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Liquor Authority described as too cozy with industry

The State Liquor Authority is too cozy with the industry that it regulates and has decreased its enforcement efforts, state legislators were told in a hearing Tuesday.

This has led to increased teenage drinking in bars and illegal pricing deals by wholesalers and retailers, according to local government officials, small business owners and a former agency whistle-blower who testified in the hearing.

Top officials of the agency, who later hurried down a hallway and blocked a doorway to avoid reporters, insisted the agency's mandate is being followed but said budget cutbacks by the Pataki administration have sharply reduced the number of Liquor Authority enforcement investigators.

The cutbacks in staff at the agency, from 260 employees in 1998 to 148 today, have "diminished our enforcement capabilities," authority Chairman Edward F. Kelly told a joint Assembly committee examining increasing criticism of the agency and its oversight of state law.

"We do the best we can," Kelly said as he supported suggestions from Democratic legislators who said the Liquor Authority needs a larger enforcement staff.

Backed by lawyers and other representatives from the alcohol industry, who were dismissed as agency "apologists" by one critic, Kelly told lawmakers his agency is committed to enforcing the state's liquor laws that, because of the product involved, set strict standards on how alcohol can be sold.

"Wherever there is a violation, we will go after it," Kelly said.

The hearing followed a Buffalo News series in July showing that the Liquor Authority, under Kelly's leadership, has let the alcohol industry skirt the state's liquor laws when it offers retailers illegal payoffs of money, trips, even gold Krugerrands, to push certain brands of wine, vodka or whiskey.

Kelly did not discuss the pricing controversy and walked away when reporters asked him about it. Lawmakers on the panel did not pose questions on the matter, even though the issue later took up hours of testimony.

Assemblyman Robin L. Schimminger, D-Kenmore, who called the hearing, said that "questions follow the testimony" and that Kelly testified first -- before other witnesses raised the criticisms.

State and local lawmakers also zeroed in on the Liquor Authority for failing to adequately monitor bars and underage drinking laws, especially in college towns. They said the agency has adopted a policy of slapping violators with relatively small fines when it should be shutting down bars, liquor stores and others that violate the underage provision and other sections of the drinking laws.

Fredonia Mayor Frank Pagano, president of the New York Conference of Mayors, said the Liquor Authority has been increasingly leaving liquor law enforcement -- especially underage drinking -- to local police, who often do not have the resources or investigative jurisdiction over bars. Pagano pointed out that only three Liquor Authority investigators police 19 counties in the western part of the state.

"Unless the SLA makes enforcing the [alcoholic beverage control] law a priority by allocating sufficient financial and human resources," Pagano said, "the regulations themselves are worthless."

Chester Menkiena, a retired Liquor Authority investigator who worked in the Buffalo field office for 20 years, told lawmakers he had to leave the agency when it became apparent that the abuses he uncovered about the pricing of liquor and wine were going to be ignored by top agency officials.

"I'm a team player," Menkiena said, "I love the SLA -- but they didn't do their job."

He said widespread "crime and corruption" are occurring that he said includes bribes from wholesalers to store owners.

Menkiena, who went public with his story in The News series in July, talked Tuesday about an industry "totally out of control."


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