HELENA — Montana officials won't pull the liquor licenses of an ultra-exclusive ski resort that counts Bill Gates and Justin Timberlake among its members as part of a $370,000 settlement agreement with Yellowstone Club owners and executives, including one who is a major campaign donor to Gov. Steve Bullock.
The deal signed last week and made public on Monday settles allegations that Yellowstone Club officials served alcohol at a bar and restaurant that had applied for, but had not acquired, a liquor license, and intentionally deceived state inspectors who visited the site.
The agreement allows resort owners and executives to keep the four liquor licenses for the club's bars and restaurants. It also keeps their application for a fifth license alive.
However, the liquor license owners and the applicants for the new license must pay the $370,000 fine and remove Yellowstone Club general manager and vice president Hans Williamson from the club's lucrative liquor business — eliminating his role as a liquor license owner and representative in charge of oversight of the club's licenses.
Three of the four liquor licenses are co-owned by Sam Byrne, a Massachusetts real-estate investor who is co-founder and managing partner of the company that owns the Yellowstone Club, CrossHarbor Capital.
CrossHarbor in 2009 bought the bankrupt resort north of Yellowstone National Park that features a private ski hill and multimillion dollar log and stone mansions that attract the rich and famous as members.
Byrne and his wife Tracey are longtime donors to Bullock, a two-term governor who is now among nearly two dozen candidates seeking the Democratic nomination for president.
Federal Election Commission records show Byrne donated $31,152.32 to Big Sky Values PAC, the political-action committee Bullock created in 2017 when he was exploring his presidential run. Byrne also donated the maximum $1,320 allowed to Bullock for the governor's 2016 re-election campaign. And Byrne and his wife gave Bullock a combined $2,520 in the 2012 governor's race, also the maximum allowed under state law.
Representatives for Bullock and the Yellowstone Club said Tuesday that those past donations had nothing to do with the resolution of the dispute over the liquor licenses.
Department of Revenue officials kept the governor's office aware of the case, Bullock spokesperson Marissa Perry said.
"We instructed the department to treat it like any other enforcement action," she said.
Shane Reely, the attorney for the Yellowstone Club who negotiated the settlement, said he was not aware Byrne had donated to Bullock in the past.
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"I literally have had no contact with the governor's office," he said.
Becky Schlauch, the Department of Revenue's liquor control division administrator, said such settlements are often made in these kinds of cases to avoid the cost and risk associated with litigation.
The fine in this case is "in line with other penalties that we have assessed," she said.
The liquor license dispute emerged after Williamson, the club's general manager, applied in December for a liquor license for the club's new Buffalo Bar and Grill and its Boot Room late night hangout.
The establishments appeared to pass an initial state inspection in January, but inspectors returned unannounced a week later after receiving a tip and found a fully stocked bar at the site with drinking customers even though a new license had not been issued, according to Revenue Department documents.
Williamson had ordered the booze — which had been purchased through the other licenses at the resort — packed up and moved out in trucks to hide it from the inspectors the day before the inspection, revenue officials alleged.
State officials seized 2,979 bottles of liquor, 3,108 bottles of wine, 2,954 bottles and cans of beer and 31 kegs of beer stashed on the resort's property and in unlicensed warehouses. They then filed the action to deny the new liquor license application and revoke the club's existing liquor licenses.
Under the settlement agreement, the liquor license owners admit to the sale and storage of alcoholic beverages in unlicensed premises and that they failed to take an active role in making sure the operation ran lawfully. They also admitted that Williamson, who was the designated location manager for all of the liquor licenses, removed and hid the alcohol in an attempt to deceive state officials.
The licenses are owned by limited-liability companies made up of different Yellowstone Club and CrossHarbor executives, including Byrne and Williamson.
"The aforementioned license holders and all of the individuals involved have accepted full responsibility and, going forward, will comply with all of the conditions of the settlement and ensure continued compliance with all laws and the department's administrative rules," Reely said, reading from a prepared statement.
Conditions of the settlement include:
- Williamson may keep his position at the Yellowstone Club, but he won't be allowed to remain a liquor license co-owner or oversee the liquor operations.
- The state will suspend each bar and restaurant from serving alcohol for seven to 20 days, each at different times in August, September, and December.
- One or two violations go on each licensee's record as part of a penalty schedule that calls for revocation at the fourth offense in a three-year period.
- The club's employees must undergo alcohol sale and server training within a year.
- The club regains the seized alcohol.