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An illegal transfer, Patrick says, is "certainly a violation that could result in a [license] revocation."
Sandoval points out that Pinales never signed the management agreement. Pinales says he doesn't remember why he didn't sign the contract but that he abided by its conditions and considered it binding on both parties.
Business at the Bull Ring was "fair" during his first few months, Pinales says. At the beginning of last year, however, the lounge suffered a severe slowdown. So Pinales hired two business advisors who helped him bring in customers. Among other ideas, the advisors suggested staging a "Friday night disco" every week. Business at the Bull Ring increased sharply. "They did a good job," Pinales says.
Sandoval, however, says Pinales's changes brought an undesirable crowd to the lounge. "You should have seen the parking lot--it was a haven for drug dealers," Sandoval says. The new clientele also damaged Bull Ring equipment and furniture, he says.
Officer Mark Roggeman of the Denver Police Department paints a different picture of the bar under Pinales's tenure. Roggeman, a community-resource officer who handles neighborhood complaints, remembers that "business was booming" at the Bull Ring last summer but that it wasn't a source of trouble for police. "We weren't dealing with that as a nuisance at all," Roggeman says. "We never got a complaint from a citizen or anybody."
Sandoval says that, in addition to allowing property damage and criminal activity, Pinales simply wasn't paying his debts at the bar. Last August he kicked Pinales out. "The poor soul, I feel sorry for him," Sandoval says. "But I had to go ahead and terminate him."
Pinales, who claims he made all his payments to Sandoval, complained to Denver police, alleging that Sandoval had illegally broken their agreement. The department turned the matter over to Excise and Licenses, which regulates bars in the city.
Detective Patrick says he reviewed Sandoval's written management agreement and concluded it was illegal. "There's no question he [Sandoval] had unlawfully relinquished control of the business," Patrick says. Patrick had Assistant City Attorney April Snook file a complaint against Sandoval alleging nine violations of state and city liquor laws.
Shortly afterward, however, Snook says she determined that Excise and Licenses shouldn't be handling the case. Like Sandoval, department head Balvino Chaves is a Webb appointee. Snook says Chaves, who ultimately would have ruled on what sanctions to impose on Sandoval, had a conflict of interest that would create "an appearance of impropriety." She recommended the city transfer the case to the state Liquor Enforcement Division.
Reyes, Sandoval's attorney, recalls that Snook told him the city considered the whole Sandoval-Pinales flap to be a minor matter that would not have resulted in any kind of penalty for Sandoval. "There wasn't a violation" of the code, Reyes says. "It wouldn't have even gone to a hearing."
Snook says that's not true. Like Detective Patrick, she describes Pinales's allegations as "extremely serious" but says the city recused itself from the matter before she could reach any conclusions. "There was a strong chance it could have resulted in a [license] revocation," Snook says.
The state, however, ended up taking a much softer stance on the matter. Licensing administrator Matt Cook says the division looked at Sandoval's management agreement with Pinales and didn't find any major cause for concern. The division helped Sandoval craft a new agreement with the current managers of the lounge and then ended the investigation in December, Cook says.
The state's probe was less than exhaustive, however. Pinales says no one from the Liquor Enforcement Division bothered to contact him for his side of the story. "They never called me at all," Pinales says.