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Call the Bouncer

Bar owners lobby and lawyer up for a fight with Otter

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While members of Gov. C.L. "Butch" Otter's alcohol task force insist they're only in discussion phase, the situation is shaping up to be a barroom brawl.

Bar owners have divided. Some have hired lobbyists, others are going it alone with statewide e-mail campaigns, and at least one business owner has managed to actually get onto the task force.

Add to this stew those who rent their licenses to bar owners for a monthly profit, the have-nots who want to get their hands on a license and a whole lot of griping about the Alcohol Beverage Control's leaner, meaner regulations and a rolling boil is inevitable.

According to task force leader Bob Wells, an adviser to Otter, they'll put the state's quota system on the chopping block next. This venerable system allows for one license for every 1,500 people in an incorporated city. It's a system that has been widely derided as the reason for a perceived shortage of licenses and price inflation. It's also the system that some license owners are determined to keep.

Moscow nightclub owner Phil Roderick says he stands to lose everything if the state does away with the quota system. His license, he says, would be worth pennies on the dollars he paid for it. He says he speaks for about 30 bar owners who are too scared to speak out but nonetheless refuse to accept any compromise over quotas.

Other bar owners, foreseeing the coming changes, are bracing for them with a newly hired lobbyist at their side. The Idaho Licensed Beverage Association, composed of owners and operators of liquor licenses, retained lobbyist Ken Burgess of Veritas Advisers, who has worked on U.S. Sen. Larry Craig's campaigns, to represent its interests. Butch Morrison, owner of the Crescent Bar and Grill and president of the association's Boise chapter, says the ILBA sees inevitable changes and has worked to propose an equitable solution.

"There's not a shortage of liquor licenses in Boise, they're just expensive," Morrison says. He names non-operator license holders—not the quotas—as the cause of much of the strife.

"If you don't operate the business, you shouldn't have a liquor license," says Morrison. "We think the waiting list can go away, but we want to be protected because we paid a lot of money for [our liquor license] and don't want to have it devalued."

However, the elimination of the "first in time, first in line" quota system didn't bode well with all of ILBA's members. Denise Rogers, who was the group's director, resigned and founded the Idaho Beverage Coalition, which—despite requests from co-founder Brian Donesley, a local attorney—was not invited to join the task force.

"I was a state senator. I sat on those committees. I was the state liquor chief. I've done hundreds of license transactions. I've lobbied and written much of the law they're discussing, and they won't let me anywhere near their committee," says Donesley. "There's nothing broken; the problem is how [the law is] being administered, not what the law is."

Unlike the ILBA, Rogers says her and Donesley's group aims to protect the interest of all license holders, so-called speculators included. Like Roderick, IBC isn't interested in compromise. Nor does the organization think speculators should be villainized for making good investments.

But nearly all the license owners finger a common fall guy: an overzealous head of the ABC division of the Idaho State Police. In fact, Donesley, who himself leases out liquor licenses and who says he wrote the 1983 statement of purpose imposing the two-year limit on license transfers, accuses ABC's head, Lt. Robert Clements, of manipulating the code's language. What was intended to discourage small-town bars from holding two liquor licenses while only using one to stifle competition, says Donesley, is now being used by ABC to discourage speculation.

Some bar owners applaud Clements' anti-speculation efforts, but criticize him for treating licensees like criminals. Clements is infamous because of last year's Bikinigate and his thinly-veiled legislative attack on the Big Easy. The popular Boise venue received a citation and a fine from his agency last year over a male revue.

In response to the attacks on his job performance, Clements says "We get criticized for everything we do. We follow the law and the law is there to specify the regulations and until then, that's what we have to work with. "

He says there's legitimate concern both ways. "We've got hotels and restaurants that want to come into Idaho that decide not to because they can't get a license, and we've got people who invested large sums of money that will not be able to re-sell." The so-called speculators don't get the same consideration from him. He's made it clear in his tenure as ABC's head enforcer that only bona-fide operators are welcome to apply for a license.

Members of Otter's committee say a solution could be a new class of non-transferable, site-specific licenses or a sales tax break to recoup what owners paid for their licenses. One possibility is removing ISP from licensing. It's an option that task force member Kevin Settles, owner of Idaho's Bardenay restaurants, agrees with.

"A liquor license is a business issue and there is not a need for it to be at the state patrol as long we we're talking about the licensing issue," he says. "I would support the movement of the license issuance to another entity, be that the dispensary or whatever."

Denise Rogers says her group also believes the state police should step out of the licensing business. So does the ILBA.

In 2006, the ILBA and Idaho Lodging and Restaurant Association (of which Settles was president from the mid-80s until late last year), wrote a joint position paper supporting the Idaho State Liquor Dispensary's absorption of ABC's licensing, regulation and disciplinary duties. Dyke Nally, the dispensary chief, says the issue is up for discussion. "No evidence, no information has come out that supports it really in either direction yet," he says. "I think something might, but it hasn't yet."

Those discussions, of course, aren't always easy to track. Wells assures BW that the group's meetings have been open to the public, but adds that as a governor's task force, the meetings aren't subject to the open meeting law, which states: "All meetings of a governing body of a public agency shall be open to the public and all persons shall be permitted to attend any meeting except as otherwise provided by this act. 'Governing body' is defined as the members of any public agency with the authority to make decisions for or recommendations to a public agency regarding any matter."

Gov. Otter may be a proponent of a leaner government—and his campaign accepted thousands of dollars from wholesale beer and wine distributors who stand to benefit from privatization—but Nally says such a move would be a financial blunder for the state.

"We're generating a lot of angst and a lot of nervousness over this, and we realize that anytime you talk about changing something that has been in place for as long as it has, you're going to get some pushback," says Otter spokesman John Hanian.

For people like Morrison, Settles and Roderick, that "pushback" is something more: a fight for their livelihoods.