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As the bingo operator, Casteel was acting as a middleman, collecting rent from Cooperwood and then paying some of it to the McDermotts, while pocketing most of the rest. Koski said at the public hearing that the McDermotts received $14,000 a month from Casteel. So if both Cooperwood and Koski are telling the truth, Casteel's cut from Gilman Street came to about $38,000 a month – or about $456,000 annually.
Koski said that Casteel was also in charge of choosing nonprofits to operate out of the hall. Although the letter said he officially began this duty in 2007, interviews and public documents suggest that he had a hand in it long before that.
City documents show that a nonprofit, Kids Education Development Scholarships (KEDS), began operating bingo out of the Gilman hall as early as 2004. That same year, KEDS also ran bingo games at Casteel's Foothill Square Bingo Hall. In October 2006, a group called Transitional Living Collaborative (TLC), also started operating out of the Gilman Street hall. Around the same time, this group was also operating out of Casteel's 777 Bingo hall in Vallejo.
In 2008, several Vallejo charities sued Casteel, TLC, and two other nonprofits, alleging that they were running a scam that enabled Casteel to collect exorbitant rents from the bingo games. Tax forms showed that TLC was based out of one of Casteel's offices in Oakland, and then later shared a post office box in Moraga with a few other nonprofits that also rented from Casteel. TLC supposedly provided relief to victims of Hurricane Katrina. But in testimony, a representative for the nonprofit who also admitted she was Casteel's employee couldn't recall a single instance where TLC donated any funds to that cause, according to the lawsuit. "In essence," the legal documents alleged, "Mr. Casteel controls all aspects of the multimillion-dollar cash bingo industry in Vallejo."
The charities also alleged that Casteel had cornered a monopoly on the local bingo market by not allowing them an opportunity to cash in on potential bingo proceeds for legitimate charitable activities. The charities alleged that suppliers said they had been told by associates of Casteel that he would cut them off if they sold to his competitors. The charities also claimed that Casteel's operation lowered bingo "buy-in" charges on the nights they ran games in an effort to siphon off their customers. Attorneys for Casteel and the other defendants argued in court that the allegations were false and lacked evidence.
In the end, the Vallejo charities lost the case on a technicality. The judge ruled that they didn't have legal standing to sue Casteel.
Yet none of the numerous allegations made by the Vallejo charities against Casteel came up in Berkeley's investigation of the Gilman Street hall. Daniel said he only spoke with Casteel once during his investigation. In that conversation, Daniel said that Casteel alleged that Cooperwood was running a "lawless" operation. Daniel said that when he asked Casteel how he could allow illegal activities to occur at a hall he was supposedly managing, Casteel's response was that he had no idea about it at the time it was happening.
Casteel also never appeared at any of Berkeley's hearings on bingo. Daniel said he never spoke to a representative for the McDermott family, who essentially handed over bingo management to Casteel.
However, Daniel did say that he spoke to Frank Ennix, an attorney claiming to represent both Casteel and the McDermotts. Ennix did not return calls for comment for this story, but Daniel said that when he talked to Ennix, the attorney tried to make a deal to prevent Daniel from revoking the bingo hall's use permit. But Daniel wouldn't budge. "I told him in August," Daniel said, "'We're shutting you down.'"
When Casteel took the podium in Oakland's city council chambers during public comment at a December 2008 meeting, he spoke confidently and rationally, with hands planted firmly on either side of the stand. He wore a sports coat and peered over a pair of oval-shaped spectacles at now Mayor Jean Quan and other members of the public safety committee. His short, dark grayish hair was slicked back, his face, clean-shaven.
Casteel was complaining about proposed changes to the city's bingo ordinance that the council committee was scheduled to vote on at the meeting. The proposal included a host of detailed regulations concerning the amount of rent that could be paid by charities at the halls. "The underlying implication of a lot of the questions that were raised in here is that somehow, bingo people are dishonest," Casteel said, pausing. "If you look at the bottom line, these charities have exceeded expectations — they've raised the bar and created higher expectations."
Casteel alleged that Barbara Killey, who is now retired but at the time oversaw the city's bingo operations, hadn't worked hard enough with bingo hall operators, like himself, to hammer out a compromise before submitting the proposed changes to the council. But Killey responded that she had indeed tried to open a dialogue with the operators and that they had dodged her most important questions.