U.S. to Discuss Possible Conflict With Casino Overseers : Gambling: Meeting will be held with trustee and attorney who handled purchase offers for U.S. share of Bicycle Club. Their names appeared on applications to operate the club. The men have denied any conflict of interest.

Federal officials said Monday they will not allow any conflict of interest by two men who oversee the Bicycle Club Casino for the U.S. government and were listed recently as part of a Santa Monica group buying the government’s share in the club for nearly $38 million.

Joseph L. Ilk, business manager of the U.S. Marshals Service Seized Assets Division in Washington, said officials plan to meet face-to-face this week with Harry J. Richard, the government’s trustee at the Bicycle Club, and his legal counsel, Las Vegas attorney James F. Lisowski Sr.

The Times reported Sunday that Richard and Lisowski handled purchase offers from prospective buyers of the government’s 36% interest in California’s second-largest casino, located in Bell Gardens. After government officials selected Club Acquisition Partners as the winning bidder, gaming registration applications filed by 17 investors in the group listed Richard as their proposed casino manager.

Records show one application came from Lisowski, who applied to the state attorney general’s office for registration as both an owner and manager of the Bicycle Club. Lisowski said he sent a letter to state officials last week withdrawing the application, but the letter has yet to be received in Sacramento.

Government officials said they intend to make clear to Richard and Lisowski in the meeting that: “Either you represent us or you represent the other guys. You cannot do both,” Ilk said. “We will not allow a conflict of interest.”

Richard denied Monday that any conflict of interest exists. “Nobody did anything wrong,” he said. “I do not represent anybody but the federal government.”

For there to be a conflict, Richard said, “there has to be a gain by one party and a loss to another party. I don’t understand where there is a loss or gain to anybody.”

Richard said he discussed with various bidders the possibility of staying on as the casino’s general manager after the sale, but he had not reached any agreement to do so. He said he has no idea why his name would have been listed as manager by the Club Acquisition Partners.

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While he presented bids to a team of government officials, Richard said he was not involved in the actual selection of the winning bidder.

Ilk acknowledged that Richard had been “up front” with government officials about having discussions with bidders about possibly remaining as casino manager. He said Richard told officials he would only consider a job offer after the final sale agreement had been signed.

Lisowski could not be reached for comment Monday. He said last week there was no conflict because he has no financial interest in Club Acquisition Partners. On his application form, Lisowski said the amount and percentage of his interest were “to be determined.”

Government officials were pleased the application is being withdrawn. “It is discomforting, though, that the application was sent in,” Ilk said. Government officials would consider any ownership interest to be a conflict of interest and want to discuss with Lisowski why the application was submitted in the first place.

At the moment, he said the government plans to proceed with the sale of its casino holding without reopening the process to other bidders. But the government will accept backup offers from other investment groups should the deal not be completed, Ilk said.

The Santa Monica group bid just under $38 million to acquire the government’s controlling interest in the casino. The government seized the club in April, 1990, after prosecutors proved that it was built in part with $12 million in laundered drug money from Florida.