Party Nazis

Has Mardi Gras become a tool of mega-buck sponsors? That's what state and federal authorities are asking.

On a cool Monday evening last month several dozen Soulard tavern owners marched into Joanie's Pizzeria for a meeting hosted by Mardi Gras Inc., the non-profit corporation charged with organizing St. Louis' pre-Lenten bash.

With animosity between the two groups at an all-time high, those in attendance that night say it wasn't long before the meeting split into two contentious camps. On one side of the room: Mardi Gras Inc. and its supporters, representing several of Soulard's best-known bars and businesses. On the other: a growing number of detractors who charge that Mardi Gras Inc. — and several nonprofits tied to the organization — has overstepped its bounds as a fundraiser and event coordinator. A prime example, they say, is a letter the organization sent out to bar owners a few weeks prior to the November meeting.

The first page of the letter stressed the importance of corporate sponsors in footing the bill for St. Louis' increasingly expensive Mardi Gras celebration, which is said to be second in size only to New Orleans. Page two outlined the fee each bar will be expected to pay Mardi Gras Inc. if it chooses to cooperate in next year's "sponsorship support program." The third page spelled out what they'll pay should they refuse.

The price variance is dramatic. Should saloon-keepers not adhere to the new sponsorship program this coming year, they'll pay a tenfold increase in fees to sell alcohol outdoors during the 2008 Mardi Gras festival. For the typical Soulard watering hole, that means a price hike from around $1,000 to $10,000. With bars counting on Mardi Gras for as much as 20 percent of their annual revenue, such fees might well spell the difference between a successful year and a middling one.

"I don't know if the letter was a scare tactic or what," says Denny Hammerstone, owner of the eponymous watering hole Hammerstones and one of several disgruntled bar owners in attendance. "But it seemed to come out of the blue. Mardi Gras Inc. is supposed to serve as a neighborhood coalition — not a dictatorship."

At issue during the meeting was defining what, exactly, constituted a violation of the sponsorship plan and how the event coordinators will enforce the rules. In years past Mardi Gras Inc. presented bar owners with photographed evidence of violations, but the role of the organization is not to police bars, says Mardi Gras Inc. executive director Tim Lorson.

"The fact of the matter is that without the support of sponsors, we cannot put on the type of Mardi Gras people have come to expect," says Lorson. "All we're asking is that bar owners use common sense: Don't display banners for non-sponsors, and if you want to sell a competitor's product, just call it 'beer' or 'shots' without advertising the brand."

This coming year more than twenty sponsors are expected to pick up roughly half the $800,000 budget Mardi Gras Inc. has earmarked for the February festival. The organization does not disclose how much individual sponsors contribute to the organization, but two of the corporate heavyweights are Anheuser-Busch and Southern Comfort. It's these sponsors that bar owners most risk offending under the new sponsorship program.

"Does this mean that I'll be fined if I don't take down the neon Heineken sign that's been in my window for eleven years?" asks Hammerstone. "Or if one of my bartenders wears a Jagermeister T-shirt, will I be fined? I don't know. Right now the rules are vague and Mardi Gras Inc. holds all the cards."

But bar owners aren't the only ones questioning the new regulations. Also in attendance at the meeting was at least one investigator with the federal government's Alcohol and Tobacco Tax and Trade Bureau (TTB). In recent weeks that agency, working in tandem with the Missouri Division of Alcohol and Tobacco Control, has interviewed several Soulard bar owners as part of an investigation looking into the legality of Mardi Gras Inc.'s sponsorship deals.

"We're looking at trade practices concerning several alcohol businesses and whether or not their actions are excluding the participation of other alcohol manufacturers," says Pete Lobdell, supervisor of the state's Alcohol and Tobacco Control. "Additionally, we're looking into whether the participating sponsors may be providing finances beyond the ordinary lines of credit to vendors participating in Mardi Gras."

Though Lobdell declined to discuss specifics that might jeopardize the investigation, he does confirm that Mardi Gras Inc. is near the center of the probe.

"Let's just say they're the middle-man orchestrating all of this," he says. Seated inside his warehouse office in Soulard on a recent afternoon, Mardi Gras Inc. executive director Tim Lorson wears a sweater-vest over a white polo shirt. Behind him two full-time assistants answer phones and file paperwork. Stacked in the corner of the tiny office are several cases of Southern Comfort and sundry bottles of booze left over from last year's festival.

Given the festive nature of his occupation, the 38-year-old Lorson likes to offer a drink to his clients — sponsors, vendors, bar owners and neighborhood residents — when they stop by the office. As for imbibing himself, the Mardi Gras Inc. chief says he rarely has time.

Since joining Mardi Gras Inc. in July 2003, Lorson has brought the organization's budget up from less than $300,000 to $800,000, with much of that money coming from sponsorship dollars.

Two years ago the St. Louis Regional Commerce and Growth Association pegged Mardi Gras as an economic engine worth $21 million to St. Louis. Lorson is determined to boost those numbers by emphasizing events such as the Crystal (Hot Sauce) Cajun Cook-Off, the Southern Comfort Taste of Soulard and the Beggin' Strips Barkus Pet Parade, which take place in the weeks prior to the Grand Parade and Fat Tuesday.

Lorson is aware of the government investigation into his organization's sponsorship deals but says he has not been contacted by authorities. He adds that the organization's attorney has reviewed the sponsorship plan and believes it contains no legal snares. As for the complaints by bar owners that the sponsorship regulations threaten their businesses, Lorson says nothing could be further from the truth.

Participation fees from taverns add up to less than $40,000, or roughly one-tenth of what sponsors kick into covering the costs of the party, says Lorson. It's bar owners, he maintains, who benefit most from the influx of funds and marketing made available through corporate endorsements.

"I explain it like this," says the Mardi Gras Inc. director. "We provide the bars with the bucket, the water and the fish. It's up to them to shoot as many as they can."

Lorson adds that the fines imposed on bars that fail to comply with the sponsorship agreement are nothing new. For the past three years, Mardi Gras Inc. has levied double fees upon those who advertised non-sponsors during Mardi Gras. This year's increase of ten times the normal fees, says Lorson, comes as a "wake-up call" after perennial violations in which bar owners displayed banners for non-sponsors.

"What we have here is a small mutiny of bar owners who feel they're being strong-armed by Mardi Gras Inc.," says Johnny Daus, owner of Johnny's Restaurant and Bar. "But I think they've been given ample opportunity over the last few years to jump onto the sponsorship program."

Daus, who also serves as president of the Soulard Business Association, adds that the crux of the problem lies behind the scenes in what he calls a "pissing match" between alcohol sponsors. For years Captain Morgan served as the official liquor sponsor of Mardi Gras, before relinquishing the sponsorship to Southern Comfort in 2004. Daus now surmises that Captain Morgan is using the money it once spent on Mardi Gras Inc. to fund promotions with individual bars. (Representatives for Captain Morgan and Southern Comfort did not return calls for comment for this article.)

"People tell me the ATF [the Federal Bureau of Alcohol, Tobacco and Firearms] is looking at Mardi Gras Inc. and Southern Comfort," says Daus. "But I say the sponsors aren't who they should be looking at. If anyone is doing anything illegal, it's the non-sponsors. They're starting all this B.S."

Nadine Soaib, owner of Nadine's Gin Joint at 12th and Allen streets, admits she fell sway to the Captain last year after feeling snubbed by the official sponsor. "Southern Comfort never even approached me," says Soaib. "When Captain Morgan showed up, I said 'OK.' I wasn't the only one. Our whole block was slapped with Captain Morgan banners."

As a result of the infraction, Soaib saw her participation fee for the 2007 Mardi Gras increase by $600. "Did I throw a fit? You bet I did. But I broke the rules, and Mardi Gras Inc. had the photos to prove it. What was I to do?"

Other bar owners aren't as complacent and charge Mardi Gras Inc. with selling out to commercial interests. After Hurricane Katrina destroyed much of southern Louisiana last fall, New Orleans signed its first-ever sponsorship in that city's long history of hosting Mardi Gras. The contract with trash-bag manufacturer Glad paid for much of the event's cleanup.

The glut of corporate dollars in St. Louis, say bar owners, has only served to create a bastardized version of the true Mardi Gras. Case in point, they say, is the signature drink of Mardi Gras — the Hurricane. Traditionally made of rum, the Hurricane most often advertised in Soulard in recent years uses sponsor Southern Comfort (a whiskey liqueur) as its base ingredient.

"Who the hell ever heard of making a Hurricane with whiskey?" grouses a Soulard bar owner who, like many interviewed for this story, asked not to be named for fear of retribution from Mardi Gras Inc. "It's made with rum. Not whiskey. But then, you can't win with these people. A Hurricane is whatever they say it is."


Bob Brinkman is the last living member of Soulard's original Mardi Gras krewe. A 70-year-old resident of south St. Louis County, Brinkman recalls the cold December night in 1979 when he and four friends huddled around a downtown bar discussing their plans for a party.

"It was colder than a witch's tit," remembers Brinkman. "The five of us decided that we needed something to pull us through the bleak months ahead. Hilary Clement suggested a Mardi Gras party at his house in Soulard. It pretty much took off from there."

With a budget of $1,250 ($250 collected from each of the five organizers) the men hosted their first Mardi Gras in February 1980. The festivities culminated at midnight when all 200-plus guests marched from Clement's house on Russell Boulevard (now home to Johnny's Bar & Restaurant) to John D. McGurk's Irish Pub, accompanied by trombones and horns.

"It was so cold the instruments froze to the musicians' lips," recalls Brinkman. "The next year we had the same party. When we walked outside for the midnight march, there were 2,500 people in the street waiting to join us."

By the early 1990s Soulard's Mardi Gras had grown large enough that it required year-round planning. Ann Chance, who served as volunteer director of the event from 1992 to 1999, says the goal of the party was to build business in Soulard, which had undergone a radical gentrification since that first Mardi Gras.

Still, it wasn't until 1997 that Mardi Gras — buoyed by unseasonably warm weather that year — attracted for the first time the hundreds of thousands of revelers that have become commonplace in recent years. The burgeoning crowds created a windfall for tavern owners and, all too often, headaches for residents who complained about property damage, public urination and litter.

In 1999 a near-riot broke out when police fired tear gas into crowds attending the Fat Tuesday Parade. The mayor's office and city aldermen responded to the melee by demanding that the festival form a third-party organizer. Mardi Gras Inc. was established to bring order to the drunken chaos.

Composed of a board headed by Soulard business owners and neighborhood associations, Mardi Gras Inc. hired a full-time executive director and established a budget of around a quarter-million dollars. Under Lorson's guidance, that budget has increased threefold. Lorson says the additional funds are necessary to cover the rising costs of throwing the party, including paying for some 800 portable toilets ($40,000) and several miles of parade barricades ($30,000). Lorson's salary accounts for approximately $70,000 of the budget.

But increased sponsorships aren't the only revenue fueling Mardi Gras Inc.'s expanding budget. So, too, are beer and alcohol sales generated through a subsidiary nonprofit called the Mardi Gras Foundation. That organization was formed in 2003 for the purpose of raising money for Soulard community projects and serving as an additional fundraiser for Mardi Gras Inc.

The foundation, whose officers include St. Louis Democratic Committee Chairman Brian Wahby and City Hall lobbyist Lou Hamilton, hosts the annual Mayor's Ball that kicks off Mardi Gras. It also organizes the nonprofit and charitable organizations that staff more than a dozen beer and alcohol booths working the streets of Soulard during Mardi Gras.

In 2004 the Mardi Gras Foundation took in more than $400,000, according to its most recent financials. More than half of that revenue — $242,000 — came from alcohol sales during the Saturday of the Grand Parade, with the foundation taking a 65 percent cut of all vendor sales. The charities working the booths earn the remaining proceeds. Last year the foundation doled out $20,000 of its proceeds to Soulard community projects. A far greater amount — as much as $75,000 — went to fund Mardi Gras Inc.

Brian Wahby, volunteer president of the Mardi Gras Foundation, says he hopes that in the future Mardi Gras Inc. will not need the proceeds from the alcohol sales. Until then, the foundation is there to ensure the parent organization meets its budget, especially when factors such as the weather and poor ticket sales can negatively affect revenues for Mardi Gras Inc.

Soulard bar owners, meanwhile, argue that the nonprofit alcohol vendors employed by the foundation work in direct competition with their businesses during the festival. Moreover, the vendor program has also attracted the attention of authorities. Peter Lobdell of the state's Alcohol and Tobacco Control confirms his agency's investigation extends into how Mardi Gras Inc. raises money through the sale of alcohol, as well as how it issues permits to the outside vendors. In order to sell alcohol on the streets, the nonprofit vendors must apply for a liquor license through the city's excise division — but it's Mardi Gras Inc. and the Mardi Gras Foundation that determine which vendors will be forwarded to the city for approval.

St. Louis Excise Commissioner Bob Kraiberg, for the record, says he's unaware of any problems with Mardi Gras' vendor program and notes that events such as Fair St. Louis and Laclede Landing's Big Muddy Festival operate in much the same manner.

Equally puzzling to bar owners is yet another Mardi Gras Inc. subsidiary that sprang up last year. Mardi Gras Forever, according to filings with the Secretary of State's office, was formed to "organize, sponsor, manage, administer, plan, coordinate and raise money for a public event called St. Louis Soulard Mardi Gras."

The organization is headed by Tim Lorson's younger brother, Kevin Lorson, who works as a Soulard bar manager. Mardi Gras Forever has yet to file its financial records, but Tim Lorson insists that his brother's position is unpaid. The organization, says Tim Lorson, works primarily to raise funds for neighborhood-improvement projects. It recently donated $30,000 to build a wrought-iron fence around the park next to the Soulard Market.

But such generosity fails to resonate with Denny Hammerstone and other Soulard bar owners, many of whom are left scratching their heads at the various roles Mardi Gras Inc. and its subsidiaries play in hosting the festival.

"It's definitely become more political with each passing year," complains Hammerstone, who's grown nostalgic for the days before Soulard's neighborhood block party became an institution controlled by Mardi Gras Inc. "Do we really need 700,000 people down here each year? It certainly was easier back then."

"Victims of our own success" is how bar owner and Mardi Gras Inc. supporter Johnny Daus puts it. "Has Mardi Gras become too commercial? Sure. Believe me, nothing irks me more than stadium naming rights and all the corporate sponsorships you see in professional sports. But when you're running an event as big as Mardi Gras, all of a sudden you become the same kind of whore. Tell you the truth, I'm surprised we don't have official sponsors for the porta-potties. Somebody has got to pay for this stuff."

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