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The ABCs of ABC's Case Against Two Arcata Bars 

In 125 days, we may be looking at a very different Arcata Plaza. A 10-month investigation into alleged liquor license violations at two bars, Sidelines and Toby and Jack's, came to a head last Friday. After a rather convoluted four-day hearing, attorneys Patrik Griego (representing the licensees) and Colleen Villarreal (representing the California Department of Alcohol Beverage Control) offered closing arguments in the case, which now sits with Administrative Judge Alberto Roldan, who will recommend whether the state should pull the two bars' licenses.

Back in April, ABC issued a press release documenting the findings of a months-long sting operation at the two Arcata establishments, wherein an undercover ABC agent was, allegedly quite easily, able to procure illicit drugs on a number of occasions, often — Villarreal contended — with "house knowledge," that is, with an employee or licensee aware of or even aiding in the illegal activity. The punishment for these alleged infractions is the potential revocation of the licenses.

Present throughout the administrative hearing were Salvatore "Sal" Costanzo and his son Michael, respectively the president and vice president of Costanzo's corporation that owns the two bars, Costanzo's Genco Olive Oil Co., an arguably unfortunate reference to the Corleone crime family's front company in the Godfather film franchise.

A few things should be noted about the ABC process. First, this is an administrative hearing and not a criminal one. Actually, it was two separate administrative hearings held back-to-back, one for Sidelines, the other for Toby and Jack's. These types of violations are charged against the licenses themselves, and not the people who own them. So even though both licenses are held by the Genco Olive Oil Co. and there is a good deal of overlap in the investigations, the two cases are separate. The Constanzos could retain both licenses, lose one or lose both.

Second, there are separate criminal charges pending for three employees (Mykie Bastidas, Joshua Cuppet and Nicole Costanzo) and patrons Joshua Michael Hellyer, Elijah Calvin Browning, Augustine Cardis-Menos, Jimmy Davis Ramsey II, Haven McCoy, Gabriel Patrick Ramonez, Sarah Elizabeth Arnold, Jasmine C. Oakeshott and Scott Clinton Gamar (Gamar remained at large as the Journal went to press).

Third, although there is no evidence that neither Sal nor Michael Costanzo ever actively allowed or facilitated any drug sales at the bars, under ABC policy, three or more purchases of illegal drugs at a licensee's establishment with house knowledge renders the licensee culpable. This is the case in both investigations. (Villarreal also presented some evidence that Sal Costanzo's daughter and former Genco Secretary Nicole Costanzo may have known of and aided in the purchases.)

Fourth, Roldan has 30 days from the end of the hearing to issue his recommendation, which will then be sent to ABC Director Jacob Appelsmith, who then has 100 days to either adopt or appeal that recommendation. The director's ruling can also be appealed by the Costanzos, with the business(es) allowed to remain open throughout this process.

The case is a strange one. There was testimony about men with nicknames like "Scoot" and "Corona" bragging to strangers about selling drugs, accusations of employees coating toilet seats in Vaseline to stymie people from snorting cocaine off them and a young undercover ABC agent who testified about brazenly talking in the bars about nothing but wanting to buy and do drugs.

Samantha Scott, the undercover ABC agent at the center of the investigation, testified that she faced no obstacles in her procuring of drugs at either establishment. She testified that she entered the two bars and almost immediately began attempting to score drugs, primarily cocaine, from employees. Never once, Scott alleged, did the employees rebuke her advances or ask her to leave (as both Sal and Michael Costanzo said was company policy). Instead, she testified, they either deflected, saying "my guy's not in town," or attempted to aid her in her pursuits.

Scott further stated that on one occasion, Nicole Costanzo went so far as to introduce Scott to — and vouch for — a drug dealer while in Toby and Jack's.

"I asked Costanzo, 'Is your guy around?' and she nodded affirmatively and introduced me to Elijah Calvin Browning," Scott testified. "I asked her, 'Is it good or is it cut with shit?' and she replied, 'Nah, it's good.'"

Griego contended that there was insufficient or no house knowledge in some of these dealings.

"Agent Scott herself testified that her back was turned to the bar and (bartender) Ms. Bastidas while the transaction took place, and has no knowledge whether Ms. Bastidas observed it taking place," Griego said in his closing argument of the Sidelines case.

Michael Costanzo testified that he personally trained employees to be aware — and wary — of drug use and sales at the establishments.

"I make sure everyone we hire reads and understands the [ABC's alcohol and drug training] handbook," he said, detailing measures taken to help curtail the problem. But, ultimately, he said "it's impossible to know what's in someone's pocket."

Both Sal and Michael Costanzo testified that all implicated employees have been fired, with Sal Costanzo further stating that his daughter has been removed from the corporation and that he is in the process of removing her from the licenses.

Griego stressed throughout the hearing that his defense was hamstrung in many ways and ABC's case relies heavily on presumptive evidence. A primary member of the investigative team, Agent Dave Miller (now with the Arcata Police Department), has been on medical leave and was thus unable to testify. Miller, according to Griego, was instrumental in the presumptive testing of the substances purchased by the undercover agent. Further, Griego stated, the substances purchased were sent to the Department of Justice for definitive testing only shortly before the hearing and, as such, the results were unavailable. And finally, as there are criminal charges pending, material witnesses in the case — including bartenders Bastidas and Cuppet and Nicole Costanzo — all excercised their Fifth Amendment rights against self-incrimination and didn't testify in the hearings.

Griego called former Arcata Police Chief Tom Chapman as a witness. Chapman testified that, after the allegations became public, the Costanzos contacted him, asking him to help them create an "operations manual" or "business plan" to curb this kind of activity.

The potential impact of these hearings on the plaza is significant. Back in January, the Arcata Public Safety Task Force led by City Manager Karen Diemer held a meeting regarding the Arcata Plaza and the huge number of drug and alcohol-related problems occurring there, most of them on the north end, where all the bars are located. The task force discussed a variety of options, including enhanced security, more surveillance cameras, better lighting and an increased police presence.

Forty percent of all police calls for service in Arcata come from the plaza, according to Diemer.

"Of that 40 percent, about half of them are alcohol and drug related," she said. "In the last four years, there were 1,300 calls for service to Sidelines and Toby and Jack's combined. ... For those four years, Sidelines was the No. 1 in 'calls for service.' Toby and Jack's was the No. 2 in 'calls for service' except one year, when it was No. 3."

Once news broke of the allegations against these two bars and all of those arrests, Diemer said the community responded with a resounding cry: Something more drastic should be done. Simply put, she said, people feel there should be fewer bars on the plaza.

Roldan and ABC may soon give those people their wish.

If the allegations are upheld, not only will the Costanzos not be able to sell their licenses (as they will have been revoked), but those licenses would be removed from the county pool entirely. Per the ABC, liquor licenses are doled out to counties by population and Humboldt County does not have the population to support the number of licenses currently active within county limits.

There's now a very real chance Bar Row will see its ranks cut in half come mid-January.

Thomas Oliver is a writer, ultimate Frisbee player, cat-owning hermit and 10-year resident of Humboldt County.

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Thomas Oliver

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Thomas Oliver lives in McKinleyville.

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