Hilmi Aburish, owner of one of Washington's largest limousine services, is by his own account a generous man to his friends.

For Merella Peterson, a sales representative for Washington's Willard Inter-Continental Hotel in 1986 and 1987, he provided a red Mercedes 500SL convertible on occasion for commutes to work or drives to the Virginia countryside on sunny weekend afternoons, she said.

One of his limousines was at her disposal when she went to the airport or apartment hunting. He frequently picked up the tab for her drinks or dinner at downtown hotels such as the Park-Hyatt, the Four Seasons and the Grand, as well as at Georgetown clubs such as Pisces or Desiree. After the dinners, she was often driven back to her apartment on Massachusetts Avenue in one of his limousines, she said.

"She is like a sister to me," Aburish said in an interview.

Aburish's rival, the Marquis Limousine Co., sees it differently. In a $2.3 million civil lawsuit filed in D.C. Superior Court, Marquis contends that Aburish used the Mercedes, the elegant dinners, the visits to private clubs and the free limousine service to win Peterson's help in steering the Willard's limousine business from Marquis to Aburish's firm, Bethany Travel and Limousine Inc. At the time, Marquis had a contract to provide limousine service to the Willard's guests. Aburish's company now provides limousine service for the Willard, but without a written contract.

The suit opens a door on a fiercely competitive limousine business in Washington that is as much as part of the capital's official life as state dinners and Embassy Row parties.

Marquis Limousine, alleging breach-of-contract and wrongful interference, is seeking damages from defendants Inter-Continental, Peterson, Bethany and the Oliver Carr Co. The Carr Co. and the Willard Corp. are the managing partners of the entity that owns the hotel, but they are not active in the management of the hotel.

Attorneys for Inter-Continental and Peterson have denied the allegations in the suit, as have Aburish and Peterson. Aburish has said in court papers and to a reporter that the favors he provided Peterson had nothing to do with business, but were merely gestures of friendship. In a deposition, Peterson, who referred all questions to her attorney, has reiterated that she and Aburish are merely friends.

Marquis lost the Willard business because the quality of its service was not adequate, according to attorneys for the hotel. "The individual claims against Merella Peterson are utterly baseless," said Richard L. Cys, the attorney for Inter-Continental Hotels and Peterson. "We don't believe there is any support for the allegations against her." Peterson now works for Inter-Continental in Montreal.

Fight for the Inside Track

The lawsuit, scheduled to go to trial next year, reflects the struggle among limousine companies to get the inside track at the big luxury hotels, regarded as the most stable and profitable clients in the market.

"Hotels offer an enormous pool of potential clients," said William F. Wadsworth, owner of the District's Wadsworth Limousine service. "It's one of the most lucrative parts of the business."

According to some owners and drivers interviewed for this article, competing limousine companies frequently ply hotel staff with cash payments, free limousine service and other favors to win business. Far less common but also available in some cases are prostitutes' services for customers, these owners and drivers say -- a contention other owners dispute.

One Washington hotel, for example, ordered a limousine company off its property after a guest reported that a limousine driver asked him whether he was interested in drugs or women for the evening, according to a former official of the hotel, who asked not to be identified.

A former driver for a local limousine company said in an interview that he often transported women to hotel rooms in some of Washington's premier hotels where they served as "escorts" for the limousine company's customers. One woman, whom he drove to such meetings on 20 or 30 occasions in the late 1980s, told him she went to the hotel rooms to provide sex for the clients.

"Most of that's a lot of hogwash," said Wadsworth, referring to comments about a prostitution link to the limousine business. "I doubt that many companies do that. There may be occasions where they will go out and get a woman for an evening. But it's not a regular thing."

"The limousine industry as a whole has a probably deserved bad reputation," said Jon Goldberg, president of D.C. Limo. "Wharton graduates don't get into the business. It's hard to get bank loans. ... There are a lot of scoundrels out there, which makes it tougher for the many honest, hard-working people in the industry. We really battle the public perception of us."

"It's a very cutthroat business," said George A. Coupe, owner of one of Washington's largest limousine companies, Admiral Limousines, which has outlasted many of its competitors with 23 years in the business. "It's competitive."

And it's particularly competitive in Washington. The area is fourth in the country in the volume of limousine business it handles -- behind New York, Chicago and Los Angeles, according to Wayne J. Smith, executive director of the National Limousine Association. There are about 120 companies that provide that service here, but only about 25 of those have more than 10 cars, with the remainder run as part-time businesses by those who frequently own and drive only one or two cars.

It is unusual that anything about the limousine business comes to light, as it has in the case against the Willard and Bethany. Most limousine companies are privately owned, and their agreements to do business with hotels are usually verbal, rather than written.

But Marquis had a written contract for 1987 with the Willard that could be renewed for another year or canceled with 60 days notice before it expired. Marquis alleges that the Willard broke its exclusive contract with the company. Peterson, then the Willard's director of sales, diverted the business of large groups to Bethany by recommending them instead of Marquis, the suit alleges.

Court papers contain letters and memos in which Willard officials reminded staff members, after complaints from Marquis officials, that Marquis was to be recommended first to all clients. Only if hotel guests requested another company could such a referral be made.

The Willard did not renew its contract with Marquis for a second year because of deficiencies in service, including drivers who did not speak English very well, or who did not show up to pick up important guests, including a part owner of the hotel, according to the Willard's response.

These allegations are disputed by Marquis's owners, Laila Morcos, a former World Bank employee and real estate broker, and Lucie Kachadourian, a former longtime employee of the Madison Hotel. The women met as flight attendants for Kuwait Airlines and started Marquis in 1986.

Marquis's attorneys have said the $2.3 million in damages includes $50,000 in lost profit for business that was diverted to Bethany in 1987 and $150,000 in lost profits for 1988. Bethany claims that the Willard failed to give proper notice and therefore the contract was automatically renewed. The Willard denies this.

Marquis also seeks $50,000 in lost profit and $1 million in punitive damages from Bethany because of its alleged wrongful interference in the Willard contract in 1987; and the same amounts for alleged interference by Peterson and Inter-Continental in 1987.

A Highly Sought Contract

A contract with the Willard, a historic landmark that reopened in 1986, was a vigorously sought commodity when the hotel opened, said Kachadourian. "Everybody wanted it," she said. "Everybody bid for it."

The big luxury hotels that cater to large corporate and diplomatic clients, such as the Willard, the Park-Hyatt, the Four Seasons and the Madison, are the most sought-after accounts for the limousine companies. At such hotels, limousine companies can gross hundreds of thousands of dollars a year, according to limousine company owners.

But often, the hotels also look to the limousine companies to suggest to their clients that they use a specific hotel. It was the Middle Eastern business that Aburish's company could bring to the hotel that attracted Willard officials, according to the suit.

Aburish, one of 12 siblings -- three others are involved in the company -- is a short stout man with a florid face who is frequently seen in the bars of local hotels drinking champagne in the company of younger women. "I think Mr. Aburish is following his Middle Eastern style of upbringing," said Thomas Gurtner, a former general manager of Washington's Westin Hotel. "He's a trader. ... You could see him at the Grand Bazaar in Cairo."

"I am very well loved," Aburish said in an interview. "I shouldn't talk about it, but I have this kind of personality."

Aburish's family is originally from the town of Bethany in East Jerusalem. Hilmi Aburish worked for the Jordanian Embassy between 1967 and 1972 as an administrative officer. He also worked with the Embassy of Qatar between 1972 and 1978. Up until 1987 he continued to work for the Embassy of Qatar, making travel arrangements for various members of the royal family.

Attracting the business of Middle Easterners is particularly important to hotels in Washington for several reasons. They frequently travel to the United States during the summer, when many lobbyists and corporate clients have deserted the capital and luxury hotels most need business. And, they travel in large groups, often taking up numerous suites or, indeed, floors of hotels and ordering lavishly from the hotels' restaurants and room service for weeks at a time.

One limousine-company owner said he referred a group of Middle Eastern guests to a well-known Washington hotel where they stayed for six weeks -- spending over a million dollars. He said he got no commission from the hotel for the referral.

There is disagreement among several of the Aburish brothers about the significance of their Middle Eastern contacts, but Khalil Aburish speaks proudly of close relationships. "We have a lot of connections with the Middle East," he said, citing the embassies of Saudi Arabia, Jordan, Benin, Brunei, Bahrain and Lebanon, among others.

"We protect them," he said of the family's relationship with the embassies. "They like us a lot. We don't repeat what we see. Officials don't like big mouths."

Khalil Aburish said that having contacts with the embassies does help to attract business for the hotels. "Whoever comes here has money, and they spend it," he said.

However, Hilmi Aburish denied that the hotels use his limousine service because of his Middle Eastern connections. He said it is Bethany's good service that attracts business to the company.

"He's {Hilmi Aburish} put business into my hotel when I was there," said Gurtner, formerly of the Westin and now general manager of the Four Seasons Hotel in Newport Beach, Calif. "He says 'If you give me business, I will give you business.' "

Bethany often promises to book Middle Eastern visitors into the hotels they do business with, according to hotel sources. Indeed, the Madison Hotel stopped using Bethany because it didn't produce the amount of business the hotel expected, and wasn't providing acceptable service, according to hotel owner Marshall Coyne.

Marquis officials contend that the Willard broke its contract and shifted the limousine business to Bethany in order to get Middle Eastern business.

In its response to the Marquis suit, Bethany denies that it promised Middle Eastern business to the Willard. Documents filed in court include a letter from the Willard's room division manager, Lewis Fader, to Marquis stating that the hotel was changing its limousine company "for reasons of potential business and future contracts." In addition, Fader said that the former general manager of the hotel, J.T. Kuhlman, hired Bethany when the contract with Marquis was not renewed because of the Saudi business that they potentially could represent.

Kuhlman is now the president of Inter-Continental Hotels.

"The fact that some of Hilmi's clients choose to stay there has nothing to do with anything," said Richard Shadyac Sr., the attorney for Bethany. "Marquis failed to properly monitor what was assigned to them by the hotel."