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October 2, 2009

Report: NY State Liquor Authority inadequate

By VALERIE BAUMAN

ALBANY, N.Y. (AP) — New York's State Liquor Authority is understaffed, vulnerable to corruption, and has suffocated small businesses around the state because of its inadequacies and licensing delays, according to a state report issued this week.

The state Law Revision Commission said the authority also has been weak in protecting public safety through the Alcohol Beverage Control Law, including efforts to keep alcohol away from underage drinkers.

The agency is responsible for reviewing applications and issuing licenses for bars and restaurants in the state.

The report notes the authority has new leadership — just in the past two months — and is inheriting problems that have existed for years.

"There are a lot of criticisms in the report that are absolutely justified, but the administration is taking steps to address them," said Dennis Rosen, the agency's new chairman. He noted that the agency has hired people for internal auditing and other oversight purposes and has been talking with the industry about how to improve the licensing process.

The report said the new administration has a "Herculean" task ahead of it.

A backlog of licenses has led to corruption and a system where a so-called "expediter" charges businesses a fee to push through applications more quickly, but often fail to even submit them, the report said. The agency has more than 3,000 pending applications dating back to late 2008.

Earlier this year, investigators from the New York Inspector General's office raided a Liquor Authority office in Harlem. Officials said business owners complained that state employees at the office were accepting bribes to expedite licenses. Investigators said that despite a lag time of six to eight months to process applications, some licenses were awarded in only 11 days.

A New York County grand jury is in the process of a criminal investigation of Liquor Authority licensing examiners. The inquiry is expected to be completed by the end of this month.

According to the report, some business owners spend months paying rent and other overhead for shuttered businesses while waiting for a liquor license.

"Small business owners, and some large ones as well, are forced to suffer ever-mounting expenses for months on end because of these delays," the report said. "Moreover, they are reluctant to start new construction or remodeling, negatively affecting the community's economy. The people ordinarily hired — the construction crew, the plumbers, the carpenters, the electricians, the computer and communications technicians — cannot be put to work."

The report also said the agency has failed to protect public health and safety and is unable to prioritize the prevention of underage drinking. The commission noted a lack of regular onsite inspections, inconsistent enforcement procedures and a lack of oversight of businesses that receive liquor license.

The report made a number of recommendations, including hiring more people, better technology, greater oversight and more funding.

In his new role at the head of the agency, Rosen said he's made those changes a priority.

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