Alaska News

A PEOPLE IN PERIL: A river of booze

Originally published Jan. 14, 1988. Part of a series.

BETHEL -- A sole Alascom telegram office has survived the communications revolution that brought telephones to nearly every village in the Bush.

The office is in Bethel, and it owes its staying power to a steady accumulation of crumpled currency shoved through a slot beneath tinted, bulletproof glass.

The cash, $100 and $200 at a time, comes from bootleggers and whiskey drinkers wiring money orders to Anchorage liquor stores.

The office is a humming pump, nourishing the headwaters of Alaska’s fearsome river of booze.

Though Alascom shut its other Bush telegram counters over the past decade, the Bethel office is different. The continuous flow of alcohol business rings up $800,000 a year in money orders and represents 95 percent of the money wires out of Bethel. Though the liquor stores are 225 miles away, the network linking them with Alascom and the airlines guarantees sameday delivery and mocks Bethel's voterapproved ban on intown liquor sales.

Alascom is one of dozens of legitimate enterprises whose decisions and policies, sometimes passively, sometimes not, have kept the floodgates wide open for bootleggers and consumers of lowgrade whiskey in villages, both wet and dry.

Alascom, like most of the others, says it shouldn't be asked to play policeman and go beyond the restrictions imposed by society itself. "It's a judgment call we can't make, " said spokesman Tom Jensen.

Yet the aftermath of those business choices is widespread death, violence, abuse and neglect for adults whose choice it is to binge, and for children and other victims who find themselves trapped inside another's nightmare.

A passive state liquor agency with a history of toothless regulations, an ineffective local option law, flagrant bootlegging and ambiguous community standards have kept the flood of liquor unchecked. Because liquor starts out as a legal commodity, unlike marijuana or cocaine, gray and blackmarketeers openly take advantage of the network that ties together even the remotest parts of Alaska for legal commerce.

In recognition of the role of alcohol in human misery, the legislature has offered communities a menu of options for its control, ranging from communityowned liquor stores to a complete ban on possession. Some 82 places, from the Kuskokwim Delta center of Bethel, population 4,462, to the Athabascan hamlet of Birch Creek, population 40, have chosen to restrict the sale or possession of booze.

But residents of those places and the authorities who enforce the laws readily admit that even in the most restrictive villages, where arriving travelers are frisked for flasks, there are still ways for the booze to get in.

Some of it is due to the ingenuity of bootleggers. By uncorking a jug and filling it to the brim before hiding it in a suitcase, they can avoid the telltale gurgle a conscientious baggage handler might detect. Plastic bottles have eliminated the risk of breakage and the giveaway odor.

It is 1:15 p.m. on a Friday afternoon in October. A steady flow of customers has journeyed to the silversided building, beside the huge satellite dish, where Alascom conducts its telegram business. It is just up a dirt street from the Kuskokwim River and the office of Bush Air Service, whose owner was recently charged with transporting liquor to a dry village.

In walks a man with bushyblond hair. "You must be glad it's Friday, " says the Alascom agent, making small talk. "What difference does it make to me?" replies the customer. "One day of the week is the same as the next." He wires $172 to Party Time Liquor in Anchorage.

The next customer, a Native man with the smell of liquor on his breath, sends $219.74 to International Liquor, also in Anchorage.

"Hello, Al, " a clerk says to another man. "$189.50, Party Time, " he replies. He pushes a wad of bills through the window, she gives him back some change. Then she walks to the teletype machine. In seconds, the message beams from the dish outside to the satellite Aurora, and back down to the Alascom office in Anchorage. In minutes, a check is ready for Party Time.

ORDERS FROM ANIAK

Like Bethel and a halfdozen other communities in Alaska, the Kuskokwim River village of Aniak has banned the sale of booze, but not its possession or importation.

On a Friday afternoon last October, Postmaster Leonard Morgan was on the phone to a customer. The weather outside was rotten snow, wind and low clouds and Morgan told his customer that the Northern Air Cargo plane would be late, so there was still time to get a postal money order shipped by Express Mail to a liquor store in Anchorage.

The oneday Express Mail service provided by the Aniak post office attracts booze customers from as far away as Kalskag, 25 miles downriver. In the summer, they make the twohour journey by boat, and in winter, in a quarter of the time, by snowmachine or truck on the frozen river. If they make the mail deadline, they'll be back the next day to pick up their shipments at 1:30 p.m. when the Northern Air Cargo DC6 roars into town.

Where do those orders go?

Primarily to a halfdozen liquor stores in Anchorage and Fairbanks that specialize in the Bush trade, some of which have teamed up with airlines to offer drinkers a package deal.

20-GALLON LIMIT

Since territorial days, Alaska has allowed people to place orders for alcoholic beverages through the mail for shipment by common carrier. In 1980, the legislature revamped the liquor code and eliminated restrictions on the amount that can be shipped.

Alcoholic Beverage Control Board regulations that went into effect in November require the liquor store to notify the board when an order is 20 gallons or more the equivalent of about 81|2 cases of Windsor Canadian in plastic bottles. Though the rule was supposed to detect bootleggers, loopholes remain, conceded Bill Roche, the commission's chief investigator. Bootleggers selling a case or two a week don't need to place single orders in such a large quantity, he said, and even if they did, they could avoid detection by splitting their orders among several stores, or having confederates place orders.

If 20 gallons proves too loose a restriction, Roche said, the board may change it.

The new rules will mainly affect the few stores that specialize in mailorder sales. In Anchorage, according to ABC board staff, they are Party Time Liquors, Value Liquor, International Liquor, Our Liquor and Brown Jug Warehouse.

According to records filed with the Alaska Department of Revenue, Party Time No. 2, on Spenard Road, where the Bush sales are made, sold an average of 1,400 gallons of hard liquor a month over the past year, the equivalent of 5,000 "jugs." That's more than twice its nearest mailorder competitor, Value Liquor No. 3 on Jewel Lake Road.

The records don't show the proportion of liquor sold over the counter as opposed to mail order, and Party Time owners Michael and Paula Gallagher won't discuss their business. But their competitors estimate that as much as 75 to 80 percent of their sales from the Spenard store goes to the Bush.

In an interview in Bethel, a selfdescribed bootlegger said he prefers Party Time because it understands his needs. Clerks ship the bottles in innocuous cartons, like those for potato chips, he said, so "no one can see what you are getting in the box."

And evidence now in court indicates that Party Time may have been increasing its sales by actively courting the bootleg trade. In addition to opening the operations of Party Time to public view, the unusual lawsuit, brought in Superior Court in Bethel, has shown the state liquor board to be ineffective in policing mailorder sales.

The suit, filed in 1986 and not yet tried, was brought by the parents of Moses Strauss Jr., a 20yearold minor when he was struck by a Bethel city bus on Jan. 14, 1986, and suffered severe head injuries. The suit charges that Strauss was drunk at the time and that he bought his liquor from Malachy Polty, a customer of Party Time.

The Gallaghers declined to be interviewed. Through their attorney, they denied the Strausses' allegations. "We are confident we will be found blameless when all of the facts are presented to a judge and jury. However, we and our attorneys believe it is highly inappropriate to try cases in the press, " they said in a prepared statement.

Depositions and documents obtained by the Strausses' attorney, Kneeland Taylor, include the record of a previously undisclosed 1985 investigation by the beverage commission into allegations that Party Time flouted mailorder rules, shipped to customers from dry villages, and was likely dealing with bootleggers.

In visits to Party Time's store at 4006 Spenard Road over a sixmonth period, agency investigator Virginia Holland found that the store was helping its largeorder customers over regulatory hurdles designed to slow the flow of booze to the Bush, keep liquor from the hands of minors and discourage impulse consumption and binge drinking.

Among the requirements of the law then and now, according to Roche, the beverage board's enforcement officer, was that mailorder customers send the liquor store a signed, written request for each purchase.

Party Time took a creative approach to the rule. According to the depositions, it told customers to mail a batch of signed order forms filled in with huge quantities of anything they could possibly want. Then, when they decided to actually make a purchase, they called Party Time, directed which part of the order to fill, and wired the cash by Alascom. The Party Time clerk scratched off the portion of the order that was filled, leaving the remainder for the next call.

About 2:30 each afternoon, the Party Time truck would leave the liquor store for the MarkAir SpeedMark package express window at the airport for sameday delivery to Bethel.

On a single day, April 12, 1985, most of the orders that left Party Time for the Bush came from forms with matching handwriting but different names, according to the investigation report. In a later visit to the store, Holland uncovered orders from residents of Napakiak and Nunapitchuk, two dry villages in the YukonKuskokwim Delta.

On Jan. 6, 1986, ABC board Executive Director Patrick Sharrock signed the report of his investigators recommending suspension or revocation of Party Time's license for a pattern of ongoing violations: accepting telephone orders, shipping liquor to customers in dry villages and failing to correct deficiencies pointed out during the course of the investigation.

Three days later, Party Time attorney Dan Coffey responded that the fault was not with the store, but with vague regulations. He accused investigator Holland of writing "rules and regulations herself."

In a letter to the beverage board on March 10, 1986, Assistant Attorney General Kay Gouwens recommended against prosecution.

"I understand and sympathize with your concerns about package stores such as this that have a large volume of Bush sales and seem undaunted by the fact that some of what they sell almost certainly finds its way to villages that have banned importation, to bootleggers, and to individuals with drinking problems, " she wrote. "However, our existing statutes and regulations are poorly equipped to deal with the problem."

The ABC case was shelved. It took a year and a half to implement new regulations that clarify the absolute ban on telephone orders.

PLENTY OF "LOOPHOLES'

Holland quit her job in March 1986 and moved to Seattle. In a recent interview, she said her tenure at the liquor board was an exercise in futility. The kinds of violations she observed at Party Time could be found in other liquor stores that ship to the Bush, she said.

"My foremost frustration was the way the regulations were written. They were very vague and nebulous and although anyone can read them and know the intent of the law, they leave all sorts of loopholes for someone who doesn't have a conscience to violate them, " she said.

She said she didn't find much official support from either the attorney general's office or the ABC board. The people in positions of authority didn't seem to want to make the effort to fight bootlegging by controlling sales.

"If there is a general consensus, it is that (bootlegging) is one of those victimless crimes. People up there want liquor. People in Anchorage are willing to send it. And nobody gets hurt."

Roche and Sharrock said they sympathized with Holland's frustrations, but they said she quit before the last chapter of her investigation was written. Roche said the liquor board saw the need for tighter rules, and responded with the new regulations.

AMAZING NUMBERS

In their suit against Party Time, the Strausses built their case upon the ABC investigation. By using a computer to examine subpoenaed records, they've taken it much further.

During 1986, the Strausses reported, Party Time shipped $475,445.19 in booze to Bethel.

They also documented that the 11 biggest Party Time customers bought 12,175 bottles of whiskey and 2,430 cases of beer during the year, for a total of $125,775.89.

That averages out to three bottles of whiskey and 72 cans of beer a day for each buyer.

Assuming the proportions of beer to whiskey are roughly comparable among all buyers as they are with the top 11, Party Time's sales to Bethel would translate to a hard liquor per capita adult consumption rate of of 3.6 gallons more than one and half times the national rate.

And Party Time is only one of five Anchorage liquor stores selling directly to Bethel. Adding to the consumption would be whiskey carried in luggage or booze purchased over the counter and shipped by individuals themselves.

It all goes to a town where the sale of liquor is officially outlawed.

Between Jan. 6 and June 18, 1986, defendant Polty spent $6,471.46 at Party Time, and among his purchases were 480 bottles of whiskey, according to the court record.

To preserve the privacy of the other Party Time patrons, their names were not disclosed in the court filings. But a computer printout showed that one of them, identified as "Customer 1, " bought 283 bottles of whiskey between June 2 and July 12, 1986, a period that includes the busy Fourth of July holiday. The most orders went to "Customer 11, " who spent $23,239.47 during the calendar year on 2,423 bottles of whiskey, six bottles of other hard liquor and 21 cases of beer.

The July 14, 1987, affidavit of a former employee, Edith Turkington, accused the Gallagher's soninlaw, Richard Marietta, of forging signatures on Bush order forms.

From a backroom office crammed to the ceiling with booze, she and Marietta would take orders over the telephone or by mail. "Each day we would call Alascom and see who had sent money in, " she testified.

When a phone order arrived from a regular customer, she or Marietta searched the customer's file for an order form. The forms were often blank, with only the signature of the customer at the bottom, she said.

"On many occasions, we would not have a signed blank order form and Richard just forged the signature, " she said.

The Gallaghers kept a ledger for each customer, Turkington testified. "On some of the pages in the book, the word "bootlegger' was written. I asked Richard Marietta what that meant, and he just said it was a person who sold booze out in the Bush.

"We shipped large liquor orders to persons who were marked as "bootleggers' in the book. As far as I know, we treated bootleggers just the same as anyone else, although Mike Gallagher often would give discounts and free booze to persons ordering large amounts of liquor."

Attempts to locate Marietta were unsuccessful. An employee of Party Time said Marietta was in California, but didn't know where. Paula Gallagher said she couldn't provide his location or a way to reach him.

AIRLINES' ROLE

In Aniak one Friday afternoon in October, a Northern Air Cargo DC6 touches down on the runway in the center of town, a few minutes behind a MarkAir jet. It taxis to the terminal area. A forklift goes to work on the freight pallets. Within an hour, both planes are back in the sky.

The Northern Air Freight plane leaves four shipments of booze, three of them cases of whiskey and beer for men suspected of bootlegging by the local police. Shipping records show that one of the men has received three cases of whiskey over the past six days.

Outside, two men, each with a case of beer tucked under an arm, tread from the MarkAir terminal toward a river slough. They are met by a woman, who helps them load the beer into a pair of boats. After pausing for a drink, they take off up the slough and disappear around the bend, a tiny current in the big river of booze.

Half an hour later, Tommy Toms of Aniak is perched on a bluff above the same slough. He and a friend are holding the cases of beer and whiskey that arrived under his name at Northern Air, and they have cracked the beer case and are drinking.

He's no bootlegger, Toms says, but he also doesn't believe it is wrong for anyone to buy or sell liquor. "It's their money, they could do what they want. There should be no law in spending money the way you want."

A third friend emerges from the thicket below. He ambles up the hill, chats for a few minutes, then hoists the two cases to his shoulders and turns back the way he came.

The next day, Aniak police report a complaint from Kalskag that Toms was bootlegging there.

FLIGHTS FOR BOOZE

Airlines large and small are huge channels for Alaska's river of booze. Their role was recognized last year by an elders council of the Seward Peninsula and the northern Bering Sea islands. In a formal resolution, they asked air carriers to refuse liquor shipments to the Bering Straits villages.

A more discreet role is played by private planes.

James Michelangelo, chief of the National Transportation Safety Board's office in Anchorage, said he believes that booze is the cargo aboard some of the hundreds of planes that take off each day from Merrill Field, one of the nation's busiest airports. The only time anyone knows for sure, though, is when something goes wrong.

That happened Jan. 24, 1987, when a singleengine plane crashed on takeoff at Merrill. The pilot survived, but was uncooperative with authorities, Michelangelo said. He gave his address as General Delivery, Bethel.

When authorities went through the plane, they found it loaded with liquor.

"They had booze up the kazoo, " Michelangelo said.

Michelangelo said alcohol, in small amounts, is suspected as a hidden cargo on a Yute Air mail plane that crashed and exploded May 7, 1987, on a hillside near Chefornak, killing the pilot. The flight manifest listed no volatile liquids, yet the plane burned with a ferocity that could only have been fueled by an extremely flammable cargo, he said.

Most booze, at least to Bethel and the surrounding wet villages, moves on scheduled airlines and air taxis. For some, the business can be an important part of the profit picture.

Phil Hoversten, once an official for nowdefunct Wien Air Alaska, said the expedited booze packages that arrived on Fridays brought in enough money to cover the entire weekly payroll of the Bethel staff. "We'd get 100 to 150 packages at 50 bucks a crack, " he said.

Audi Air, a commuter airline based in Fairbanks that serves the Inupiat and Athabascan communities of the North Slope and Interior, has a pad of order forms from International Liquor of Fairbanks stuck on the wall of its Fort Yukon terminal.

MarkAir has had promotions with liquor stores. Brown Jug has distributed flyers saying it has teamed up with MarkAir to bring speedy and convenient service to Bethel. MarkAir will pick up checks and money orders at its counter in Bethel, whiz them to Anchorage for delivery to Brown Jug, and have the the booze waiting for the customer by the next day with no Alascom charges.

MarkAir's express package rates are the best to Bethel. Clerks at Party Time and Our Liquor in Anchorage recommend the price and convenience of the daily 3:45 p.m. MarkAir flight to Bethel. The cost for up to 70 pounds is $36.75 for a SpeedMark versus $47 for an Alaska Airlines Goldstreak, they said.

MarkAir's former Bethel station manager, Kent Harding, says the airlines should shoulder more responsibility for controlling booze.

"Anyone that lives in a community management or employees should like to see bootlegging controlled, " said Harding, now a sergeant with the Bethel police department.

But that attitude got him in trouble when he worked for MarkAir, he said.

"When a box (not marked as liquor) came in that would go slosh, that had obvious signs of liquor, we would bring it to the attention of police. They would get a search warrant. And it would be safe to say that what was reported turned out 100 percent of the time to being alcohol."

Harding said the concealment of the liquor indicated that it was bound for the bootleg market and justified a search warrant.

But his attitude made his bosses unhappy, he said. "You can either be an employee of MarkAir and keep the revenue, or go back to being a cop, " he quoted them as saying. So he quit.

MarkAir President Ralph Brumbaugh declined to respond to Harding's comments.

Officials of airlines in Alaska say they refuse to ship liquor to dry villages. But most say they are dutybound to carry all legal cargo and booze to Bethel and most western Alaska villages is legal.

MAKING A STAND

One airline is different. Bering Air decided to just say no.

The airline offers commuter service to 17 northwest villages out of Nome and serves as a contract carrier for continuing Alaska Airlines passengers and cargo.

Bering Air President Jim Rowe said the airline will carry no booze to any village, wet or dry.

"It was my choice, " said Rowe, who has flown in the area for 14 years.

"I'm responsible for the impact of this company on the people it serves. The fact is that we do provide a lot of services for the troopers, and we're on medevac duty. When there's an emergency call to go out to a village, if you're the pilot and it's 2 o'clock in the morning, and you're looking at somebody about to go into a body bag, and the troopers ask where they got the booze, I don't want them pointing their fingers at me.

"Anytime I get a call that someone's hurt in a village, it's somebody I know. There are villages where there are 13, 14yearold kids having alcohol problems, and I may have flown the mother to the hospital to have those kids. So it's personal."

Rowe said he has no delusion that his action is diminishing the flow of booze into the villages. With the exception of Little Diomede, at least one other carrier serves each of his destinations, and none flies by his rules.

Alaska Airlines was not happy with his decision because of concerns that it would run afoul of common carrier regulations. Rowe said he sympathizes with their concerns.

"Even though we're certified the same as MarkAir or Alaska, it's harder politically (for them) to make the stand we have. Alaska Airlines doesn't support our stand. They're a publicly held company. If they make a stand such as we have, it goes all the way back to Washington, D.C. When Bering Air does it, there's only one person it comes back to, Jim Rowe.

"One hundred percent of all the mail we had was positive, " he said, including letters from local councils and elders. "No one has even suggested we were out of line. Having alcohol in the villages is not a position that's easily defended. There are not many good points for alcohol abuse."

While other airline companies have not followed Rowe's example, some individual pilots have.

"NO MORE BOOZE FLIGHTS'

It is a cool, windy morning in October, 8 a.m., and there is no hint yet of dawn. Pilot Jim Twedo walks into the Ryan Air Service terminal at Unalakleet.

"No more booze flights, " he tells the ticket counter clerk, with a note of disgust in his voice. "I'm not doing any more."

Later, during the flight to Nome, he talks about the last straw: a flight chartered the previous day by two women to the nearest liquor store. It was in Galena, 130 miles away.

"People's permanent fund checks have just come in, and they're taking charters to get booze, " he says. "They don't have food for their kids at home. Their kids don't have good shoes and jackets for the winter. I don't want to be a part of it anymore. It makes me feel guilty.

"You just got to draw the line, " he says. "I'm just tired of seeing the kids of parents I've taken sitting outside crying because their parents are home drunk."

If recent history is any example, Twedo’s action would only divert the business somewhere else, like a small weir in the river of booze.

Richard Mauer

Richard Mauer was a longtime reporter and editor for the Anchorage Daily News and Alaska Dispatch News. He left the ADN in 2017.

Hal Bernton, The Seattle Times

Hal Bernton is a a reporter for The Seattle Times and a former reporter for the Anchorage Daily News.

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