Questions abound after IRS raids; No explanation given for seizing files from Hardesty's restaurants


In the days since armed IRS agents raided two Annapolis landmark taverns last week, confiscating computers and business files and turning away loyal customers at the doors, there have been more questions than answers about what prompted the high-profile search and seizure.

Business owners in the Annapolis historic district -- where picturesque views of Colonial storefronts, uniformed midshipmen and high-priced sailboats are much more common than federal investigations -- said they have never seen anything like it.

Because the raids at Middleton Tavern and O'Brien's Oyster Bar were so visible -- boxes of files and whole computers were carted out of the taverns in the middle of the day and federal agents were seen turning away food delivery trucks -- tongues are wagging in the state's capital.

"People keep asking me, 'What's going on with that?' " said W. Minor Carter, president of the Ward One Residents Association. "Everyone is wondering about it. I don't think anyone knows anything. Not even local officials or the mayor."

IRS officials, who closed the two popular drinking and dining spots for much of Tuesday, will say only that the searches were "of a financial nature."

Both restaurants were open for business as usual on Friday.

Middleton and O'Brien's both are owned by well-known local businessman Jerome Hardesty, who has been at the center of controversy before.

Hardesty founded the Maryland Wine Festival in 1987 to publicize area vineyards. But five years later, Maryland winery owners boycotted the festival, and in 1997 the owners of 10 Maryland wineries failed in an attempt to take over the festival from Hardesty.

"The guy is certainly a controversial figure in this town," Carter said.

Despite Hardesty's well-publicized battles, his two restaurants are mainstays in Annapolis. O'Brien's is a General Assembly hangout. Middleton, with its prominent location in the heart of the City Dock area, is one of the city's oldest continuously operating pubs, dating to the 1700s.

"These places are part of the fabric of historic Annapolis," said Peggy Wall, president of the Annapolis and Anne Arundel County Conference and Visitors Bureau. "Especially Middleton. That really is the place where, when tourists come to town and they ask where they should eat, everyone tells them, 'Go to Middleton.' "

Wall said that whenever travel writers -- particularly writers from abroad -- come to Annapolis, Middleton is the place they are directed to by the Visitors Bureau.

"It's one of the places where we can tell people George Washington is known to have eaten," she said. "Now I know most people like to say, 'George Washington slept here.' But here in Annapolis, we stick with the 'George Washington dined here.' "

Aside from the heavy-hitting Maryland politicians who are frequent visitors to O'Brien's, its other claim to fame is that it is considered a great spot to watch Navy football games -- second only to Navy-Marine Memorial Stadium.

In addition to the two restaurants, federal agents have confirmed that they searched two Anne Arundel County homes and an Annapolis office affiliated with the businesses.

Hardesty could not be reached for comment about the searches, but the managers of the restaurants have said they do not expect more closings because of the matter.

"I guess the only people who really know what's going on are Hardesty and his attorney," Carter said. "And they're not talking."

Pub Date: 2/28/99

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