Manassas Park Smears a Businessman

Friday, December 22nd, 2006

(Note: See previous posts on this case here, here, and here.)

I’ve held of on publishing the nitty gritty of the raid on the Rack n’ Roll pool hall for months now, for several reasons. But I think it’s probably time to dump all of this, in part, because another blogger is about to beat me to it.

There’s a blog that covers Prince William County, Virginia, Manassas, and Manassas Park called Black Velvet Bruce Li. He writes the following on the Rack n’ Roll case:

As far as I can determine, Dave Ruttenberg is being mercilessly harassed by the city when other establishments who have far worse records are getting their wrists slapped at best. I have been at a complete loss to figure out why this might be happening, and without an explanation for this this whole ordeal it has had the appearance of some bizarre conspiracy theory advanced by folks who desperately need psychotropic medication. In this day and age, why the heck would a city go out of it’s way to make life difficult for one of it’s local businessmen who at least keeps a rather unremarkable strip mall from otherwise having a lot of vacant space?

Then I remembered reading something long ago in the Washington Post about where the proposed location was for Colonial Downs to establish an off-track betting facility in Manassas Park that got defeated in two referenda, the last being in 2004. It was at the Manassas Park Shopping Center. And the location of Rack & Roll? Same place. Now is this just some sort of bizarre coincidence, or do the visions of dollar signs dancing about the heads of those who might stand to make millions in Manassas Park have something to do with the reason Dave Ruttenberg has been having such a hard time?

I can’t say for sure. But I have some pretty compelling circumstantial evidence that “bizarre coincidence,” it ain’t.

I’ve been looking into this case for the better part of a year, now. My file on the case is several inches thick with my notes, copies of memos and documents, interviews with customers and employees, CD-ROMs of David Ruttenberg’s security system, and affidavits he has collected from witnesses. I also also visited the bar last spring, and witnessed firsthand the Manassas Park police department’s harassment of Mr. Ruttenberg’s customers.

I’ll get into the harassment, entrapment, and defamation Mr. Ruttenberg has endured in a bit. For the moment, I’d like to focus on possible reasons for the harassment. Why has this been going on for several years? I think there are a few minor motivating factors. For one, I think there is, unfortunately, some antisemitism at play. There’s also a strange rivalry Mr. Ruttenberg had with a Manassas Park police officer over a girl. And I think part of this may be driven by city officials who for whatever reason simply began to harbor a grudge against Ruttenberg. Remember Milton Friedman’s old axiom: Hell hath no fury like a bureaucrat scorned.

But I think something else is going on, here. And Black Velvet Bruce Li has hit it. I believe there is some very strong circumstantial evidence suggesting that Mr. Ruttenberg’s bar was targeted by the city of Manassas Park because the city had its eye on the property as a possible site for an off-track betting facility for the Colonial Downs horse racing track in New Kent County, Virgina.

First, a bit of history on off-track betting (OTB) in Virginia.

In the early 1990s, the Virginia state legislature gave approval for a limited number OTB satellite offices to be licensed around the state. The legislature also licensed a company called Colonial Downs to run the main track, as well as the satellite sites, where customers bet on races shown on video monitors. Within a few years, facilities had been approved in a few spots in southern and western parts of the state — mostly in towns with light budgets, the kinds of places so hungry for business and tax revenue, they could look over the bad rap a wagering site sometimes gets.

But the gold mine was in Northern Virginia. That’s where the state’s money is. According to estimates published in the Washington Post, an OTB site in Northern Virginia would bring in an estimated $90 million in revenue, and around $550,000 local tax revenue. To put that into perspective, the other satellite spots combined bring in about $130 million.

Unfortunately for Colonial Downs, because Northern Virginia does have money, it can also afford to turn its nose up at OTB. And it has. Throughout the 1990s, jurisdiction after jurisdiction in NoVa turned down opportunities to host an OTB facility, either by referendum, or by a vote of the city or county council. By 1996, Manassas Park was one of the last towns anywhere near D.C. that had yet to vote down an OTB site.

OTB hit the ballot in Manassas Park in 1996. It lost, but by just 74 votes. Colonial Downs and the OTB proponents would be back for another shot, in eight years. But let’s stick with 1996 for just a moment. At the time, Rack n’ Roll owner David Ruttenberg started to wrap his brain around just how lucrative an OTB facility might be. Knowing the layout of the city, he figured his bar was sitting on land that would make an ideal location for a betting parlor.

Ruttenberg was right. The small, hour-glass shaped town of Manassas Park had been completely zoned out to new development on one side, and was filled with upper-income plots on the other — the type of homeowners who wouldn’t tolerate a gambling operation in the neighborhood. That left little else but Ruttenberg’s own shopping center. What’s more, the main highway into town ran right by the center. It wasn’t just an ideal location. It was really was the only location.

So Ruttenberg got together with the other major tenant of the shopping center and drew up an offer, which they sent to Colonial Downs. If the OTB resolution passed, the memo said, Ruttenberg and the other tenant would sell their businesses, their cooperation on their leases, and their consult to Colonial Downs for $5.25 million. I’ve seen a copy of the offer. This is important to keep in mind. Because it shows that Colonial Downs — and presumably by extension, the city of Manassas Park — knew that Mr. Ruttenberg was savvy, and that it was going to take a lot of money to get him to hand over his business and his lease. If they wanted that space in 2004, the 1996 offer proved they’d either have to pay him a lot of money, or find a way to throw him out.

Here’s the kicker: After the 1996 referendum failed, Ruttenberg’s landlord grew wise to the notion that if OTB came to Manassas Park, the facility would very likely go right in his shopping center. And he’d likely profit handsomely from it. So going forward, he put a clause in his tenants’ leases notifying them that if OTB ever came to Manassas Park, they would have to vacate, no questions asked.

But David Ruttenberg was on good terms with the landlord’s property manager. Before he signed his next lease, he asked if he could have that clause removed. The property manager obliged. I’ve seen a copy of Ruttenberg’s lease. And I’ve seen a copy of the lease signed by the largest tenant in the shopping center right now. The latter has the clause. Ruttenberg’s lease doesn’t.

Fast forward to 2004. After eight years, OTB is set to go back on the ballot in Manassas Park. Keep in mind that an incredible amount of money goes into these campaigns. According to the Washington Post, Colonial Downs spent about $20 per voter to push the OTB referendum through in 1996, including promises to offer every resident of the town a free bus ride to the Chesapeake OTB facility, free lunch, and a free $2 wager. They won public support from the city’s mayor, police chief, and school board. They lost by an eyelash. So it’s a safe bet (pardon the pun) that they were going to cover all of their bases after having eight years to plan for the next go-around.

Their prospects seemed good in 2004. The OTB facilities in Chesapeake, Richmond, Hampton, and Brunswick County were bringing in lots of money, and little of the crime or problem gamblers critics predicted. Public opinion was turning. The Virginia assembly was so impressed it authorized an increase in the number of licensed OTB parlors in the state to 10.

Let’s go back to Mr. Ruttenberg and the Rack n’ Roll pool hall. The raid on his bar came in June 2004, five months before the referendum was up for a vote. The harassment of Mr. Ruttenberg and the drug activity in his bar (much which he’d later have good evidence to suggest was instigated by undercover officers and paid police informants) had been going on for months. Rumors were flying all over town that Mr. Ruttenberg was a drug dealer, a child molester, a drug addict, a rapist, and that Rack n’ Roll was an “open air drug market.” Friends, customers, and others around town have told him — and me — that source of these rumors were often members of the Manassas Park Police Department.

That latter description– an”open air drug market”– is interesting. Virginia’s Alcoholic Beverage Control can revoke a liquor license if it determines that a bar owner isn’t doing enough to keep drugs out of his business. He needn’t be engaged in any illegal activity himself to lose his license.

Here’s the Washington Post in September 2004:

Colonial Downs, Virginia’s only parimutuel horse-racing track, wants to bring an off-track betting parlor to Northern Virginia — namely to the city of Manassas Park.

[…]

The site proposed by Colonial Downs for a betting parlor is in Manassas Park Shopping Center, at a busy intersection less than two miles from both Fairfax and Prince William counties.

That’s the shopping center where Rack n’ Roll is located.

And read this, also from the Washington Post in October 2004:

Colonial Downs, Virginia’s only legal gambling company, is so confident it will win a proposal to allow off-tracking betting in Manassas Park that it has already leased space, gambling that Tuesday’s vote will turn out better than the last one, in 1996, when voters rejected a betting parlor by 74 votes.

That space was in the Manassas Park Shopping Center.

The raid happened in June 2004. The ensuing harassment continued through the election. But things didn’t work out as planned. The OTB referendum was again defeated, this time soundly, with 64 percent of the vote.

So why did the city continue its pursuit of David Ruttenberg’s business? My guess is to save their asses. Ruttenberg and his father estimate that the raid and ensuing investigation cost taxpayers around $200,000. And the only thing they had to show for it was a couple of extremely lame alcohol violations.

The state ABC board has since revoked Rack n’ Roll’s alcohol license (the ruling by the ABC judge was a joke — I’ll get to that later, too). David Ruttenberg is running the bar at a loss, hoping he might find a buyer — though the city seems to be blocking his efforts to sell, too. Seems to be a full-on, vindictive grudge at this point.

Last summer, the Virginia state police concluded an investigation into Ruttenberg’s case. Ruttenberg called me one evening to tell me that the state police had found enough to bring the report to Prince William County commonwealth’s attorney Paul Ebert, with the recommendation that he start an investigation. Ebert declined. Ruttenberg says the state police investigator expressed his regret at the Ebert’s decision.

The state police investigator hasn’t responded to several attempts I’ve made to contact him over the last few months. The state police also won’t release the results of their investigation to the public, or to David Ruttenberg.

There’s much more detail to all of this, which I’ll fill in over the next several weeks. But here’s the important part: None of this went into Ruttenberg’s initial lawsuit against the city and several city officials, because they can’t yet prove any of it. Because the judge in the case granted the city’s motion to dismiss, Ruttenberg won’t even get the benefit of discovery to delve into what role OTB may have played in the city’s attempt to shut down his bar.

Some of the stories I’ve heard regarding the town’s relentless pursuit of this guy are bizarre. I wouldn’t have believed them were it not for the fact that everything Ruttenberg has told me over the last year has, to this point, checked out. I’ll share some of those stories in future posts.

A few more things I’d like to note in this initial post:

  • David Ruttenberg has no criminal record. Despite the constant attempts at entrapment, efforts to get his friends to dish dirt on him, and the general smear campaign against him over the last several years, they’ve yet to charge him with a crime. He was once arrested for the crime of filing a false police report. But the prosecutor refused to pursue the case. She was right not to. I’ll get into why in a subsequent post. But the charge was yet another bogus attempt to smear the man. The point here, is that no only does Ruttenberg have no criminal record, until the raid, he hadn’t a single alcohol violation, either. His bar had a perfect record with the ABC board.
  • Though I strongly suspect that OTB was the real reason behind the town of Manassas Park’s campaign against Rack n’ Roll and David Ruttenberg, for now, I have no evidence that Colonial Downs participated in the campaign. I also don’t know which specific city officials instigated the campaign, and who knew what, when, although I do have some strong suspicions. For now, all I’m saying is that the harassment of Mr. Ruttenberg and his business has gone on for years now, and there’s very little to show for it. Something had to be motivating all of this this. And the coincidences associated with the OTB referendum, the leases, and several other bits of evidence I’ll post later point to a concentrated effort to separate David Ruttenberg from his legally-rented space in that shopping center.

    Check this site and the BVBL site over the next few weeks for more information.

    Digg it |  reddit |  del.icio.us |  Fark
  • Comments are closed.