From what I understand, the 'law' only applies to government agencies. Therefore, the Bar owner didn't actually break any law. He is free to fly any flag he wants over private property.

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I think at this point there needs to be a focus on an immediate increase in spending and I think this is a time when deficit fear has to take a second seat . . . I believe later on there should be tax increases. Speaking personally, I think there are a lot of very rich people out there whom we can tax at a point down the road and recover some of the money."
-- Barney Frank, October 20, 2008