Partial Transcript of Appeal to ABC Board Decision To Grant
Sai Thai Cuisine in Jonesboro (in a dry county) a Private Club Liquor License
October 15, 08
Introduction:
This transcript demonstrates the favoritism shown to those applying for private club license in dry counties and the disdain and contempt shown by certain members of the Board to those opposing these applications. In essence the ABC Board has found a way to interpret the law so as to allow these public restaurants to do business as private clubs so they can sell liquor in dry counties. To qualify as a private club, the public restaurant has to have 100 members and somehow do business as a non profit organization. Then the restaurant declares they are doing something benevolent for the community, and somehow they qualify according to the ABC Board as a private club. See red font below to follow this in the transcript. (S 257 private club licenses were granted in the past seven years. 142 were in dry counties and 115 were in wet counties.
About 15 private club applications to serve liquor have been made in Craighead County the last five or six years. Only two or three have been denied. Yet in the last vote on the wet-dry issue in Craighead County in 1973, dry status was maintained by almost a 2 to 1 margin.
In this transcript you will see how the opponents are treated and just how the ABC Board justifies itself in making its decisions.
Ron Fuller was Chair of the ABC Board and presided over the hearing. Paul Schmidt was the Attorney appealing the case on behalf of Bob Hester. Scott Hunter, Jr. was the Attorney for Sai Thai Cuisine restaurant. The ABC Board attorney present was Milton Luken.
Note the way Ron Fuller and the ABC attorney Luken guide the applicant and her attorney through the process by interrupting to help them clarify things several times. But note the difference in how he treats those opposing the decision especially in Ron Fuller's tirade (long paragraph in red font with his name in large red font somewhat toward the end of this partial transcript.)
Hearing:
Ron Fuller: Hearing today I will call Thai Cuisine of Jonesboro.
Swore everybody in.
Attorney Schmidt: Mr. Fuller, if I may before we go. There is still some discovery and things that (Interrupted here by Chair Ron Fuller)
Ron Fuller: (Fuller interrupted Schmidt and said "Has Bob been sick. Has Mr. Hester been sick? He is usually down here about every other day?" [Ridiculing the one opposing the Sai Thai license]
Bob Hester: They put the agenda out about a week.
Ron Fuller: (Interrupting & talking to Bob Hester) You are down here all the time; You know how we operate.
Attorney Schmidt: We would have preferred to have more time to conduct discovery and properly prepare our case and our opposition to this hearing, and I just wanted to put that on record.
Ron Fuller: Put that on record. I talked to the Director about that a few minutes ago, and he informed me that you'll were given the notice under the ten day rule that we operate under down here that you'll had adequate notice. He is not in here. If you would like me to bring him here and explain that, I can.
Attorney Hunter: (To his client Sai) Can you explain to the Board what charitable organizations you are going to benefit?
Sai Thai: I have two. My daughter is a member of the Foundation of Art in downtown Jonesboro and she ___________________to benefit children that can't afford that. And we also have ___________ St. Bernard hospital. I want to help out cancer research _________? (Could not understand part of this on tape.
Attorney Hunter: And haven't you had discussions with the Director of Fund raising at St. Bernard's ?
Sai Thai: Yes, yes
Attorney Hunter: To tell her that those were two causes you would like to help? Foundation of Arts and at St. Bernard's.
Ron Fuller: Are you also involved with catering to the community or is this going to be strictly a sit down restaurant?
Sai Thai: Couldn't understand what she said. .
Attorney ABC Attorney Luken: . How does she plan to (couldn't understand one word) the Foundation of Arts and St. Bernard Hospital.
Attorney Hunter: She said that there is like sponsor of underprivileged youth that you know want (Interrupted by ABC Attorney ABC Attorney Luken)
ABC Attorney Luken: Sponsorships?
Attorney Hunter: Right, that want to participate.
Sai: scholarships.
ABC Attorney Luken: Private Clubs?
Attorney Hunter: The Private Club is going to help fund that.
Ron Fuller: That is normally what people do. You are going to sponsor like magazine ads, that sort of thing, sponsorships like give us a name and put your name on the line that is the way it is normally done.
Attorney Hunter: I may not have explained that. Kind of like you sponsor like a soccer team or something.
Skipped some here. Attorney Hunter asked Sai some questions about her experience in serving liquor.
Ron Fuller: Counselor, do you have any questions?
Attorney Schmidt: Yes, I do.
Attorney Schmidt: Are you the managing agent of the private club?
Attorney Schmidt: I understood that. Is this a Private Club. It is a Private Club, Limited Purpose Private Club. Is that correct.
Sia: Yes
Attorney Schmidt: Is that what Stage One Repertory Theatre is intended to be doing business as Sai Thai Resaurant?
Sai: Couldn't understand.
Attorney Schmidt: Okay.
Attorney Schmidt: Ms Sai, how will the Stage One Repertory Theatre organize. Who will organize that?
Attorney Schmidt: Ms Sai, Do you recognize this, is this the articles of incorporation for Stage One Repertory Theatre? (shows it to her)
Attorney Hunter answers for her:
Attorney Schmidt: Could I ask that the witness be allowed to testify without (interrupted).
Ron Fuller: Well, we act very informally here. We are not a court, and the Attorney - you have Mr. Hester up here you can consult with him to your heart's content.
Attorney Scott: The reason, Mr. Schmidt, I did that work so I may know more about it than she does.
Ron Fuller: To Attorney Schmidt: You have dealt with these things before. You know how these things operate. There seems to be a lot of former clubs floating around where people do come in and sign up. I wanted to make sure that you were familiar with how that operates before we spend hours as some Attorneys do talking about them and they don't know how they really work. We will accept the fact that you know how this operates.
Attorney Schmit: Ms Sai, please explain Paragraph A what the purpose of the Stage One Repertory Theatre is.
Attorney Hunter: This is a non profit corporation and the purpose is as is said here and allow charitable, scientific. (Could not understand what he said on tape here.
Attorney Schmidt: Miss Sai, in the 2nd part of the Stage One Repertory Theatre Articles of Incorporation it says this is a non profit corporation for public benefit. Is that correct?
Attorney Hunter answers: Correct.
Attorney Schmidt: In Paragraph A the purpose for which this organization is organized or is established is a quality full fledged local community theatre company that allows a format in which area artists of all ages and ethnicity may receive a modem to display their talents and other purposes which are exclusively charitable, scientific, literary, and educational within the meaning of Section 501 (c)(3) of the Internal Revenue Code 1986 and any corresponding provision of the US Internal Revenue Law.
Attorney Schmidt: Is that correct?
Sai: (Couldn't understand but think she said yes.)
Attorney Schmidt: Okay. And underneath that in Paragraph B notwithstanding that any other provision in the article this corporation shall not carry on any other activities not being carried on by corporation exempt from federal income tax under Section 401 (c)(3)of the Internal Revenue Code of 1954 or any other corresponding provision of any future US Internal Revenue law and corporation contributions which are deductible under Section 170 (c)(2) of Internal Revenue Code of 1954 or any other corresponding provision in any future US Internal Revnue Law. . Is that correct?
Sai: Yes
Attorney Hunter: (Interrupting) Let me just say to conserve time once again. You know that this was a Non Profit and I did a DBA (doing business as) for her restaurant. You saw that. That is all in the file.
Ron Fuller: That is the way it works. It becomes a restaurant with a different purpose. So that could be in there, but obviously they have changed it. But our Attorneys and the Secretary of State have said or approved this thing, or this Board would not be sitting here today. You are welcome to make a record and talk about all of this, but we will accept that our Attorneys have qualified this thing for us to vote. That is the way this thing works.
Attorney Schmidt: Ms. Sai, have you made any amendments to the by laws of State One Repertory Theatre, or have you'll revoked the bylaws from the
Ron Fuller: Attorney Luken, you feel free to get in here as counsel too.
ABC Attorney Luken: Don Bennett, our senior staff Attorney reviews all of these private club applications that come in, and I am sure that Mr. Bennett did review that and probably has found that it is a non profit corporation which is properly registered with Secretary of State office. Obviously this private club law requires that a non profit exists for some other purpose other than the consumption of alcohol beverages. I think Ms. Sai has testified that she has intends to have fund raisers or benefits for a couple non profit___________. She has also testified that she is going to have a restaurant. However, we have gotten into this question before in a prior case when one of the Attorneys wanted to go ahead and question regarding the status of the non profit and _______________ said it really didn't look good; and it came back to bite us a little bit and the case got referred back to the board.
Ron Fuller: We will listen to it.
ABC Attorney Luken: Let him go and let him make a record. (Can't understand the rest of the sentence)
Ron Fuller: Make a record; and if you are not satisfied with that, read that into the record that you don't think they should be doing this; and then you can have something to appeal.
Attorney Schmidt: Ms Sai. Have you'll created new bylaws to go along with the restaurant or are there any other amendments to the by laws other than what I have here?
Attorney Hunter: I changed the bylaws as well as the DBA.
Attorney Schmidt: Do you have a copy of the bylaws here?
Attorney Hunter: I am looking. I don't know whether I have them or not.
ABC Attorney Luken: It will be in the file.
(They hunt for the by laws for a while about five minutes)
Ron Fuller: We seem to have a copy of the bylaws. What this is that is here in file is a copy of the original bylaws which is referencing and you said there had been amendments made and redone. I don't see the amendments here. Maybe I will give it to the Attorney here and let him find it. Looks some more. (Takes about 10 minutes trying to find them)
Ron Fuller: We don't have Amendment bylaws that turn this into a restaurant as we should have. (Look some more) The situation is that they have referred to the amendments of their bylaws (Stage One Bylaws) that have been made that basically turn this into a restaurant. We do not seem to have those unless we are all missing them (everybody that has just looked at) There are original bylaws. (Talk some more about the missing amendments and look some more) Okay, do you have any comments, Counselor.
Attorney Schmidt: Yes, did you take up any other business revoking the original article of incorporation and/or did you take up any business in amending the bylaws of Stage One Repertory Theatre?.
Attorney Hunter: That is what this does. This changes the bylaws.
Attorney Schmit: Again, where is it directed in this meeting (minutes of the meeting) that Stage One Repertory Theatre's bylaws were going to be amended, altered, or changed.
Attorney Hunter: They had monthly meetings and in this meeting on April 15 they changed, decided to do a fictitious name.
Ron Fuller: Let me make a note. . There is no requirement that they do that. They haven't gotten the permit yet. Okay. So what they appear to be doing here, the way we usually look at these and accept this. So amended bylaws start the proceedings. That is the way we have looked at a number of these in the past.
ABC Attorney Luken: I am sure we have.
Ron Fuller: They haven't gotten the permit yet. That is the argument the defendant makes. There is no reason for them to sit down and talk about food, etc. They are starting the procedure with this amendment, and that is what shoves it up here in front of us.
Attorney Schmidt: I just want to put in the record that there has not been any amendments to the bylaws nor has there been an amendment to the actual articles of incorporation.
Ron Fuller: If in any event that they are granted this permit then it goes forward; they don't have the meetings until this is settled.
Ron Ruller; Okay what else?
Attorney Schmidt: Ms Sai, When did you begin your operation, March 13?
Sai: Could not understand her.
.Discuss of whether she had sold liquor before . Skipped this part.
Attorney Schmidt: Mrs. Sai, Were you an active member of Stage One Repertory Theatre before you started operating this Sai Restaurant?
Sai: Can't understand what she said. Then her Attorney answers.
Attorney Hunter: She got it from her landlord, and then I transferred it over; and she became a member when we did the DBA for Sai Thai Cuisine.
Attorney Schmidt: Okay
Attorney Schmidt: How many members do you have at this time?
Sai: Could not understand.
Attorney Schmidt: Where did your members come from?
Sai
Attorney Schmidt: Friends, family. Who else are members?
Sai Patrons, customers
Attorney Schmidt: Where did you gather the members at?
When did you gather them?
Sai: When I opened the restaurant.
Attorney Schmidt: When you opened the restaurant. Okay. How many members do you'll have at this time?
Sai: 110
Attorney Schmidt: Did you take the information from the members, the names, addresses and phone numbers?
Sai. I did.
Attorney Schmidt: You did. You personally took that information. Are the names written down, or where did you put that information.
Sai. I wrote them down.
Attorney Schmidt: You hand wrote it, and then you typed it.
Attorney Hunter: No, she gave it to me, and then I typed it.
Attorney Schmidt: You gave it to him?
Attorney Schmidt: Ms. Sai, can you explain to me? Ms. Sai, does this look like a copy of your list?
Sai: Yes
Attorney Schmidt: Okay. You didn't prepare this; your Attorney did.
Sai: My Attorney did.
Attorney Schmidt: Did you acquire any of the names from your Attorney?
(long pause on Sai's party and then Attorney answers)
Attorney Hunter She gave me a and Attorney Schmidt interrupted.
Attorney Schmidt: Said to Sai. Will you please answer that. Did you acquire any of the names from your Attorney. Did you get some of the names from your Attorney?
Sai: Couldn't understand what she said.
Attorney Schmidt: How many of the names did you get from the Attorney?
Sai: I don't know.
Ron Fuller chimed in to help Sai out. And he recommended the rest of them?
Attorney Hunter: I say Sir, would you like to be a member of Sai Thai Cuisine? If they say yes, then I have them give me their information, and I put it down. We supplement that with hers. She gave me, I think in this case, about 65 or 70 people; and then I called to make up the 100. They say yeah, I love Thai food or I have eaten at Thai's restaurant, and I would love to be a member.
Ron Fuller: We have seen that done both ways.
Attorney Schmidt: Are you aware that some of the names are the same as some of the ones that are on Brickhouse's list, and some of them are the same as the ones on Godsey's membership list?
Attorney Scott Hunter: Some of them are just friends of mine, and naturally you are going to run .
Ron Fuller: chimes in to help him. Well you are going to run into if you are in a small town. Certainly we have seen that many times as well, where people are charter members of a number of these. So that is not out of the ordinary or odd that people would be a member of Josie's 501 and another club. So we see that all the time.
Attorney Schmidt. I move to admit the membership list from Brickhouse; the membership list from Godsey's and the membership list for Sai Thai Cuisine. It has notations on it that it has the same problems and mistakes on the names.
Ron Fuller: (Impatiently) Put it in the record and give it to Mr. ABC Attorney Luken there.
Ron Fuller: We are constantly on this road, but the court seems to uphold us every time we do it. So we will talk about it and allow the counselor to put as much as he needs to in the record.
ABC Attorney Luken: (I think) How many membership lists?
Attorney Schmidt: There are actually three here.
Attorney Schmidt I think: (If I can, it is probably already part of the file I guess)
Ron Fuller: Do you have other questions?
Attorney Schmidt: I will continue, thank you Chairman. Ms. Sai, are you aware of section 5.1411 membership information?
Sai: (couldn't understand what she said. )
Attorney Schmidt: You said earlier that the place you are leasing, you are leasing correct?
Sai: Yes
Attorney Schmidt: Your place you are leasing is approximately 2000 square feet and you can accommodate 60 heads. Is that right. You have got 110 members. Is that correct?
Sai: Yes
Attorney Schmidt: Family and friends?. Do you think you can easily accommodate all your guests and all your friends in such a small facility?
Sai: Could not understand what she said.
(Ron Fuller laughs out loud and says disgustedly "Let's dance around on the head of the pin."
Attorney Schmidt: About your charter members. You say they all have consented to be members of your Sai Thai Restaurant. Is that correct?
Sai: Yes
Attorney Schmidt: Have they paid any dues or any obligations?
Sai. Couldn't understand.
Attorney Schmidt: Have you'll had any regular meetings?
Sai: Yes
Attorney Schmidt: You have had members at the regular meetings?
Sai: Yes???
Attorney Schmidt: Okay, you admit that you have regular meetings. When did you start your meetings?
Attorney Hunter interrupted: The Board has had meetings not all these 110 members. The Board has had meetings.
Attorney Schmidt: You have had meetings just with the Board. Okay
Attorney Schmit: Have there been any - have you or any of the directors or any of the members done anything under the bylaws of Stage One Repertory Theatre? Have you'll (interrupted by other Attorney? before Sai could answer. )
Attorney Hunter: It is in the records that it is amended.
Ron Fuller chimes into help opposing Attorney. "It says what they did. They amended it so they could move forward with this."
Attorney. Schmidt: I have not seen an actual amendment to the by laws other than just a brief minute that explained it that they wanted to apply for a permit.
Ron Fuller angrily: Well it is not their requirement to send you one!. It is your requirement if you want to dig anything up, call up here and ask us. Okay.
It is not our job to make your case for you; it is our job to listen to what kind of restaurant this is going to be and vote for the man with the alcohol permit. And if I seem a little disgusted, it is because I am. Our attorneys have gone ahead and looked at all of this and approved it. You haven't been here before. I have been down this road ten years, okay . Almost everybody on the board has been here 20 years. We see a lot of that. And I realize that you are new on the scene here for Bob. And I realize that you want to make your record and what have you. And Bob gets in here and tapes everybody so he can take it back and show everyone how disgusted we all look. Well, we probably do sometime because we hear this constantly. And 99.9% of the time it has nothing to do with the permit. And the permits get either approved or disapproved based on whether we think we have a good applicant. So make all the points, but there will be some point I am going to direct you as being repetitive on this stuff and move forward. I am not going to do it yet, so go ahead and let's get through. We have another hearing at 3:00, and I don't want Bob to have to get back to Jonesboro at 10:00 tonight. [Fuller is personally ridiculing Bob Hester who has been there opposing them many times throughout this tirade. .]
(Another board member speaks up and says we have another one at 2:00. Fuller says No that one has been canceled.)
Attorney Schmidt: Earlier you were talking about two charities that you are looking at utilizing and sponsoring. Will you please be a little bit more specific; I am a little unclear on what exactly it is that you are going to be doing on your charitable contributions.
Sai: Well the first one is a foundation ______________________ my daughter.__________________________________________________ (Couldn't understand her.
Attorney Schmidt: Can you verify that that charity actually qualifies for the charitable contributions?
ABC Board Attorney I think: What do you mean by that qualifies for charitable contributions?
Ron Fuller (interrupts and says. "We don't have any legal requirements as long as we determine that she is giving to a decent charity. You can come in here with all sorts of stuff. They start programs for schools. They do all kinds of things. So you know it is not in our Rules and Regulations to go out and audit each one of the charities. As for as we are concerned, what she says she has said. The Board accepts that. The word charitable is not new anyway.
ABC Board Attorney I think: The word that is used is benevolent.
Ron Fuller ( A lot of people give to churches) with a smirk.
Attorney Schmidt: The permit you are requesting, what type of permit are you asking for here? Wine only, beer only?
Ron Fuller: Answers for her. "Private Club She has asked for a full permit." You understand what that is.
Attorney Schmidt: Are you planning on maintaining a membership book?
Sai: Yes
Attorney Schmid: Have you started one already?
Sai. Couldn't understand.
Attorney Schmidt: Are you going to have membership cards that you are going to issue?
Sai: Couldn't understand.
Attorney Schmidt: Are you going to maintain anything electronically or just by hand?
Sai: Think she said just by hand. ???
Attorney Schmidt: The liquor the sales and distribution of alcohol? How are you going to do that?
Sai: Could not understand what she said but her Attorney interrupted and finished it for her.
Attorney Hunter: answers for her _ ______________She is going to do it like that?
Attorney Schmidt: Is it going to be a
Ron Fuller: I think we have a counselor here (referring to Attorney Schmidt) who has never been involved with this before so he obviously needs to ask a lot of questions about things that he does not understand. We have a lot of people as you"ll know down here that do this constantly. This young man obviously hasn't done this before so he is researching this and we are having to go along so he is within his rights to ask questions.
Etc. etc.
Appeal was denied as one could guess from the transcript.
Note: Ron Fuller is not now serving as Chair of the Board, but has been Chairman for the past several years and on the Board for ten years. He was reappointed to the Board by Governor Beebe so is still on the Board but not Chair now. I think they rotate the position of Chair from time to time. Most of the Board members have been there for twenty years Ron Fuller says during this hearing.
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