A state investigation found that a Montgomery County swim club racially discriminated against 56 African-American and Hispanic children in June when it revoked an agreement to allow a Northeast Philadelphia day camp to use its pool after the children' first visit.

"The racial animus . . . and the racially-coded comments" by club members at the Valley Club in Huntingdon Valley were the reasons the club revoked Creative Steps Inc.'s contract, according to a 33-page report by the Human Relations Commission and released tonight by an attorney who represents four of the campers.

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The Human Relations Commission report examined Valley Club leaders' actions, including members' e-mails, both before and after the Creative Steps trip to the pool.

In one e-mail to another Valley Club official, board member George Whitehill wrote, "Race is an issue since every e-mail of complaint mentioned race, although stating that, race had nothing to do with the complaint. It only takes one out of the 120 parents to make this an issue, and at no cost to them."

The 56 children had reported hearing racial comments after they arrived at the club June 29, and the state report noted that the club had no African-American members in 2008 or 2009.

The commission ordered the club to pay a $50,000 civil penalty for the club's discrimation again one child, whose parents filed the complain with the commission.

The report also orders Valley Club to pay other damages, including reimbursing the parent who filed the complaint for all related expenses. If there is no settlement made between the parent, the club and the commission, either party can request a public hearing before the commission and can after that be challenged in court.

The $50,000 civil penalty is to be paid to state government, under terms of the finding.

Mildenberg said that because the fine is only for the club's discrimination against one child, it could be greatly increased - into the millions of dollars - if applied equally to the cases of dozens of other children enrolled at Creative Steps who also lost the chance to swim at Valley Club.

"If the award stuck on appeal," Mildenberg said, "that would shut them down."

In a brief phone interview, Valley Club president John G. Duesler Jr. said he had not seen the report and did not know of its findings. Valley Club attorney Joe Tucker said the report's conclusion that the club practiced racism was incorrect would be appealed.

"Because of the mischaracterization of the media, the Human Relations Commission was under too much pressure to find anything but what they found," Tucker said. "It was a fait accompli once the media got ahead of the facts."

The situation elicited a national media firestorm during the summer over allegations members of a swim club in a historically white suburb withdrew permission to allow minority children into their pool - even after a $1,950 check had been delivered to pay for the children to have weekly swimming trips.

The Human Relations Commission report said the club had 155 paid membership in 2009 and 179 in 2008, none held by an African-American.

Additionally, the report noted that when Valley Club tried in 2009 to expand its membership by recruiting in areas outside its township - Lower Moreland, which has a 0.8 percent black population - mailouts were "mainly directed at areas with overwhelmingly Caucasian populations" including Rhawnhurst, Fox Chase and Churchville.

The more-diverse townships of Cheltenham and Abington, like other nearby areas with "significant African-American populations," the report says, were passed over.

Creative Steps director Alethea Wright, the report said, had found Valley Club on the Internet when seeking a replacement for the New Frankford Community YMCA, where campers swam in 2007 and 2008 before it closed this year.

The report noted that the club had hosted other groups of similar size to the Valley Club group without apparent incident, and that Wright had told Duesler in advance about the number of children she would bring to the 260-bather capacity pool.

When the children were at the pool, one child recognized member Michelle Flynn, who is a teacher at Laura H. Carnell Elementary School, and reported that she said, "What are all of these black kids doing here?"

After the campers left, the report said that one club member threatened to rethink his membership and that e-mails circulated about the matter.

Human Relations Commission executive director Homer C. Floyd said last night the agency does not comment on its investigations, though the parties involved are free to distribute the findings.

Contact staff writer Derrick Nunnally at 610-313-8212 or dnunnally@phillynews.com.

Staff writer Troy Graham contributed to this article.