Should a Winooski veterans organization get a new liquor license — even if it's failed to pay a $22,000 overdue property tax bill?

That's the question the Winooski City Council is grappling with as the Regular Veterans Association Post 514 lobbies for help paying what's due and for tax-free status going forward.

The RVA is seeking renewal of its first-class liquor license from the city council, which doubles as Winooski's liquor control board. Winooski officials are holding out on the license until the vets come up with a plan for settling a $21,888 tax tab that's been accruing since summer 2008.

The Regular Veterans Association, which is open to any honorably discharged service member, is struggling financially in the wake of numerous "embezzlement" scandals and a pending sexual harassment lawsuit that could also prove costly for the group. 

Winooski police arrested two members of the RVA in 2004 on charges of embezzling $2800 from the organization, according to Deputy Chief Rich Benoit. Last November, the RVA asked police to look into the theft of $807 from the post. Now RVA officers claim that a half dozen individuals fleeced the organization to the tune of $200,000 over a six-year period. Winooski police confirm they're investigating yet another claim of embezzlement lodged by RVA in 2009, but could not comment on the scope of the probe.

"Yeah, there's been some stinkers over here, people who I would not say were honorable officers," says Post Commander Marty Martinez, a former Naval crew chief who completed two tours in Vietnam. "I want to bring it back, to make it a place veterans can call their second home." 

The Regular Veterans Association occupies a white brick house on Weaver Street in Winooski. The dimly lit hall features a "canteen" with coolers stocked with Budweiser bottles. There's also a pinball machine and foosball table, an old-fashioned jukebox and a dance floor.

The Winooski chapter was founded in 1944 as a place where veterans ineligible for membership in other vets groups, such as Veterans of Foreign Wars, could socialize. It's one of only six remaining chapters in the U.S. The national RVA dissolved in 1991, but Martinez says that Post 514 still has more than 800 members.

The RVA is operating in the black, Martinez says, but barely. Losing its liquor license would seriously hurt the 66-year-old post's ability to stay afloat, he says. 

Like a lot of veterans groups, the RVA makes steady income from selling beer and liquor during regular hours and at special events such as birthday parties and baby showers. But unlike the V.F.W. and the American Legion, the RVA doesn't have a congressional charter. That means it doesn't have non-profit status, and therefore isn't tax-exempt.

The RVA's annual property tax bill is $11,615, but the organization hasn't made a payment since August 2008, when it paid a $2710 installment to the city. The current balance consists of $19,745 in principal, $1492 in interest and $650 in late penalties.

Martinez and fellow veteran Paul Clancy pleaded with the city council on April 19 to renew the RVA's liquor license and exempt it from future property taxes.

"Other bars can afford this tax," Clancy said. "We're not a bar where people just come in and spend all kinds of money. We have vets who come in — some have a Coke just so they can sit and talk to other veterans."

Martinez pointed out the organization is a positive force for the community, too. Last Saturday, the RVA hosted a charity "Calcutta" raffle to raise money for the American Cancer Society.

When the RVA was established in 1865, the Congress wasn't yet chartering veterans groups, Martinez and Clancy argued before the council. Nonetheless, it's been a "recognized" veterans organization for years. The veterans came armed with letters of support from Vermont's congressional delegation, including one from Sen. Bernie Sanders urging Winooski to forgive the RVA's tax bill.

Mayor Michael O'Brien, who heads the city council, says the council wants to work with the veterans — but only if the delinquent tax bill is paid.

"The sense of the council is to help out these folks as much as possible, but not necessarily set a precedent in terms of, You didn't pay your taxes and we're going to ignore it," O'Brien says.

The City Council can't nullify the veterans' tax bill, O'Brien says. Only the Board of Civil Authority — a 20-member body composed of city councilors, board of education members and justices of the peace — can do that. And even if it did, the RVA would still be on the hook to pay $6575 in state education taxes. Exempting the RVA from paying that tax would require a citywide referendum.

Historically, Winooski has been generous to its veterans. It's one of only a few Vermont towns that grant disabled servicemen a property tax break worth $40,000 off the assessed value of their homes.

But the RVA is facing legal troubles the city can't fix. Last month, Superior Court Judge Helen Toor ordered the RVA and its insurance company, St. Paul Travelers, to pay $38,104 to Leslie Richardson, an RVA bartender who was injured on the job in 1993.

Another past RVA employee, former bar manager Sharon O'Neal, is suing the veterans group for wrongful termination, claiming she was fired for speaking up about sexual harassment by an RVA's bookkeeper. O'Neal claims in a lawsuit filed in Superior Court in Burlington that the officer slapped her butt, tried to grab her breast and once offered her money if she'd let him look down her blouse.

Martinez said he couldn't answer questions about pending legal actions and could not refer questions to a lawyer because the organization is switching attorneys.

The Winooski City Council didn't come to any conclusions, either, on Monday night. The councilors voted to table the RVA's liquor license question until the next city council meeting, in May. 

Photo: Jordan Silverman.