Mr. S.O.B.

Rick's CEO Robert Watters wants to make sexually oriented businesses respectable. So why, in his adopted hometown, does he get no respect?

He first worked as a tax-law specialist at the Houston office of Touche, Ross & Co. (one of the predecessors to Big Eight accounting firm Deloitte & Touche). Although still not licensed to practice law in the United States, in 1981 he joined the Houston law firm Hollrah, Lange and Thoma. (Because the Texas bar does not accept credentials from foreign law schools, Watters was forced to take the notoriously difficult New York State bar exam. He passed it in 1984.)

At Hollrah, Lange and Thoma, Watters began growing cool toward the practice of law. His practice was becoming more generalized, less fun; he remembers getting "six o'clock headaches." But it was at the firm that Watters met Izzedin, a client with international banking problems. As a knowledgeable insider sums up the situation, Watters "was just an unlicensed attorney doing a little legal work for a guy who was spending the money his mother made in oil."

In 1982, Izzedin opened Trumps, a mainstream nightclub at 3113 Bering -- eventually the site of Rick's. "Trumps was to be a young and upscale supper club and disco," says one of Izzedin's then-partners, publicist and social force Becca Cason. The other Trumps investors included more society-column mentionees: oil broker Nick Florescu; Michel Lakhdar, owner of Chianti restaurant and the Martini Bar; and Steve Wyatt, Lynn Wyatt's son whose "friendship" with Sarah Ferguson later caused a stir on two continents.

Despite the society types involved, Trumps faltered. First the lunches failed; then the whole enterprise fizzled. Izzedin formed a new partnership, this time with J.B. Gentry and Dallas Fontenot, who'd come up through the ranks of topless bars. The three converted the Trumps club and corporation to run an upscale topless joint at the same location. Izzedin got Watters to do the legal work.

Before the conversion was complete, Fontenot was at the unnamed club-to-be when an out-of-towner climbed out of a cab and asked whether "Rick's" was open yet. The name struck the owners as a good one, conjuring images of Casablanca, Bogart and the club where, sooner or later, everybody winds up.

Thus christened, Rick's opened in 1983 with classy-looking marble floors, valet parking and a substantial menu; fresh-looking topless dancers paid a fee to work there and kept the cash they collected from the customers. The formula succeeded wildly. The club boasted top liquor sales in the city and state. Big spenders dropped $8,000 a visit; some parties approached $20,000.

As sure as the club became wildly successful, it also spawned a snake bed of attacks, counterattacks and lawsuits between the partners. First Gentry exited, leaving Izzedin and Fontenot with 50 percent each. Only in 1987 did Watters enter the partnership: in exchange for his work obtaining Rick's sexually oriented business license, Izzedin and Fontenot each gave him five percent of the club. (Later Izzedin would question whether he even deserved that much.)

Watters, who came to the business through Izzedin, joined Fontenot in attacking the oil man. Watters and Fontenot alleged that Izzedin sexually harassed the waitresses and performers at Rick's, encouraged them to take drugs and engage in prostitution. In a 1988 deposition Watters alleged that Izzedin dated many of the women who worked at Rick's. An opposing attorney asked Watters, who had divorced his first wife, whether he wasn't in fact dating a Rick's performer at the time. Yes, Watters replied. "The first stone is a lot different than 99 stones, though."

(Watters eventually married and divorced that topless dancer, Gweena "Gigi" Smith. His third and current wife, Tammara Brasher, is also a former performer, and is younger than either of his first two wives. "I don't think I could have a long-term relationship with someone who hasn't danced," he says; no one else could understand his business.)

In the end, Izzedin left Rick's and went to Dallas to open the opulent topless club Cabaret Royale. There he garnered some great publicity, then ran into trouble with the U.S. Department of Labor. He is no longer listed as an owner.

After Izzedin's exit, Watters and Fontenot split Rick's 50-50. As partners, they made a strikingly odd couple. Watters was a cool-headed, somewhat aloof attorney given to conservative suits; Fontenot was heavyset and emotional, and preferred Hawaiian shirts. Watters read books about management techniques; Fontenot put his arm around employees.

Some say that Fontenot was the idea man, and Watters was simply a behind-the-scenes business operator. Even Watters credits Fontenot with conceiving great strategies. For instance, it was Fontenot who thought up Rick's VIP Room, the luxurious private balcony accessible only to those who pay membership fees; and Fontenot who thought to pay cabdrivers and hotel concierges commissions to steer customers to Rick's.

Watters and Fontenot planned a series of clubs, and together opened the Colorado Bar & Grill, another high-concept topless spot. But eventually their different styles led to a serious rift and another round of litigation. Fontenot took the Colorado, which has sometimes outstripped Rick's in business, and Watters became the sole owner of Rick's. In ten years, he'd gone from being merely a consulting lawyer to owning the joint.

As might be expected, Watters spends a lot of time in court -- though not in his capacity as a lawyer. He's sued his partners, been sued by his partners, been sued by former performers, been sued by people who were never in the bar but want to hold it responsible for the actions of an employee after work, and been sued by a guy who was shot in a robbery outside the Colorado. Rick's has been investigated by the I.R.S. and the U.S. Department of Labor, and has had to pay more than $250,000 in back taxes to the TABC. In 1991, Harris County sued Rick's, along with other clubs, and settled for an agreement that sexually oriented businesses would form a local organization to "set reasonable standards of conduct in the sexual entertainment business."

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