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TABC Investigating Austin Charity Bar

Has a new charity bar in Austin found a loophole around Texas liquor laws?

The White House bar, on Rainey Street, is operating without a liquor license, which means it cannot legally sell alcohol.  Yet, the bar is filled with customers drinking alcohol every weekend.

After a tip about the bar operating without the legal paperwork, KEYE TV launched an investigation and brought our results to the Texas Alcohol and Beverage Commission. 

The White House is unlike any other bar in Austin.

"We're America's first charity bar," claims the bar's owner Wendy Thomas.    

As a charity bar, the White House claims to be not-for-profit, and all the alcohol at the bar is rumored to be free.

On a busy Friday night on Rainy Street, we sent our cameras inside to see exactly how this charity bar works.

Inside, we found a unique set up.  There are boxes lining the walls where customers can make donations to dozens of different charities. There are also two bars; one for customers to buy a cup and a mixer of juice/soda, the other where you get the alcohol added to the cup just purchased. 

"We don't sell alcohol we give it away for free," explained the bartender to our undercover cameras.  "You purchase the set-up from me, and I send you over there to get the alcohol."

We brought the video of this two-step drink process to the TABC, asking if the White House had found a loophole in the liquor laws and wanting to know if they were legally operating without a liquor license. 

"There's an exchange of money," explained TABC Captain Harry Nanos as he watched the video. "You have to buy a product to get to the alcohol. That's the red flag that they're selling without the permit."
Captain Nanos said the TABC had already launched its own investigation into the White House last December, after several complaints.

"We will not tolerate operating without a permit," said Nanos.

But it wasn't until we showed the TABC our undercover video that a second investigation was launched, this time leading to charges against the bar owner.

"What I see in the video is a need for a further investigation," said Captain Nanos. "Which is why we went out there a second time."

Last Thursday, White House owner Wendy Thomas was arrested and charged with selling without a license. 

When we returned to the White House the following Tuesday, we found the White House still open for business.

"Tonight we're doing a bottomless cup," said owner Wendy Thomas. "It's $15 dollar for a bottomless cup, which means they can keep refilling their set ups as much as they want for one set price."

Wendy Thomas said she didn't want to talk about her arrest or the charges against her, but did invite us and our cameras inside the bar to explain her operation.

"Think of it like a BYOB bar that have been running in Texas forever," said Thomas. "Where you can bring your alcohol in and you just buy your set up."

When customers purchase a "set-up" (a cup and mixer), they are given a token to put in one of the charity boxes on the walls.  Thomas says a portion of the cost for the token, after the bar's expenses are subtracted, will go to the charities.

So far, no charities have received any money, Thomas said. 

Despite her arrest, Thomas says she will continue running her bar, and says she plans to fight the TABC charges. 

"We never charge for alcohol, we can't, we don't even let them tip for alcohol," she stressed about her two-step process.

The TABC says if the bar continues to operate in the same way, it's likely more charges will be filed. 

By Karen Kiley