It was supposed to be a night of good cheer and celebration. Some 50 people associated with the USA Film Festival--board members, staffers, trustees, and assorted supporters and hangers-on--had gathered December 15 at the Highland Park home of trustee Dan Owen for a combination holiday party and board meeting.

The organization's president, Dallas advertising and marketing entrepreneur John Maloney, called the room to attention for an important announcement. After four long months without an artistic director, a replacement had been selected: Alonso Duralde.

A 27-year-old former employee and friend of the festival, Duralde had also worked as an entertainment journalist, writing about pop music, film, and video for the Dallas Times Herald, Dallas Observer, and Dallas Voice. For the last two years, he had been living in West Hollywood, writing free-lance entertainment articles for the Los Angeles Times syndicate and Movieline magazine, and flying back regularly to Dallas to help his friends at the USA Film Festival with programming, particularly with its annual KidFilm event.

Maloney told the crowd that Duralde would arrive in Dallas after the holidays to begin planning the festival, which was set for April 22-28. There was scattered applause.

Then, to the surprise of many in the room, local independent filmmaker Cynthia Mondell, a festival board member who served on the seven-member committee created to find a new artistic director, rose to speak.

Her voice shaking with anger, Mondell told the room that Maloney had just done something "unconscionable." She said that while Duralde was qualified for the position, he wasn't the search committee's choice. Its choice, as of Dec. 12, had been Susan Glatzer, a 27-year-old from the New York area, and a veteran of various nonprofit groups, film booking companies, and university teaching posts.

But within 24 hours of the committee's decision, the USA Film Festival's president, Maloney, who was also a member of the search committee and had enthusiastically voted for Glatzer, had met with three other search committee members, including the organization's outspoken and controversial administrative director, Ann Alexander.

After that meeting, Mondell told the crowd, the president had suddenly decided to ignore the search committee and install Duralde.

Dallas film producer Richard Kidd, a board member who was present at the party, was bewildered. "The president stands up and says that one person has been selected as artistic director," Kidd says. "Then somebody on the search committee says that person wasn't their choice, and that the results of their search were disregarded. The big question is, why? How could something like this happen? What does it mean?"

What it means is that the USA Film Festival is embroiled in one of the ugliest internal struggles in the organization's rocky 25-year history. It's a struggle complete with office skullduggery rarely seen outside of bad movies: heated public confrontations, taped conversations, and threats of lawyers.

The outcome of this conflict could determine the future of the festival, one of Dallas' largest, oldest, and most visible arts organizations. The opposing factions are battling to win the organization's mushy middle--consisting of a 60-member board of directors and some 3,000 members. The risk is that the clash will divide the organization and drive off contributors, no matter who wins.

It could also affect the careers of several local artists. One is Irving Film Commission chair Ellen Sandoloski, a search committee member who also supported Glatzer and has spoken out against the president's decision to install Duralde.

Another is Mondell, a respected independent moviemaker and pillar of the local film and video community; she has been accused of having selfish reasons for supporting Glatzer--namely, that fighting to install an artistic director with strong personal ties to the independent film industry could benefit her financially.

USA Film Festival publicist Cynthia Sutton also says Mondell is widely resented for raising a stink because she has failed consistently to raise the $2,000 a year in donations required of each board member.

At the center of the controversy is the festival's administrative director, Ann Alexander, who is frequently credited with rescuing the organization from six-figure debt and dramatically building up its membership since her ascension to the post in 1986. But the hard-driving administrator is also resented by members who say she is maneuvering for control of the festival, including its programming side. Alexander's critics suggest that she engineered Duralde's selection because she feared an outsider like Glatzer with close ties to the independent film industry could pose a threat to her authority.

Alexander declined to speak to the Observer about the charges she is trying to grab creative control. Her supporters also refused to respond to the charges. Instead they focus on Alexander's contributions to the festival, including saving it from extinction over the last decade.