Houston – from www.chron.com – A prominent local businessman and generous City Hall campaign donor has resigned his post on the Harris County-Houston Sports Authority board amid questions about his ownership of several adult video stores.

Haroon Shaikh,[pictured] an accountant who owns one of Texas’ biggest CPA firms, says he sold the half-dozen Foxx Video stores in July 2008 to his brother. Local and state records still list him as either the registered agent or the party responsible to pay property taxes.

The stores, which Shaikh said were closed indefinitely Friday, did not operate with sexually oriented business permits, and are close to — in some cases barely a block away from — churches, schools, day care centers, residential neighborhoods or apartment complexes. City ordinance prohibits such businesses, referred to as SOBs, from operating within 1,500 feet of such areas.

In the past decade, the city of Houston has spent millions to defend and uphold a law regulating SOBs, such as topless bars and adult bookstores, finally getting some of them shut down last year.

“We didn’t know it was an SOB,” Shaikh said. “The intention was never to run a sexually oriented business. They’re closed now. We lost quite a bit of money and 14 people lost their jobs as of today.”

Shaikh was appointed to the sports authority board by Mayor Bill White in October of last year at the recommendation of City Councilman M.J. Khan.

Since 2007, Shaikh has donated $10,000 to Khan’s political coffers, $5,000 to mayoral candidate Gene Locke and $1,000 to City Councilwoman Jolanda Jones, according to campaign finance records.

Khan and Frank Michel, a spokesman for White, both said campaign donations had nothing to do with Shaikh’s appointment and that he was chosen because of his experience as a CPA and his positive involvement in the local Pakistani community.

Political contributions are “never a consideration in who’s appointed,” Michel said.

Assistant Police Chief Kirk Munden, who oversees the Houston Police Department’s Special Investigations Command, said the Foxx Video stores had never been targeted by police for SOB enforcement because they were not identified as “an extreme violator of vice laws.”

The HPD’s vice division, which investigates prostitution, liquor and gambling violations, says it has to use a “rational process” to prioritize its enforcement.

“Our first responsibility is to determine the degree of violations and the nature of the violations,” Munden said. “Is this worth our limited resources or would the citizens of Houston be better served if we spent our time on better investigations?”

Shaikh said he sold the businesses to his brother in July 2008, months before he was even considered for appointment to the sports authority board. In the decade he owned the stores, he had operated under the assumption — made after consulting his attorney — that they did not meet the legal definition of a sexually oriented businesses because 60 percent to 70 percent of their revenue was from the sale of mainstream feature films.

On Monday, the store at 10855 Telephone, for one, appeared to have far more adult titles for sale than mainstream films.

The applicable city ordinance says a company is an SOB if its “primary business” involves the sale of sexually explicit material.

Legal experts said state statute and case law associated with sexually oriented businesses have defined “primary business” as “not incidental” to a company’s revenue and have stipulated that if the main draw of a business involves the sale of sexual images, it qualifies as its “primary business.”

“If you’re holding yourself out to the world as operating an adult video store, it’s very difficult to argue that that is not part of your primary business,” said Matthew Festa, an assistant professor at South Texas College of Law. “A gas station may make more money selling soda or Slim Jims, but you wouldn’t say gas wasn’t their primary business, would you?”

Manzoor Memon, a former volunteer adviser to Mayor Lee Brown on South Asian issues, said Shaikh’s appointment was inappropriate given his ownership of the video stores.

“This makes it appear as though everything is for sale,” said Memon, who noted Shaikh’s campaign contributions. “The people who have big money go out and buy these positions.”

Khan said he was not aware “of the nature of those businesses” when he suggested the appointment.

“I have known him for a very long time, and he’s a very successful person who has done a whole lot for the community,” he said.

Shaikh said he decided to resign from the sports authority board, effective Thursday, when questions were raised about the stores, even though he no longer owns them.

“I just went there to help out,” Shaikh said of his work on the sports authority. “How many people do I need to explain my situation to?”