The Follies, a private film club in Southeast Washington, has never obtained a permanent District of Columbia liquor license. But since the club opened three years ago, it has managed to serve beer and wine on at least 105 different days, according to records of the city's Alcoholic Beverage Control office.
Club officials accomplished this by winning routine ABC Board approval for $7.50-a-day temporary liquor licenses that are designed for private or public picnics, carnivals, university social events, fund-raisers and other similar activities.
The Stardust Disco Hall, a now-defunct, storefront club located in a dingy strip of businesses at 1739 Seventh St. NW, picked up so many temporary licenses that beer and wine flowed there for more than 100 days during late 1979 and 1980, according to ABC records.
And the Club House, a rental hall located at 1296 Upshur St. NW, is the scene of a social group's twice-weekly beer and wind parties. The club's owners said they can't get a regular liquor license because the building is across the street from a school and they do not have restaurant facilities, a requirement for most D.C. liquor license holders. Nontheless, the club regularly gets temporary liquor licenses, according to club officials and ABC records.
A review of available ABC records by The Washington Post last week turned up numerous examples of businesses and establishments that have used the temporary licenses to dispense beer and wine nearly year round.
William O. Woodson, a retired chief investigator for the ABC office and now a liquor licensing consultant, said the repeated use of temporary licenses can help clubs circumvent the detailed and expensive procedures that accompany the awarding of standard, year-long liquor licenses.
"Some might not qualify if they were examined," Woodson said. "They are trying to do indirectly what they can't do directly."
Applicants for licenses other than temporary permits are required to disclose personal and business interests and must appear at a public hearing before the license is granted. The process can be lengthy and cost thousands of dollars in legal fees if the license is protested by community groups or other businesses. Both groups frequently express vehement opposition to new bars.
In contrast, temporary license seekers fill out a one-page application that is informally acted upon by at least two of the Alcoholic Beverage Control Board's three members -- sometimes on the same day it is submitted -- and there are no public hearings. Applicants are required to sign a statement allowing an FBI records check, but the licenses are routinely granted before the check can be completed.
The ABC Board regulates the city's multimillion dollar retail liquor industry, including more than 300 liquor stores and more than 1,400 other retail alcoholic beverage businesses. Its decisions can be worth hundreds of thousands of dollars to a business and can have major effects on residential and commercial areas where liquor establishments are allowed to operate.
Two weeks ago, the liquor agency's two top officials, Board Chairman Robert C. Lewis, 43, and staff director James E. Boardley, 38, were placed on involuntary adminstrative leave after the U.S. attorney's office informed Mayor Marion Barry that the two officials are targets of a bribery and extortion probe by a federal grand jury.The investigation involves allegations that one or both of the officials threatened to make it difficult for developers of the new Hechinger Mall in Northeast Washington to get the necessary liquor and building licenses for the mall unless a person designated by the officials was allowed to open a liquor store there, according to sources familiar with the probe.
Lewis also is director of the city's Department of Licenses, Investigations and Inspections, a cabinet position in the Barry administration.
Neither Lewis nor Boardley could be reached for comment on the board's policy for granting temporary licenses.
Dallas Evans, named acting ABC staff director after Boardley was placed on leave, said the examples of frequent use of temporary licenses "does raise questions" about the board policy for such licenses. He said that on Friday he discussed with board members the possibility of clarifying the rules for granting temporary licenses.
According to ABC regulations, the temporary permit ". . . shall authorize the holder . . . temporarily to sell beer and light wines on the premises. . . . Such permits may be issued for a banquet, picnic, bazaar gathering, where food is served for consumption on the premises." The records indicated more than 250 temporary, or Class 'F', licenses were granted last year.
ABC records showed that all three board members, Lewis, Dwight S. Cropp, and Larry C. Williams, routinely approved temporary licenses for establishments such as The follies, The Stardust Disco and The Club House. Evans said the board members are given each temporary license applicant's cumulative file jacket, which contains all its previous requests along with the latest application. Some files are more than an inch thick.
Both Williams and Cropp said they were unaware of any possible misuses of temporary licenses by businesses or other establishments.
"We take the staff's advice on [the licenses] . . . we don't have time to do in-depth investigations behind the staff," said Williams, who is also an attorney in private practice.
Cropp, who also is executive secretary to Mayor Barry, said "I spend about one-eighth of my time dealing with ABC board matters, if not one-tenth."
The ABC records showed that the liberal dispensing of short-term licenses had also been followed by the previous board headed by Julian R. Dugas, a poltical ally of former Mayor Walter E. Washington.
In a court case that arose out of community attempts to block a permanent, attorney Courts Oulahan said the board acted improperly when it also gave two temporary licenses to the restaurant, the Cafe Matilda, at 3263 M St. NW. The temporary licenses permitted Cafe Matilda to serve beer and wine for a three-week period in September and October, 1979, five months before the board approved the restaurant's permanent license, Oulahan contended in court papers.
"A Class 'F' license is for an event or special gathering, not the general sale of beer and wine to regular customers for nearly a month," Oulahan charged.
ABC officials did not inform Oulahan of his clients that they had passed out a temporary license to the restaurant, and he accidentally discovered it while reviewing records at the ABC office, according to the court papers.
The city has denied in court papers that the ABC board acted improperly in granting the Cafe Matilda a temporary license. The case is pending before the D.C. Court of Appeals, which hears challenges to ABC Board decisions.
The Follies, a paid-membership club at 24 O St. SE that features homosexually oriented films, is open 24 hours a day every day and is the successor to the Cinema Follies, an L Street SE film club in which nine men died in a fire in 1977.
The club's manager, who only identified himself as T. O'Neil, said it does not have a standard liquor license, such as a Class C-Theater permit, because "we don't wish to have one."
O'Neil said the club gets the temporary licenses to serve liquor for various banquets held at the club. He said the club sponsors a "great deal" of the affairs as "general banquets" for the club's members.
He said the liquor served at the banquets ranges "from beer and wine to hard liquor. It depends on the party and who is hosting."
ABC regulations specify that temporary permits allow only beer and wine to be served.
Nearly all the temporary licenses for The Follies were obtained by Edward Dawson, the former president and manager of The Follies, who resigned Feb. 24, according to ABC records. On Nov. 4 of last year, Dawson submitted a temporary license application on behalf of The Follies, according to ABC records, and also for another private gay club, the Astoria Arms. Two days later, ABC board members Lewis and Cropp, acting on the recommendation of staff director Boardley, approved both applications, according to the agency's records. Efforts to reach Dawson for comment were unsuccessful.
"It's a fine arrangement," The Follies' O'Neil said, referring to the temporary licenses.