Baltimore's liquor board dismissed charges of numerous violations against an Upper Fells Point bar yesterday, suggesting that its top employee had unfairly treated the establishment's owners by keeping the bar closed for six months before filing charges.
Club Eldorado had been alleged to be in violation of multiple state liquor regulations, including having been closed for years and then recently reopened by brothers who were using a liquor license held by a man they didn't know.
State law requires that a "licensee shall be the actual owner and operator of the business conducted on the licensed premises." In addition, the law states that if a license goes unused for more than 180 days and is not in the process of being transferred to a new owner, the liquor board has the right to void it.
But instead of taking action against Club Eldorado, the liquor board criticized its executive secretary, Samuel T. Daniels Jr. Board Chairman Stephan Fogleman said he was upset that Daniels had seized the license for Club Eldorado at 1609 Bank St. in January but didn't file charges against the new owners, Miguel and Adan Salazar, and the licensee, James N. Stupka, until July.
"We're concerned about certain due process aspects of this case," Fogleman said, speaking on behalf of the unanimous three-member board. "We believe that there has been a delay that was unacceptable. We cannot understand this process that the agency used."
The club's owners said they had been financially hurt by the delay, noting they have been unable to open the bar since the start of the year. An attorney for the brothers said he had tried to transfer the license from Stupka to the Salazars numerous times but had been blocked by Daniels.
"This is ridiculous," said Miguel Salazar, 46. "We have been losing money."
The board's decision to drop the charges -- despite its top manager's advice -- could also indicate a growing rift between the board, which was appointed by Gov. Martin O'Malley in April, and Daniels, who was picked for the position by the previous liquor board appointed by Gov. Robert L. Ehrlich Jr.
Daniels, who served as chief liquor inspector for six years before he was promoted to his current position, headed up the Eldorado investigation and kept the bar's file in his office. At the hearing at City Hall yesterday, he said he had never witnessed a licensing situation as "aberrant" as the one at the Eldorado but had little to say after the board issued its decision.
"The commission rendered a decision that they thought was the correct decision," Daniels said. Asked if he was upset, Daniels said: "I stand by my work."
Police officers testified yesterday that they first visited the bar Jan. 5 after receiving complaints about loud music. Although a manager produced Stupka's liquor license, he could not produce employee records, which must be present according to state law. A barmaid provided a false identification card and both fire doors were blocked. Police shut down the bar for the night, said Officer John Kowalczyk.
Kowalczyk said that police returned Jan. 13 and found that employee records were still missing and that alcohol had been purchased from liquor stores and not a distributor, as mandated by law. Kowalczyk said that while interviewing Adan Salazar, officers realized he had no idea who Stupka was. It also became clear that Adan Salazar did not know that he needed to transfer the license to his own name, Kowalczyk said.
Daniels was called to the scene and asked his own questions. In a report he presented to the liquor board yesterday, Daniels stated that Adan Salazar told him that he had purchased the bar from Frederick J. Radtke, an Essex resident, for more than $500,000 and that Radtke was helping him and his brother run the bar.
Radtke and his wife, Sherian, owned the bar for years, Daniels said, and leased it to people who wanted to run the establishment. In recent years, however, it has been mostly closed, a situation that put its license at risk under local law.
The law, referred to as the "180-day rule" by industry insiders, became an issue several years ago when Daniels alleged that license brokers were subverting the statute in order to keep licenses alive and make a profit off them at a later sale. The previous board tried to crack down on shuttered bars, but in the end had to seek advice from the attorney general's office to make sure it was interpreting the law correctly. The board reinstated at least one license it erroneously voided.
It was that law that Daniels alleged Radtke, the owner of the bar, and Stupka, the licensee, were trying to skirt.
Daniels said Radtke told him in an interview Jan. 13 that Stupka was a "straw purchaser," or someone who doesn't have a financial interest in a bar or tavern. Daniels said Radtke said he transferred the license to Stupka in order to avoid the 180-day rule. Radtke said that his attorney told him to wait to transfer the license from Stupka to the Salazar brothers until after O'Malley appointed a new board.
Radtke was summoned to the hearing but did not appear yesterday. Stupka left the hearing immediately after its conclusion and could not be reached for comment later.
The old board approved the transfer of the license to Stupka in May 2006 despite evidence that the bar had been closed longer than 180 days. At the time, Stupka was presented as the purchaser of the business, and when asked if he thought he was getting off easy in regards to the 180-day rule, he replied: "No, sir. I live by the rules."