For the first time at least since Prohibition, the House of Representatives has gone into the retail liquor business.
Somewhere in the tunnels and garages beneath Capitol Hill, House clerks have set up a burglar-resistant warehouse to safeguard a full inventory of bourbon, scotch, vodka and gin.
The liquor will be sold for catering purposes only. Prices will be pegged to average retail prices and the profits will be used to offset deficits in House restaurants and cafeterias, House officials said.
The new venture has evoked an angry reaction from District of Columbia retail liquor dealers, who charge that the Congress is going into competition with them. One Capitol Hill retailer, Jules Gordon, said his Congressional Liquors store at 401 First St. SE stands to lose up to $1,000 a month in sales.
Traditionally the House has purchased hard liquor for receptions, luncheons and other events in the Capitol and congressional office buildings from retail liquor stores nearby. Those stores have garnered the profits.
But now, in what is being billed as an efficiency move, the House will buy its own liquor wholesale from a national distributer based in Philadelphia. The liquor will be sold to congressmen and their guests -- including trade associations and lobbying groups -- who organize events on the Hill.
In the fiscal year that ended last October, the House restaurant service placed orders with local liquor retailers totaling $70,000, acording to James Abernathy, clerk to the House Administration Subcommittee on Services.
The $70,000 figure does not represent the total amount of liquor purchased for House functions, Abernathy said. Members and their guests have the option to purchase their liquor direct from commercial outlets.
"Virtually every night if you were to come up here you could find as much liquor and food as you could possibly eat and drink," said a Hill staffer who asked not to be identified.
Rep. Ed Jones (D-Tenn.), chairman of the House Administration Subcommittee on Services, said that he is under pressure from the leadership to keep the restaurant service profitable. Selling liquor for profit is one way to do that.
"I get kicked in the seat of the pants when we don't make a profit and if you've ever been in the restaurant business, you know how hard it is to make a profit," Jones said by telephone from his Yorkville, Tenn. office.
But local dealers are nonetheless angry. "I think it is an outrage against the local free enterprise system that the government should go into this business," said Milton Kronheim Sr., chairman of one of the largest wholesale liquor businesses in the city.
As head of the subcommittee staff, Abernathy administers the system day to day. "We're not doing anything sinister or illegal. We don't buy our lettuce over the counter at the A & P or the Safeway, so we're merely doing the best job of buying," he said.
Rep. Frank Thompson (D-N.J.), chairman of the full House Administration Committee, said the new procedure was initiated "at the staff level after considerable discussion to which I was privy" and the acquiescence of the House leadership.
"It is efficiency, and also profit, let's be unabashed about it," Thompson said. To the complaints by local retailers, Thompson added, "We're certainly not trying to put them out of business."
The brands that are being offered through the House catering service are not the most nationally prominent, nor the highest priced. One congressional staffer described them as "pouring liquor" brands.
Among them are MacArthur's Scotch; a 12-year-old scotch, Pinwinnie, Old Hickory bourbon and Skol gin and vodka. Abernathy said that no bids were involved in the selection of the supplier because bids were not required by statute.
The supplier, Publica Distillers Products Inc. of Philadelphia, supplies a number of military installations, according to Sam Kleinman, a vice president of the firm. He said the first order placed by the House restaurant was for 450 cases and that wholeslae prices plus freight were charged.
Rep. Jones said the practice of buying liquor from retail dealers for House members and their guests "has always been a custom since Prohibition ended."
Hard liquor is still banned in the cafeterias and restaurants on Capitol Hill, though beer and wine are available.
Abernathy, who bristled at several questions about the new liquor supply, said, "It's not a palatable political subject for the simple reason it happens to be whiskey." Abernathy would not disclose the location of the stockpile, but Thompson said, "I think it's somewhere in one of the garages in one of those innumerable corners where you couldn't fit a Volkswagen."
Local retailers were fearful that the new service might undercut their shelf prices, but Abernathy said, "We're charging basically shelf prices." A spot check of one of the new brands, MacArthur's Scotch, showed a $5.95-a-quart price through the House catering system and a $5.99-a-quart price at a retail store in the city.
By purchasing directly from the distributor, the House will bypass the 6 percent District of Columbia sales tax as well as the $1.50 per gallon District liquor tax.
District Del. Walter Fauntroy was asked to intercede on behalf of local merchants. Fauntroy could not be reached for comment, but his legislative aide, Howard Lee, said efforts to sway Jones' subcommittee have been unsuccessful.
To retailers' claims that under the new system there might be "leakage" to unsponsored groups and Hill employes, Jones said, "We're not going to do that. The stuff is under lock and key and is guarded and protected like money."
However, Jones acknowledged that "somebody might take a half pint home with them. It belongs to the people who pay for it anyway."
Abernathy said he doesn't expect the House liquor business to grow beyond the scope of the previous system. However, he said, members who ask for brands other than those carried in the House inventory will be charged a dollar a quart for handling and billing charges.
"This is just an experiment," said Jones, "it's brand new. It may not work good, I don't know, but we're going to try it and see."