PrintByline: Elizabeth Stull The New York State Liquor Authority finally stopped pursuing charges against a Perinton country club, after three years of litigation and two court rulings in favor of the club. The suit was a colossal waste of time, according to an attorney for the club, Glenn E. Pezzulo of Culley, Marks, Tanenbaum & Pezzulo LLP. The agency has a long history of licensing delays, inadequate enforcement, inefficient administration, bribery and corruption according to a recent report from thestate Law Revision Commission. The case against the Midvale Country Club involved a charity fundraiser the club hosted for the Southeast Family YMCA in October 2006. An undercover state investigator paid $40 at the door and received a packet that included raffle tickets, a free drink coupon and some play money.
The Liquor Authority initiallycharged the club with four violations of the Alcohol Beverage Control Law s.106 and levied a fine of $1,500. Although an administrative law judge recommended all charges be dropped, the authority held a full board meeting and sustained one of the charges -- for selling liquor to a non-member -- with a civil penalty of $2,000. Midvale filed anArticle 78 petition challenging the agency's decision. Justice Evelyn Frazee granted the petition and reversed the agency in late July. The Liquor Authority has misapplied the statute and its decision is affected by an error of law, Justice Frazee concluded in her five-page decision in Midvale Golf & Country Club Inc. v. New York State LiquorAuthority, Ind. No. 2009/07443. On Tuesday, Pezzulo called the case just an instance of bureaucracy run amok. There should be a better way for them to use their resources if they are claiming they are understaffed, he said. 'Bureaucracy run amok' The state's Liquor Authorityprimarily licenses manufacturers, wholesalers and retailers of alcoholic beverages in New York, and enforces the Alcoholic Bev-erage Control Law. It is the state's third-largest moneymaker among state agencies, behind only the tax department and the Department of Motor Vehicles, according to the Law Revision Commission's report, released Sept. 30. For fiscal 2008-2009, the authority generated $54,090,413 -- $46,416,311 from licensing and $7,674,102 from enforcement. The authority's budget for 2009 was about $18,480,000. A massive backlog of 3,000 pending license applications -- which includes 240 in Western New York and 69 in Monroe County -- is exacerbating the state's economic crisis and suffocating small business owners, according to the commission report. Revision commission Chairman Robert Pitler, a professor at Brooklyn Law School, said some applicants have waited more than nine months for a license. This backlog epitomizes the many failures andstructural defects plaguing the agency, the commission report states. The agency is understaffed, internal oversight is non-existent andinadequate enforcement jeopardizes public health and safety, according to the commission. Authority spokesman William Crowley said Tuesday the average processing time is nine months for applications in New York City, and four to six months in Western New York. 'Tough sledding' The commission also is critical of inconsistent, and ineffective, enforcement policies. On the one hand, the authority follows a stricttextual analysis of the ABC Law by forbidding a liquor store owner from exchanging an unopened bottle of wine. On the other hand, the agency appears to ignore the statutory text by ignoring the factors to be considered in deciding whether to grant liquor licenses, the Law Revision Commission found. In years past, decisions of the SLA oft times found tough sledding in the courts, the commission's report states.Unsur-prisingly, recent case law also casts doubt on the SLA's competence to carry out the enforcement and licensing portion of its core mission. The report cites several court decisions (not including Midvale), to demonstrate the authority's reliance on incompetent investigations, poorly-prepared witnesses and poorly-drafted, unpersuasive and citationless court filings. In the past 12 months, 1,407 charges were filed against licensed establishments in Western New York, including 360 charges in Monroe County, Crowley stated in an e-mail. The commission is calling on the agency to focus enforcement efforts on serious issues affecting public health and safety, including underage drinking laws. New administration Dennis Rosen, a former assistant stateattorney general, took over as chairman and CEO of the Liquor Authority on Aug. 18. A state prosecutor for 27 years, Rosen conducted a 15-month investigation in 2005-2006 that resulted in $4.6 million in fines against several large wholesalers. The resulting court orders ended various pay-to-play practices that put law-abiding companies at a competitive disadvantage. The commission's report states the new leadership is off to a promising start. Some basic administrative protocols have been instituted and officials are meeting with industry representatives to discuss new policies and procedures, the report also states. In late September, the authority filled two vacant positions by appointing Assistant CEO Michael Jones, formerly a senior attorney with the Financial Industry Regulatory Authority, and Director of Internal Audit Alison Pingelski. The authority welcomes the report by the Law Revision Commission and finds its conclusions instructive and useful, Crowley's e-mail also states. He said it looks forward to working with the LRC, the DOB, and the Legislature to continue addressing the serious problems outlined in the report.
