Racial-discrimination lawsuits against a private Montgomery County swimming club over its revoked contract with a Philadelphia day camp could cost enough to threaten the Valley Club's existence.
Attorneys, club members, and tax records indicated that a pair of federal-court lawsuits - one filed, one promised - could cost the club more money than it has and possibly leave board members liable for civil-rights verdicts.
"The only asset we have is the land, which housing developers have been trying to buy for years," said Bonnie Bacich, a Valley Club member for 30 years.
The club has been targeted for how it treated 65 children who traveled with the Creative Steps Inc. day camp to the Huntingdon Valley club June 29. The children said they heard racial comments by club members who left the pool when they arrived. The club later refunded money paid by Creative Steps and revoked its summer swimming contract.
The club also ended contracts with two other day camps, but neither has protested the matter. The Valley Club says all the contracts were ended because of safety issues from overcrowding, not racial prejudice.
One lawsuit was filed Friday by a parent, and Creative Steps executive director Alethea Wright and dozens of other parents said at a news conference Monday that a second discrimination suit was coming.
"The outrage of having to go through this, with an African American president in 2009 - we don't take this kind of stuff lightly in America anymore," said Montgomery County civil-rights lawyer Brian Wiley, who is not involved in the case lawsuit.
Wiley said fighting the issue in court could prove a fiscal challenge to the tax-exempt, nonprofit club, which listed $210,193 in assets in its most recent federal filing. "That club's got to settle that case," he said.
U.S. Sen. Arlen Specter (D., Pa.), who has met with club officials and Wright separately, believes the matter could best be dealt with through mediation by the U.S. Department of Justice's Civil Rights Division.
"Legal proceedings could go a long time and be very expensive," Specter said yesterday during a break from U.S. Supreme Court confirmation hearings, "and I think the Civil Rights Division is much better able to handle it than a court."
Valley Club president John G. Duesler Jr. - who has offered to resign over the imbroglio - said yesterday the club was searching for an attorney.
He ended the interview before the club's financial position could be discussed.
The legal threats to the club if the racial-discrimination allegations are proved can be considerable, experts said.
Tax lawyer Jennie Sikes noted that the U.S. Supreme Court in 1983 upheld an IRS decision to strip the private Bob Jones University of its tax-exempt status because of racially discriminatory policies.
Duesler said the club has 150 member families, and its 2007 IRS filing says it spent almost its entire year's revenues of $100,267 to cover operating expenses. Having to pay taxes would shift that balance.
Wiley, the civil-rights attorney, said federal law allows for a nonprofit organization's board members to be held individually liable in a discrimination case.
"Being private is not going to help them," Wiley said, "and being nonprofit is not going to help them."