After two sessions of damning testimony presented by the city which could result in the revocation of his liquor license, embattled Congress Theater owner Erineo “Eddie” Carranza had his turn to defend himself Tuesday in the third proceeding before Deputy Hearings Commissioner Robert Nolan.

Harlan Powell, Carranza’s fourth attorney in the last seven months, called three witnesses to refute the earlier evidence presented by the city.

The first hearing in mid-January included testimony from an undercover police officer with the Chicago vice squad who was investigating complaints that theater security guards seize drugs from concertgoers and resell them. Police also reported five incidents that “violated a state law regulating narcotics or controlled substances” at the venue between September 3, 2011, and April 15, 2012, and a patron testified that that he was beaten by venue security after a show on May 27.

At the second hearing in late March, a Chicago Police sergeant testified that Congress staffers lied about serving alcohol when his unit arrived to investigate suspicions of underage drinking during a DJ Rusko set in May 2012. Nolan also heard testimony that the emergency room of Saints Mary and Elizabeth Medical Center in Wicker Park reported several concertgoers “of various ages” arriving from the Congress in a private ambulance with symptoms of extreme intoxication, many of them “barely breathing,” and that the staff had not reported to police a large fight during a Chief Keef show in April 2012.

On Tuesday, Ahmad Mahidi, manager of the Congress since 2004, testified that on the night of the DJ Rusko set last May, Chicago police officers arrived and asked Mahidi if staffers were serving alcohol inside. Mahidi said they were, then called his brother Atieh, speaking over a walkie-talkie in Arabic, and told him to turn off the 10 beer taps, even though police had not instructed the venue to do so.

The testimony conflicted with Sgt. Joseph Giambrone’s testimony in March, and Assistant Corporation Counsel Maggie Shiels challenged Mahidi in cross-examination. Giambrone said that when he asked Mahidi if they were serving alcohol at the venue, Mahidi said no, gave instructions in Arabic through the walkie-talkie, then ran ahead of the police officers into the venue. When the officers walked inside, they observed Mahidi and his brother turning off the taps, Giambrone said.

Also testifying for Carranza: Jonathan Errum, who has worked security at the Congress for two years. He testified that after the DJ Armin van Buuren show ended “before midnight” on May 26, 2012, he got a call on the walkie-talkie from Chris Willis, a security guard with electronic dance music concert promoters React Presents, who said that a patron spit on him outside the theater and he needed assistance.

Errum said he then went to the back alley with two other security guards and saw concertgoer Marco Garcia handcuffed and held by Willis and another React Presents security guard, Ramon Montenegro. Errum claims to have never touched Garcia, and he said that Mahidi was not present when he led them to the security office. He also said that he had never met Willis or Montenegro before this incident, and he never saw them again after.

Again, the city attorney challenged the witness, saying that he did in fact see Montenegro again on January 15, 2012, during the first Liquor Commission hearing. Garcia also identified them on that date in January, saying they were part of the group of six to eight security guards who attacked him in the alley. Garcia further testified that Mahidi was the one who released his handcuffs, and was present for much of the ordeal, which Errum denies.

Errum also was present on the night of the fight that undercover cop Officer Robert McCallum witnessed on April 13, 2012, during the Chief Keef concert. Errum testified that a heated exchange began in the lobby “between 9 and 10 p.m.” and got physical outside. He said they broke up the fight involving about 10 men in two to three minutes minutes, and then they dispersed.

McCallum told a much different story in January, testifying that the fight started inside just before 10:15 p.m., and a call for more police assistance was placed at 10:18. During a testy 10-minute back-and-forth, Commissioner Nolan said there either were two fights—one that only occurred outside, as Errum claims, and one that Officer McCallum witnessed inside the venue—or one of the witnesses is lying.

Finally, Carranza called Rizwan Hussain, project manager and soon-to-be-licensed architect working on improvements at the 87-year-old theater.

Powell called Hussain to the stand to refute the Public Nuisance/Deleterious Impact charge, since he claimed to have been involved in renovating the Congress Theater even before these charges were filed in March 2012. However, Shiels objected and Commissioner Nolan sustained on the grounds that the city is not prosecuting the physical condition of the building—at least in this case.

In separate legal proceedings initiated by the city, the Congress is being sued to correct a literally A-to-Z list of “hazardous, dangerous” conditions at the venue. The judge in that case is allowing the main floor of the theater to remain open pending the next city inspection, but the second and third floors have been closed to the public since January, and capacity has been reduced from 5,000 to 3,000.

The hearing ended with closing arguments as Shiels maintained that police officers Giambrone and McCallum and concertgoer Garcia are credible witnesses who have no reason to lie about what they saw, while people associated with the Congress have a lot to lose if the venue loses its liquor license.

Powell responded that the police reports for the Public Nuisance charge were “lazy legislation” and hearsay, while Garcia’s testimony was more confusing than compelling since he identified the security guards “by clothing” and not as “individual people.”

The attorney added that Carranza is in an impossible situation of “damned if you do, and damned if you don’t” because “none of these incidents would have come to the city’s attention without the licensee reporting them.” Carranza reported these incidents to the city as required, and now he’s being punished for it, Powell said, concluding that arrest reports aren’t enough evidence to declare the business a public nuisance.

Nolan closed the hearing by saying he will take the case under advisement and make a recommendation to the Liquor Commission at an unspecified time in the future. The next session of Deleterious Impact/Public Nuisance hearings against the theater takes place on Tuesday, May 7, while the next hearing on the physical violations at the building takes place on May 9.

Leah Pickett blogs for WBEZ. Follow her @leahkpickett.

Earlier reports about Carranza, the Congress and the Portage theaters:

April 23: Congress Theater allowed to remain open, next inspection scheduled (Alison Cuddy reporting)

April 17: City wants the Congress shut down immediately

March 27: Chicago police official: Congress Theater ‘untruthful’ on night of underage drinking (Leah Pickett reporting)

March 8: The fate of the Portage remains a messy mystery

March 6: Congress Theater hearing rescheduled

Feb. 22: Congress Theater restoration underway, but it’s got a long way to go

Jan. 16: Congress Theater liquor hearings begin with undercover cop’s testimony

Dec. 3, 2012: A rally to save the Portage Theater ‘as we know it’

Nov. 28, 2012: The Portage Theater uses Graham Elliot’s name in vain

Nov. 2, 2012: Congress Theater’s new security chief: An ex-cop with a troubled past

Oct. 31, 2012: Congress Theater police calls rank with Soldier Field, United Center

Sept. 23, 2012: How did things turn so bad so fast at the Portage Theater?

Sept. 22, 2012: New Owner of the Portage Theater moves to evict current operators

Sept. 16, 2012: Congress Theater splits with development partner

Sept. 11, 2012: The Portage Theater: What’s Eddie up to?

July 26, 2012: Congress Theater partners up… and looks to expand

April 14, 2012: More trouble at the Congress Theater

March 28, 2012: Critical of Congress security, headliner brings his own

March 25, 2012: Congress Theater responds to complaints

March 22, 2012: City to Congress Theater: Clean up your act!