SPECIAL TO THE STAR-TELEGRAM/CAROLYN BAUMAN CRUZ Retired Chief Ray Perry examines the former fire station of the Spillway Volunteer Fire Department.

AZLE - For two years, the Spillway Volunteer Fire Department had no official territory, no fire station, no serviceable equipment, no working fire-trucks and no alarm bells to answer.

But that didn't stop the department near Eagle Mountain Lake from taking in about $725,000 through charity bingo games, according to state records and other documents.

State law allows an operating fire department to stage charity bingo games if it dedicates 65 percent of the income to bingo expenses, including state fees, and gives 35 percent to a charity. And a volunteer fire department can be its own charity.

But Spillway hasn't had a contract to offer fire protection with the Tarrant County Emergency Services District since Oct. 1, 2001, district records show.

Without such a contract and without actually providing fire protection, a department can't legally raise funds as a licensee of the Texas Lottery Commission's Charitable Bingo Division, according to state law.

In September, Lt. Debbie Barton gave the only comment any Spillway official has offered: "It has a charter."

She was referring to a document filed with the Texas secretary of state's office. It's a formality, not a necessity, according to the office. In fact, Spillway had operated without a charter between 1986 and 2002, which is not uncommon among volunteer departments.

Since then, former Spillway Chief Richard Tyler and acting Chief Wayne Fox have declined repeated requests to comment on the department's status and the bingo revenues.

Now, it's unclear where the money went.

According to reports that Spillway operators filed quarterly with the Texas Lottery Commission, the department took in $724,805 from 302 bingo sessions between October 2001 and September 2003 at Everman Parkway Bingo and then at Pioneer Bingo in Arlington.

Investigators from the civil division of the Tarrant County district attorney's office are looking into Spillway's bingo activities, said Kurt Stallings, chief of the office's Pre-Trial Services Division.

But he said he would not comment further on an ongoing investigation.

Volunteer fire departments typically receive $15,000 to $100,000 annually from the Emergency Services District to provide fire and other emergency services to residents of territories laid out by the district. Spillway received its last $50,000 from Tarrant County in the district's 2000-01 budget.

The additional bingo-generated income is intended, under the state's Bingo Enabling Act, to help fund equipment and safety-education programs for volunteer departments.

But Spillway has no such activities.

It lost its territory when the county terminated its contract in 2001.

It was evicted from its fire station on Wells-Burnett Road soon thereafter.

It has no equipment. Some sits idle at the old fire station; explanations vary about where the rest of it went and whether it was sold.

There is one firetruck, but it has been deteriorating in Fox's back yard near Azle since Spillway lost its station. Its sun-faded exterior has lost its hand-buffed shine, and its equipment cabinets are missing their doors.

State Administrative Law Judge Renee M. Rusch ruled in July that the Spillway department had not met any of the state's criteria for operating as a firefighting organization since 2001.

But the bingo games didn't stop until September 2003.

'The ship went ahead and sank'

The Spillway Volunteer Fire Department was founded in 1956 as Castle Hills Fire Department, and it operated for more than three decades, according to its citations and commendations.

From its station at 6451 Wells-Burnett Road beside Eagle Mountain Dam, Spillway served a large rural area that, in the distant past, included parts of Azle, Parker County, Eagle Mountain Lake and as far south as White Settlement Road.

Spillway forfeited its charter in 1986 after failing to submit regular status updates, as required by the secretary of state's office. But it continued to operate.

From 1989 to 2001, the department was plagued with a constantly changing roster of chiefs, as well as accusations of embezzlement, criminal misconduct and personnel problems, according to a National Transportation Safety Board report. Many of the complaints stem from a 1990 firetruck crash that resulted in two deaths, the report said.

The 1963 Navistar International truck, which had been purchased new by Spillway, had been driven by a volunteer with no formal truck-driving training, which is not unusual for a volunteer department.

The 2-year-old daughter of the chief at that time was killed in the wreck. Though serious procedural irregularities were noted in the NTSB report, no criminal charges were filed.

James "Beetle" Bailey, who served as chief from 1995 to 1997, said recently that the department's financial problems, especially the embezzlement allegations, began before he took over. At the time, he was the youngest chief in Texas, at age 19.

"I had absolutely nothing to do with the money situation at the fire department," Bailey said recently. "I pretty much took myself out of the equation."

As chief, Bailey said, he suggested and then helped pick an oversight committee to handle income and purchases. He said that ended when he chose not to accept a third term in 1997, and Tyler, one of the financial committee members, took over.

"In the past, the fire chief has always had the right to sign checks, and it was always a two-person ordeal," Bailey said. "We had to have two signatures on any check.

"All the things that I had suggested to correct the financial problems ... disappeared after I quit being chief," Bailey said. "Things were not being carried through with; money was just spent frivolously."

Tyler was chief, Bailey said, "until the ship went ahead and sank."

By 2001, Tarrant County Fire District No. 1 had canceled Spillway's contract because of poor performance, according to Tarrant County Fire Marshal Randy Renois.

"They were late [to fire calls] a lot of the time, if they even showed up at all," Renois said. "Sometimes there might just be one or two guys show up at a fire or wreck, and they usually didn't have any equipment with them. That's just not good enough."

For various reasons, Spillway's territory had been reduced over the years to a small area of northwest Tarrant County between Nine Mile Bridge Road and White Settlement Road.

That was then divided among the Azle, Sansom Park and Eagle Mountain fire departments.

But Tyler and the remaining Spillway officers did not give up. Barton refiled with the state and received a new state charter in May 2002.

But the new charter could not bring Spillway back to life as a bona fide volunteer fire department. Renois said that he received several phone calls from Spillway officials in 2002 and 2003 about renewing the contract. The only formal request for reinstatement came when the remaining three Spillway officers asked for time on the agenda of the Emergency Services District meeting of Sept. 9, 2003. The board refused to issue Spillway a new contract and territory.

"The board decided that the territory was being properly covered now," Renois said.

Tyler, Barton and Fox apparently pulled the plug on Spillway's bingo operation a week or two later.

A schedule of 'occasions'

Until the fire department was shut down in 2001, Spillway was legally allowed to raise money through bingo games. Afterward, a murky and complicated bureaucratic process took effect.

What is clear is that nearly two years passed before the games were stopped.

Only charities licensed with the Charitable Bingo Division of the Texas Lottery Commission may buy and own bingo equipment and supplies, which can be obtained only from licensed dealers, according to the state law.

A legitimate charity, or conductor, contracts with a commercial-use hall or facility and sets up schedules for bingo "occasions."

Customers buy cards and participate in games. A 5 percent fee is deducted from all jackpots and sent to the lottery commission. After winners are paid, the remaining funds must be deposited immediately in a special bank account. From that account, licensed conductors must pay all operating expenses -- hall rent, utilities, personnel, bingo supplies, security -- by check.

The most recent annual numbers statewide show gross receipts of $555,294,513 in 2002.

Brenda Raines of Pioneer Bingo, where Spillway raised money after vacating Everman Parkway Bingo in July, declined to comment. A person answering the phone recently at Pioneer, who would not give her name, said Spillway had not participated in bingo games since about the third weekend of September.

A woman who identified herself only as Laura at Everman Parkway said she knew nothing about Spillway's games.

William Atkins, director of the Charitable Bingo Division, said that it is not unheard-of for a nonoperational volunteer fire department to continue to raise money through bingo games and that the division even often continues to relicense defunct departments.

"I don't have the personnel or the staff to be at every single bingo occasion that's conducted every day all across the entire state," Atkins said. "We rely on a high degree of voluntary compliance, and when we find the act is not being complied with, we take action against those organizations."

But Atkins said that because Spillway's request for a firefighting contract was denied on Sept. 9, the Charitable Bingo Division no longer has jurisdiction and is probably no longer investigating.

"If they conducted bingo without a license, that is a criminal offense," Atkins said. "But it's an offense we don't have any jurisdiction over."

Where's the money?

Since neither Spillway officials nor Pioneer Bingo's Raines would comment, it's not clear what happened to any of the $724,805 the department generated in the two years after it stopped fighting fires.

Usually, 65 percent of that amount, or $471,124, could legitimately be paid out as routine operating expenses and salaries for department personnel and others who ran the games. But Spillway no longer met the requirements to be called a charity.

According to the Bingo Enabling Act, Spillway officers should not have raised any money at all after losing their contract and discontinuing firefighting services, even though the Charitable Bingo Division continued to regularly reissue them licenses.

If the three Spillway officers disbursed the remaining $253,681 to another charity, none of the quarterly reports they filed with the Texas Lottery Commission confirm it. The last filing was dated July 2001.

The reports do show that $300 was contributed to an unnamed charity during the two years after Spillway was shut down, but the charity is not identified.

Accountability in such cases rests with the charity, not necessarily with its officers -- even though organization officers must sign all the paperwork, Atkins said.

"That's who we look to," Atkins said, referring to the organization, not the people. "That's who we license, that's where our authority begins and ends, with that license that's issued to an organization."

Revocation of a charity's license, as happened with Spillway, is about the only penalty the state has at its disposal.

To the Tarrant County district attorney's office, the Spillway bingo fund-raising activity is a more clearly defined issue, Stallings said.

"Obviously, the higher the amount, the more serious the case," Stallings said. "If you're walking out with three-quarters of a million dollars, we kind of want to know where it went."