The District of Columbia Alcoholic Beverage Control Board, shaken by reports of a grand jury investigation of its chairman and his top aide, has frequently been viewed with suspicion because of its influential and politically sensitive role as the city's dispenser of valuable liquor licenses.
But the disclosure of the probe of Chairman Robert C. Lewis and board staff director James E. Boardley appears to have left other board workers in a state of shock.
"Usually when an investigation is going on, you get some rumor or whiff of something. But this just hit like a bomb," one longtime ABC staff member said yesterday. On Tuesday, federal prosecutors used grand jury subpoenas to seize ABC files on more than a dozen liquor licenses and Lewis' personal files since he joined the board in 1979.
Lewis, who is also director of the city's Department of Licenses, Investigations and Inspections, and Boardley are targets of the federal grand jury investigation into allegations that they attempted to secure a personal interest in operations at the new Hechinger Mall at H Street and Bladensburg Road NE in exchange for favorable consideration in liquor and building licensing.
Lewis declined comment on the investigation yesterday, saying only, "I'm innocent of the allegations." Boardley could not be reached for comment.
Three years ago, Lewis staged an elaborate fund-raising party alongside the indoor pool at his Northwest Washington home for Marion Barry when Barry was running for mayor. But yesterday, Mayor Barry declined at a press conference to give Lewis a vote of confidence.
Barry also declined to discuss the case and would not say whether the city will conduct its own investigation of the officials. City administrator Elijah B. Rogers said city inspector general Joyce Blalock or the police department might be asked to investigate the allegations.
Sources familiar with the allegations said that one of the persons allegedly approached by Lewis and Boardley was Daniel Russell, described by one source as a "top executive" with the developer of the mall, Hechinger Enterprises. One source said he was not the only person approached, but added that "fewer than five" representatives of Hechinger Enterprises were coontacted, though the precise count depended on how the word "approached" is defined.
A District Building source said prosecutors told him that Boardley made the initial contact, but that "before it was all done, both of them were involved." The source said the allegations center on an attempt by Lewis and Boardley to make sure that a liquor store "in which they would have an interest" was eventually located in the mall. "The end result would be that the store they wanted in the mall would be there," the source said, though he said he was unsure of further details about the alleged extortion of bribery attempt.
ABC board member Larry C. Williams said the agency's offices were "like a graveyard" upon hearing news of the investigation. Williams, who was appointed to the board with Lewis, said he has not been briefed on the allegations.
Williams said that to his knowledge no liquor license matters concerning Hechinger Mall have come to the board. He said it would be unusual for anyone from the ABC to talk to a potential license holder before an application is actually filed.
"It's never been our function or prerogative to seek out licensees," said Williams.
However, Thomas Motlagh, an Iranian national who sold his liquor license in another D.C. club, has applied to open a liquor store at the Hechinger Mall.
Williams said that in practice, Boardley and his staff did the vast majority of the work leading up to an actual hearing on a liquor license. "When it comes to us, it's already been filed, investigated, documented and all that stuff, and only then is it scheduled for a hearing."
Dwight Cropp, executive secretary to Mayor Barry and the third of the board's three members, said he was "shocked" by the investigation had no knowledge of it. He declined further comment.
Another source close to the ABC Board said that workers at the agency were "stunned" by the allegations. "We were thinking about it this morning," the source said. "It sounds almost bizarre to do a thing like that."
When Barry took office in January 1979, the ABC staff was one of several he shook up with immediate changes, vowing to erase its image as an inefficient, insensitive and politically motivated office dominated by Julian R. Dugas, a longtime ally of defeated Mayor Walter E. Washington.
Still, Barry said yesterday that "I don't think we've had any serious problems with the ABC Board in the past. All over the country where you find officials in these positions with discretionary authority, there are sometimes problems."
Lewis, an architect and former city planner, who replaced Dugas as head of the licenses' office, immediately reorganized the ABC staff, demoting close associates of Dugas, all of whom eventually left city government. Lewis named Boardley, then a staff investigator, to head the office.
Dugas, who staff members said rarely attended ABC board hearings, was widely believed to control the board's vote along with a close associate, James W. Hill, a former board member and a lawyer now in private practice.
Sources within the city government said yesterday that Dugas' influence was much greater than Lewis has been able to achieve, with Dugas enforcing ABC decisions through his weblike political strength in Mayor Washington's administration. One former ABC board member said yesterday that Dugas "was one of the most powerful men ever in this city. He put his men in all the key positions. He had a vise grip."
Although the current probe is the most serious legal challenge the board has faced in recent years, the ABC office has a turbulent history of controversial rulings that often have pitted community groups against businesses in a battle over the lucrative licenses.
At various times, community opposition has ranged from that of affluent Georgetown residents who claim their historic neighborhood is flooded with bars that draw noisy crowds and cause traffic jams to residents of poor sections of the city who feel liquor stores have been dumped in excessive numbers in their neighborhoods.
The ABC board, with the power to decide the fate of liquor licenses, is continuously beseeched and besieged by persons who are almost unshakenly opposed to one another.
The District has limited the number of liquor stores in the city to the current 330. Thus, persons who want a license have to buy the rights to an existing one. Competition for the licenses can be fierce and expensive, but the reward of a successful license battle can be substantial profits.
Dallas Evans, the ABC deputy staff director who was named by Barry as interim replacement for Boardley, said yesterday the city has about 1,400 other liquor licenses held by restaurants and stores that sell only beer and wine.