Six nonprofits face ban on gaming profits

Posted: Monday, September 11, 2000

JUNEAU (AP) -- The state Division of Taxation is barring six nonprofit groups from raising money through pulltabs after their pulltab cooperative was found to have violated state gaming laws.

The Last Chance pulltab cooperative, operated by Juneau resident George Wright, managed gaming operations on behalf of the Anchorage Symphony, Alaska Village Initiatives, Tlingit and Haida, the Juneau Boxing Club, the Kenaitze Indian Tribe and Charitable Gaming Association of Alaska.

The Last Chance Co-op provided its member nonprofits with $70,000 each in 1999. The nonprofit members will have to find other sources of funds in 2001 if an Aug. 31 decision by Tax Division Chief of Appeals Carl Meyer stands.

Last Chance Co-op will be allowed to finish the 2000 calendar year, but will be closed down for 2001, Meyer wrote in the decision. The year-long ban on gambling extends to the six nonprofit members. Last Chance Co-op plans to appeal the decision, said spokesman Dave Massey.

''What we do see is most of it's wrong,'' Massey told the Juneau Empire. Massey declined to explain further until the board overseeing the cooperative meets to review the decision and respond officially.

According to the 10-page decision, since 1995 the cooperative repeatedly failed to pay the 30 percent minimum required to its member nonprofits and had more expenses than allowed. Some of the expenses involved a misuse of the gambling cooperatives funds, including unusual transfers of money between the Last Chance Co-op and other organizations Wright helped run. Money from Last Chance Co-op was used by the Alaska Native Brotherhood to buy cash registers and provide employee Christmas bonuses and payroll advances.

Wright, who managed Last Chance Co-op, also was on the board of directors of Kenai Native Association, a pull-tab distributor. That created a conflict of interest because Last Chance Co-op bought pull-tabs from Kenai Native Association and on two occasions failed to pay for them.

''Taken together, the transactions are questionable, would be in violation of the gaming laws, and lack any real appearance of being at arms length,'' Meyer wrote in his decision.

Last Chance Co-op also spent $156,220 it was supposed to have set aside in a reserve account pending resolution of its dispute with the city over whether pull-tab shops must pay sales tax.

The Tax Division still is auditing Multiple Charities Association Co-op, another gambling cooperative run by Wright.

''It's probably a couple months still until we decide that,'' Meyer said.

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