Former city commissioner levels more charges at Queen Mary’s longtime captain
By Dave Wielenga

The Queen Mary’s longtime steward, Joseph Prevratil, improperly diverted approximately $2.3 million from the not-for-profit RMS Foundation that runs the city-owned ship to a private corporation that Prevratil owns, operates and is the sole employee, says a former member of the Long Beach Community Development Advisory Commission.

According to former commissioner Juan Pardell, an appointee of ex-mayor Beverly O’Neill, a court filing indicates that Prevratil transferred the money from RMS to his management services company, Leisure Horizons, Inc., between late 2003 and mid 2005 in 37 payments ranging from $25,850 to $135,000. Other documents show that neither Prevratil nor his partner, Howard Bell, requested permission from the California Attorney General to engage in these self-dealing transactions, nor declared them afterward—both of which are required by law.

The charge was one of seven Pardell made in a July 18 letter to the state attorney general requesting an investigation of RMS for the purpose of dissolving it. Of course, that may be about to happen, anyway.

Prevratil and Bell have already steered the Queen Mary’s for-profit arm—Queen’s Seaport Development, Inc. (QSDI)—into bankruptcy, and the fate of RMS hangs in the balance. An auction for the remaining 57 years of a lease to operate the ship and develop 50 acres of surrounding land is set for Aug. 14.

Howard M. Ehrenberg, the court-appointed trustee for the Queen Mary during bankruptcy, gets irritated when asked about Prevratil’s possible financial irregularities.

“Rather than throwing mud, why don’t you focus on the fact that we are less than one month away from an auction for that lease?” Ehrenberg asks. “That’s good news.”

Pardell counters that the Queen Mary, which arrived in Long Beach 40 years ago this December, did not necessarily have to spend this anniversary in bankruptcy.

“This shows that there were resources to pay off debts,” he says. “The Queen Mary does make money; there was just too much going into entities owned by Joe Prevratil.”

Leisure Horizons is a California Corporation that was paid $134,000 by the city of Long Beach in the early 1990s when Prevratil was hired as project manager for the expansion of the convention center.

“I know of no other projects that Leisure Horizons has undertaken since the convention center job,” says Pardell. “Joe Prevratil owns Leisure Horizons and he is its only employee.”

A 2006 audit of the RMS Foundation by Windes and McClaughry seems to be referring to Prevratil’s connection with Leisure Horizons when it says, “The Foundation has an employment contract with its executive officer, which has been assigned to a management company controlled by that officer . . . The agreement provides for a minimum base compensation, deferred compensation and a bonus based on the operating results of the Foundation.”

The audit mentions no amounts of compensation, but it appears to be more than the $12,000 per year that Prevratil is officially paid by RMS, according to its tax returns.

“We’re looking at a couple million dollars,” Pardell says.

Actually, Pardell is looking at more than that. His letter to the attorney general also cites large payment made by RMS to Shipwreck Productions—which produces the Queen Mary’s annual Halloween promotion—and a mysterious man named Fred Culman.

Shipwreck’s officers are Prevratil and his sons, Robert and Eric, which casts a shadow of self-dealing suspicion on the $49,820 that RMS paid to the company on Nov. 30, 2002—as well as four other payments that year from QSDI to Shipwreck totaling $99,640. Additionally, Prevratil’s sons each have earned six-figure incomes from RMS.

Court documents show that Culman received $368,526.60 from RMS in 24 payments from July 2003 to December 2004, plus another $45,543.66 lump sum from QSDI. “Culman is not listed on the RMS tax returns,” Pardell points out, “nor is there any explanation why this person received payments.”

Ehrenberg, the trustee, says “Culman’s company leased one of the energy-related facilities on the ship. I’m not sure if it was air conditioners or refrigerators, but that debt is simply related to those assets. Mr. Culman is simply somebody who provided machinery and is being paid back for putting assets on the ship.”

Pardell is not convinced. “The refrigeration issues related to the ship were done by Sempra Energy,” he says. “They have the contract and the money was provided by bonds issued for the Carnival Cruise Ship renovations. Besides, if Culman provided professional services, why is he not listed on RMS’s tax returns as one of the highest-paid independent tax contractors for that year?”

Clearly, these are questions that would be best put to Prevratil. But he did not respond to three calls to his office on the Queen Mary—nor other attempts through acquaintances—requesting an interview for this story.

“I relayed your message to Mr. Prevratil, and he said your name sounded familiar,” said his administrative assistant, Leslie, during the second request. “He directed me to ask you if you have ever written for OC Weekly.”

Prevratil has a good memory; I interviewed him in January of 2004 for an OC Weekly story entitled “Queen Scary,” which detailed the creative accounting—and absence of city oversight—that enabled him to claim millions of dollars in rent credits that a court later ruled he had taken improperly. When the City demanded that money in March 2005, QSDI filed for bankruptcy.