law has required the county government to give to the association, The Herald-Mail determined during a yearlong investigation.
The law doesn’t prohibit it, but two lawmakers and some former county officials said they never said the association would get any cut before giving the money to the local volunteer fire and rescue companies.
After taking its 20 percent share, the association has distributed the other 80 percent as aid to the local companies. In fiscal 2010, the most recent year for which its Form 990 was available, the association kept $212,041 of the $1,060,344 in gaming money that the county sent it.
With its share, the association has paid its own expenses and, each year since 1999, has had, on average, nearly $60,000 left over.
As a result, the newspaper found, the association has — at least as of a year ago — built up cash and investments totaling more than $600,000. Last week, amid new scrutiny by government, the association said it now has about $521,000 in its accounts.
In interviews earlier this year, Fishack and other association leaders said they have specific or potential uses in mind for all of the $600,000 — including an estimated $100,000 or more in a “rainy-day” fund.
County Administrator Greg Murray and Jim Hovis, director of the Washington County Gaming Office, said they have some idea what is going on, from reading the annual financial report the association, like other tax-exempt organizations, is required to file to the Internal Revenue Service.
Apart from that, they said, they are largely in the dark.
Hovis said he’s been rebuffed whenever he asks the association how much of the gaming money it keeps for itself.
“They’ve refused to cooperate and they’ve indicated it’s not my authority to ask,” Hovis said.
Kevin Lewis, director of the county Division of Emergency Services, said the association didn’t file its financial report for fiscal 2010 until last month. That was nearly one year after Sept. 30, 2010, by when the county had expected it.
Meantime, all 14 of its member companies with the same Sept. 30, 2010, due date either filed theirs on time or no more than a month later. The other 13 companies have different due dates.
Lewis said it’s frustrating not to see association officers taking the lead in reporting finances.
“That same level of accounting has to occur within the elected professional body that oversees the companies,” Lewis said. “You know, they can’t be held to a different standard.”
The situation is largely the result of a 1995 law that, so far, has given the association more than $18 million in local public gaming money. That law provides no stated purpose, no financial reporting requirements and no local governmental oversight.
So, because the law requires the county to give the money to the association regardless, the county can’t force the association to file the financial report on time, or even at all, Lewis said.
Del. John Donoghue, D-Washington and chairman of the local legislative delegation in 1995, said he and others designed the law to begin regulating tip-jar gaming in private clubs, and to benefit charities, as well as the volunteer fire and rescue companies.