Liquor Agency Biased Against Gay Clubs, Bar Owners Claim : Dispute: State officials insist regulations are applied fairly to all.

Earlier this year, Jesse Arias hung a drawing by a well-known gay artist in the West Hollywood nightclub he manages. The picture isn’t there anymore, but it may be getting even more attention as exhibit A in a feud between owners of gay bars and state liquor regulators.

Last summer, officials from the California Department of Alcoholic Beverage Control ordered Arias to remove the drawing--a life-size portrait of a nude man--from the wall at The Eagle, a gay bar on Santa Monica Boulevard. The drawing was by the late Tom of Finland, a Los Angeles artist who specialized in homoerotic nudes and whose works are sold in many gay and lesbian shops and bookstores.

Regulators said the picture violated 24-year-old state codes against offensive “visual displays” in places that serve liquor because it depicted male genitals. But, according to Arias, West Hollywood bar owners and city officials, the incident is the latest chapter in a history of regulatory harassment directed against gay-oriented nightspots.

At a recent meeting, a group of nightclub owners belonging to the West Hollywood Chamber of Commerce reportedly aired concerns about overzealous and hidebound enforcement from liquor regulators.

“It’s like, gimme a break,” Arias said. “If straight people want to come into our bar, fine. We don’t discriminate. But this is the kind of art we like to look at. If I walked into a straight bar and saw art that offended me, I would just leave.”

Said West Hollywood City Councilman Steve Martin: “I think it’s an incredible coincidence that the (gay) clubs on Santa Monica Boulevard are complaining about harassment, while we aren’t hearing any complaints from the (straight) establishments on Sunset Boulevard.”

Alcoholic Beverage Control officials vigorously deny allegations that they have an anti-gay bias. One top regulator ascribed the accusations to paranoia in the gay community.

“I’m scratching my head wondering how anyone would think this (incident) is part of a mass Gestapo action to put these (nightclubs) out of business,” said Carl Falletta, assistant director at the department. “Every day we’re out there citing places for violations.”

State codes passed in 1970 give regulators the power to deny a liquor license to any establishment that, among other things, features films or pictures showing full nudity or sexual acts.

Falletta said liquor stores and bars statewide are routinely cited for violations of the codes. In several recent cases, he said, liquor stores have been cited for offensive visual displays. But he could not immediately provide examples.

West Hollywood nightspot operators have aimed much of their criticism at Falletta’s deputy, Jane Hernandez, who they claim harbors a bias against gay men.

“She’s very slick and hides behind a cloak of regulation,” said Michael McVay, the co-owner of Capone’s, an upscale restaurant and gay bar in West Hollywood.

Hernandez said she has been going by the book: “Any time we detect a violation, we take some type of action to have it rectified. . . . It doesn’t matter where the violation is.”