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In an unprecedented action that runs counter to some available evidence, the state's top liquor regulator has ordered a Tempe nightclub to close, based partially on criminal allegations that the county attorney deemed unworthy of prosecution.
Late last month, Howard Adams, director of Arizona's Department of Liquor Licensing and Control, filed an administrative order to permanently revoke the license of the Electric Ballroom, effective January 1. The Ballroom is one of the Valley's most vital live-music venues, and the only one to regularly host rap music concerts.
The order, which will put the Ballroom out of business if it stands, came shortly after the club was found to have violated liquor laws related to two separate incidents, both involving allegations of sexual impropriety. In one of those incidents, which occurred in January, two high school girls claim they were dragged onstage by members of the rap group Onyx and sexually assaulted. In the other, a 20-year-old cocktail waitress trainee claims Electric Ballroom manager David Seven gave her free drinks until she was drunk, then raped her in his office.
The Maricopa County Attorney's Office declined to prosecute either case. Seven and the Onyx rappers have not been charged with any crime, and there is evidence that directly contradicts some of the complaints of the girls who attended the Onyx performance.
Two administrative law judges for the liquor department ruled that under the state's civil liquor laws, the proper punishments for the incidents were relatively small fines and short license suspensions.
But Adams overruled the judges, saying that taken together, the two events warranted his department's most severe sanction--license revocation.
"I don't know why Howard Adams is trying to stick a shiv into our heart," says Electric Ballroom co-owner Jim Torgeson. "I don't know if someone's pulling his strings; I don't know if it's because we defied him by having rap shows. . . . But whatever his problem is, Howard Adams has too much power, and he's acting like he's out to get us."
As the liquor department director, Adams operates without direct oversight and is the chief regulator of the state's liquor industry. He wields discretionary power that can make or break bars, nightclubs and other businesses that need liquor licenses to operate.
On November 26, Adams made a move to break the Electric Ballroom. Torgeson was served with an official notice of revocation the next day. He has filed an appeal with the state liquor board, and the Ballroom remains open and will keep serving liquor pending that appeal.
Adams declined to comment for this story.
Administrative law judges for the liquor department made certain that November was not a good month for the Electric Ballroom.
On November 8, Judge Lewis D. Kowal found the Ballroom guilty of liquor law violations in the Onyx case, ruling that the club should be fined $250 and have its liquor license suspended for three consecutive weekdays in January.
Five days later, Judge Allen Reed ruled that Seven's actions violated a liquor law requiring a licensed business to protect the safety of its customers. He also found the club guilty of knowingly serving an underage person (the cocktail waitress trainee) and ordered the Ballroom to pay a total of $6,000 in fines and have its license suspended for 10 consecutive days in January.
Both decisions came as part of a civil process where the burden of proof is much lower than in criminal court.
The decisions were then forwarded to Adams, who must approve all penalties. "Because the two hearing officers worked independently on [the complaints] and neither were privy to the other charges, the Director feels that both orders were inappropriate," he wrote in a November 26 memo. Adams wrote that he concurred with Kowal and Reed's factual findings--but changed their penalties, ordering a permanent license revocation, the most severe punishment at his disposal.
Donny Johnson, who owns a competitor of the Ballroom, the Tempe rock club Big Fish Pub, calls Adams' revocation order "unbelievably harsh."
"A liquor license in the Valley is worth roughly $50,000," he says. "Combine that with the several hundred thousand that business is worth and you've got one hell of a penalty. They're talking about taking away a man's livelihood. For what? An underage drinker? Every bar in the Valley gets a violation like that at some point or another. Does the Electric Ballroom deserve a fine? Yes. Do they deserve to be shut down? Hell no.
"If the state's not going to arrest anyone, how can the liquor department shut the bar down? I'm sorry, but that's bullshit. There has to be something else going on. It's obvious to me we're not getting the whole story here."
Until the November hearings, the Electric Ballroom had a relatively clean record with the liquor department. The club has two other violations on file for 1996--one for allowing an underage person to remain on the premises, the other for allowing someone to drink on the premises after hours. Those violations resulted in a total of $1,250 in fines.
There are Valley bars with serious violations for unlawful sex acts and failure to protect patrons--the same charges brought against the Ballroom--whose licenses are still valid. For example, the Phoenix topless club Hi Liter has incurred 15 violations for simulated sex acts in the past year. And the upscale Scottsdale watering hole Jetz was cited for failure to protect its patrons after 13 assaults, three aggravated assaults and two sexual assaults allegedly occurred on the premises.