OUT OF JOINT

A LIQUOR LICENSE PROBE OF A WEBB AIDE'S TAXPAYER-FINANCED BAR SIZZLES, THEN FIZZLES.

Eight years ago, after he won a low-interest, $50,000 loan from the City of Denver to build a restaurant and bar in west Denver, Don Sandoval brushed aside criticism that the loan was improper. Sandoval was a state senator at the time, and Denver's auditor had complained that the city wasn't supposed to give taxpayer-backed loans to public officials. "I should be entitled to [the loan] just like anybody else," Sandoval said.

But Sandoval, now Mayor Wellington Webb's assistant on international trade, doesn't appear to have been treated "just like anybody else" in a more recent controversy involving his Bull Ring lounge, at 3570 Morrison Road.

Last summer, investigators for the city's Department of Excise and Licenses charged that Sandoval had violated state liquor laws by illegally turning control of the Bull Ring over to a Mexican chef named Miguel Pinales. According to both a Denver city attorney and a police detective, the alleged violation--illegal transference of a liquor license--was serious enough that Sandoval's license could have been revoked. But the city later declined to prosecute, saying it had a conflict of interest because of Sandoval's status as a political appointee.

The city bumped the case over to the Colorado Department of Revenue's Liquor Enforcement Division. But now, almost six months later, the state has dropped its investigation entirely--and recently gave Sandoval the green light to continue operating the Bull Ring under a new agreement with different managers.

Pinales, meanwhile, is struggling to get back on his feet. After clashing with the politically connected Sandoval last August, he lost both his job and the home he was renting from Sandoval just behind the lounge. Though he's found other work and a new place to stay for himself, his wife and their four young children, Pinales says he lost his $5,000 life's savings to Sandoval, and he wants his money back.

"I was thinking he was honest and believed his word," says Pinales, 51. "He hurt my whole family."

Sandoval was a state senator for fifteen years before joining the Webb administration as the mayor's "Assistant for International Trade and Economic Development," a post that pays him more than $47,000 a year. One of Sandoval's jobs is to boost business ties between the city and Mexico, though he does not speak Spanish.

El Reportero, a Spanish-language newspaper in Denver, first reported Sandoval's dispute with Pinales last year. Reporter Eduardo Plata says he got interested in the case when Sandoval moved to evict Pinales from the bar last summer. "I think he's taking advantage of Mexicans," Plata says.

Sandoval says that he feels sorry for Pinales but that Pinales brought his misfortune on himself. Pinales, Sandoval says, was evicted because he wasn't paying his bills while running the bar. Sandoval says that Pinales caused a lot of property damage at the building and that he is even considering suing Pinales to recover his losses. But "he doesn't have any money," Sandoval says. "We're wondering whether it's going to be worth it."

Sandoval, 60, opened the Bull Ring in 1986. According to an old news report, he planned to build a small shopping center and gas station at the Morrison Road site, which lies within an area targeted for economic-revitalization loans from the city. Sandoval got $50,000 at 3 percent interest from Denver's Community Development Agency and borrowed $160,000 more from a bank. He paid off the community-development loan in 1993, records show, but the bar is the only business on the property, and there are no gas pumps.

Instead of running the bar himself, Sandoval has hired a series of managers to operate it, says Carol Dawson, owner of a carpet store across the street from the Bull Ring and president of a Morrison Road business group. Dawson and other neighbors say the lounge has seen high turnover among managers over the years. "There's obviously some sort of problem," Dawson says.

Pinales, a native of Mexico City who's worked as a chef at the Brown Palace, the downtown Hilton and other restaurants, says Sandoval approached him to run the Bull Ring in the summer of 1993. Pinales, who hoped to eventually buy the business, agreed to operate the lounge for a percentage of net profits. A "management agreement" signed by Sandoval required a $5,000 deposit from Pinales, as well as weekly payments of almost $1,400. Pinales got to live rent-free in a house Sandoval owned behind the bar--and keep any bar profits as his salary. In addition, the agreement gave Pinales the right to purchase the Bull Ring from Sandoval for $60,000.

"That was my hope--to buy the whole business," Pinales says. Pinales, who speaks only halting English, says he didn't understand all the fine print in the contract. But he says his conversations with Sandoval led him to believe that it gave him the power to run the bar in his own way. "He put in my head this was a lease," Pinales says. "When we closed this deal, he said, `Now you can do anything you want; it's your place.'"

Sandoval's attorney, Remigio Pete Reyes, denies that the agreement amounted to a lease, saying that Pinales was actually only an employee of Sandoval's.

The distinction is important, because liquor licenses are not transferable, says Detective Michael Patrick of the Denver Police Department. Patrick, assigned to Excise and Licenses from the city vice bureau, points out that applicants for licenses are subject to strict scrutiny by regulators. "To allow transfers to go through without controls would open up the system to the highest bidder without regard to their character," Patrick says.

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