Poor areas being overlooked at L.A. Olympic foundation.

$100 million fund often favors region's suburbs

The foundation charged with distributing $90 million in surplus funds from the 1984 Summer Olympics to Southland youth-sports programs has largely overlooked South Central Los Angeles and other impoverished parts of the county, according to the organization's financial records.

Instead, the Amateur Athletic Foundation of Los Angeles -- which now administers a trust that has mushroomed to $108 million -- has generally tilted towards the suburbs. For example, in 1989 the AAF awarded grants valued at $230,000 to Los Angeles-based sports programs, compared to $2.3 million to organizations in the rest of Southern California, foundation documents show.

Furthermore, since 1989 the AAF collected more money from investments than it parceled out to all its sponsored athletic programs in eight Southern California counties. In 1990, the foundation earned roughly $7.5 million in dividends and interest -- $3.27 million more than it gave out in grants and programs.

The foundation's 1991 financial statements have not been completed, but AAF officials said earnings will exceed expenditures by about $1 million.

Since it was formed one year after the commercially successful 1984 Summer Olympic Games, the AAF to date has spent $23 million on grants to organizations that run athletic and recreation programs.

The foundation's mission statement clearly mandates that minority groups and impoverished areas should be targeted. A top priority, the statement says, is to fund programs aimed at "groups or communities that are most in need. These will often be communities of lower income."

Foundation President Anita DeFrantz, who earned a 1990 salary of $152,000 including benefits, defended the organization's spending, though she conceded her organization has not done enough in South Central Los Angeles. She acknowledged the AAF has not initiated any athletic programs in the impoverished minority community, but has allocated hundreds of thousands of dollars to 11 existing sports or recreation clubs in South Central.

"We can always do more but I'm proud of what we've done for all the youth of Southern California," she said.

In addition, DeFrantz said many AAF grants to large organizations and foundation-initiated recreation programs benefit thousands of young people throughout the region, including inner-city teenagers.

Last year, the AAF awarded $3.6 million in grants to Los Angeles-based sports organizations, some of them administered by USC and UCLA youth programs, as opposed to $1.2 million for the rest of the eight-county region.

At the same time, though, of the 25 times the board voted to allocate grants since the foundation was formed in 1985, only four times has the largest award gone directly to economically deprived parts of Los Angeles or the county's five poorest cities based on median household income.

Deputy Los Angeles Mayor Mark Fabiani, speaking for Mayor Tom Bradley who was in Washington, D.C., last week, criticized the AAF's inner-cities performance.

"The figures you've cited are distressing and everyone who was part of the 1984 Olympics should be disturbed how the athletic foundation is using, or more appropriately, not using, the money," Fabiani said. "When you have a board comprised of mainly one group, in this case the downtown business community, that group is not going to be sensitive to the full community's concerns."

Several months ago, Bradley, AFL-CIO labor leader William Robertson and U.S. Circuit Court Judge Stephen Reinhardt resigned from the AAF's board, angered that some members were reluctant to add younger, minority activists to the 19-member body. Fabiani said the foundation's meager spending in poor communities also fueled the mayor's decision to quit.

The AAF's current board is an amalgam of leaders from Hollywood, industry and professional athletics, many of them with ties to 1984 Olympic committees. Television producer David Wolper is chairman of the AAF board that includes: Atlantic Richfield Co. Chairman Lodwrick Cook, top City Hall lobbyist and Bradley confidante Maureen Kindel, Los Angeles Dodgers President Peter O'Malley, Korea Times publisher Jae Min Chang, ex-Olympian Rafer Johnson and basketball luminary Magic Johnson.

Also on the board, now comprised of 50 percent minorities, is management consultant and Rebuild L.A. President Peter Ueberroth, who orchestrated Los Angeles' 1984 games.

Board member Kindel called Fabiani's remarks "loaded," asserting she believes the AAF's mission is to spend money where 1984 Olympic events were held, from "Lake Casitas to Pasadena."

"It's a balancing act," she said. "But like every other institution in Los Angeles, we'll be reviewing our activities in light of the wake-up call from the riots."

Clearly, the AAF has provided millions of dollars to sports programs that directly benefit poor minority youth, like the Community Youth Gang Services and Reviving Baseball in the Inner Cities. Nonetheless, the reports also show an equal or greater amount has gone to such groups as the Ladies Professional Golf Association, the Constitutional Rights Foundation, the Boys and Girls Clubs of Huntington Beach, the Southern California Tennis Association and the Southern California Badminton Association.

AAF board member John Argue, senior partner with downtown Los Angeles-based Argue Pearson Harbison & Meyers, echoed that view.

"Our spending is heavily tilted to the poor areas and disadvantaged kids," he said, noting that an AAF-sponsored pool in Cabrillo Beach is frequented by South Central youths. At the same time, Argue said, the AAF has had difficulty "finding organizations" in deprived communities that can administer foundation programs and grants.

Then too, records of grants to sports organizations in 1989 and 1990 indicate the AAF did not give any money to groups headquartered in the five poorest cities in Los Angeles County: Bell, Bell Gardens, Huntington Park, Vernon and Cudahy.

In 1991, the largest grants went to: the U.S. Olympic Festival '91 ($801,000), Child Victims in Court Foundation ($100,000), San Pedro Baseball Association ($98,000), Salvation Army centers in Los Angeles, Glendale, Pasadena and Compton ($87,200), and California Handicapped Skiers ($85,000).

Based on a list of grants, the foundation has not directly established any programs for minority youth in South Central or built facilities like swimming pools, basketball courts or baseball fields in places like Watts or Bell.

Said Councilwoman Joan Milke Flores, who represents a district that runs from South Central to San Pedro, "The whole idea of using (surplus) money in the Los Angeles area dictates they have to look at L.A. problems, including in low-income areas. . . . Where is the money going?"

Operating out of a historic mansion on West Adams Boulevard that is surrounded by manicured flower gardens, the AAF spent more than $668,000 in 1990 on professional services and the salaries of its top six executives, compared to $4.2 million in program grants, according to the financial statements. The organization made more than $7.4 million in interest on investments and finished the year with $2.2 million more than it had at the end of 1989.

Fund executives said the 1991 report will snow the AAF with assets of about $108 million compared to just over $100 million for 1990.

In addition to questions about grant disbursements, figures provided by the foundation also indicate the AAF may not have distributed sufficient funds, at least during 1990, to maintain its tax-exempt charitable trust status.

According to the statement, the foundation allocated a total of $4.2 million in 1990 to Southland sports programs but finished the year with more than $100 million in assets. In order to maintain its classification as a charitable trust, the organization must distribute the equivalent of a minimum of 5 percent of its assets every year.

Conrad Freund, the foundation's chief financial officer, said technically the fund does not have to comply with the 5 percent requirement because it is classified a public charity. He said since its formation, the foundation has averaged a 6.2 percent distribution rate, which is higher than most other large trusts in the country.

"If you take into consideration inflation over the years, our spending has actually been higher than other foundations and you could make an argument that we have been too aggressive," Freund said.