Cocaine Busts Could Put Cork In 10 Spokane Bars State Liquor Regulators Reviewing Files Of Operation Doughboy To Determine Whether To Punish Bars Where Owners, Managers Knew Drug Deals Were Being Made

State liquor investigators are reviewing FBI files to determine whether to sanction 10 Spokane-area bars and lounges identified in a major cocaine case.

Operation Doughboy culminated in mid-August with two dozen arrests. Since then, most of the suspects have pleaded guilty and agreed to answer investigators’ questions in exchange for lighter prison sentences.

Cocaine sales were either arranged or carried out at the businesses, according to court records and extensive testimony in U.S. District Court.

The name of the 10th tavern came to light Friday when one of its former bartenders admitted that he made five cocaine purchases last year at the business.

Terence Brousseau, 37, who worked at The Comet Tavern, N5028 Market, admitted that he made five cocaine purchases at the Hillyard bar from May 13 to May 21.

Brousseau pleaded guilty to five counts of possession with intent to distribute cocaine. He faces six months to a year in prison when he’s sentenced April 10.

His cocaine purchases, usually for about $200 apiece, were for one-eighth ounce quantities - so-called “8-balls.” Those “8-balls” can be broken down into 10 to 12 lines of cocaine that sell for about $50 each.

Under terms of his plea agreement, Brousseau, who remains free until sentencing, must tell authorities what he did with his cocaine purchases.

Other defendants who have pleaded guilty have faced similar questions, and Liquor Control Board agents have sat in on some of those debriefings.

Businesses identified in the case are: The Comet Tavern; Dewey’s East, E12909 Sprague; Dragon Inn, W1406 Third; Flaherty’s, W514 Sprague; Lame Duck, E8103 Trent; Mandarin House, E7102 Sprague; The Scrapbook, E12828 Sprague; Silver Lanes, E3023 28th; Shenanigan’s, N332 Spokane Falls Court, and Weise’s Place, N2436 Astor.

Robert Stamper, chief of the state Liquor Control Board office in Spokane, confirmed Friday that the agency was conducting an investigation.

To suspend or revoke a state liquor license, enforcement officers must prove that the owners or managers of the establishment were aware of the drug dealing.

Many of the owners, governed by state liquor license regulations, probably weren’t aware that cocaine deals had occurred in their business, Stamper said.

Many of the transactions were customer-to-customer deals. Sometimes, the drug deliveries occurred in bathrooms or in parking lots, authorities say.

Stamper said agents have identified four bars or lounges where management may have been aware of drug trafficking.

One of those is Flaherty’s, and the state Liquor Control Board is attempting to permanently revoke its license. Stamper declined to identify the other three businesses.

The Lame Duck, which was operated by Doughboy kingpin James Larsen, since has reverted to its previous owners, who weren’t involved in the drug dealing.

Flaherty’s, a popular downtown restaurant-lounge, was a hangout for several individuals identified in the Doughboy investigation, according to testimony and court records.

The Liquor Control Board got an emergency order suspending Flaherty’s license in mid-August after co-owner Leslie “Rick” Olsness was among two dozen suspects arrested.

But Olsness went to court and got a judge to reinstate the liquor license, and Flaherty’s remains open. Olsness, 49, pleaded guilty to misdemeanor possession of cocaine in November, and faces sentencing on Feb. 10.

Stamper said Friday the Liquor Control Board is still seeking to revoke Flaherty’s license, but a hearing date hasn’t been set.