NC panel fines liquor company $6,000 for dinner

By GARY D. ROBERTSON

RALEIGH, N.C.

North Carolina's top alcohol regulators fined a liquor company $6,000 on Thursday following allegations it violated a gift ban when a company employee treated Mecklenburg County ABC board employees and leaders to an extravagant dinner in November.

The state Alcoholic Beverage Control Commission approved unanimously the compromise with Diageo North America, which said it accepted the settlement without admitting wrongdoing.

The company treated the Mecklenburg County board chairman, the board's chief executive officer, and nearly 30 employees, spouses and others to a dinner that ultimately cost $12,700 with the tip. According to the restaurant receipt, the group feasted on lobster, crab cakes and steak, drank Crown Royal and Dom Perignon, and had creme brulee for dessert.

The state ABC Commission originally accused the Mecklenburg board, Diageo and marketing director Andy Iredale of breaking a state law prohibiting gifts of anything of value.

The local board repaid the company more than $9,000, and Mecklenburg chairman Parks Helms and CEO Calvin McDougal have since resigned -- proof that the "local board has been held accountable," state commission Chairman Jon Williams said. An investigation and interviews show that local ABC senior management requested the dinner, the state commission said in a news release.

Two fines of $3,000 each paid by Diageo "demonstrate the commission's commitment to hold the distiller appropriately accountable for their shared responsibility in this unauthorized event," Williams said.

The penalties came the same day the General Assembly announced the formation of a study committee to examine potential ABC reforms -- a panel brought on by reports of the Nov. 18 meal and that New Hanover County's father-and-son store administrators got paid more than $400,000 combined.

The committee, among other things, will examine whether it makes sense to leave liquor sales solely to local ABC stores or to shift sales to private operators. The panel is supposed to make recommendations in time for the General Assembly when it reconvenes in May.

"Our ABC system needs to evolve just like any other business," House Speaker Joe Hackney, D-Orange, said in a release. "We need to determine how best to make these changes and bring our system in line with modern-day standards of ethics and transparency."

In a letter dated Wednesday, a lawyer for Diageo said the distiller had complied with ABC rules and policies, including a 1997 memorandum that provided a gift ban exemption for business meals. Since the Mecklenburg ABC Board's law enforcement director attended the dinner, "Diageo was confident the business dinner fully complied with the law," attorney Keith Kapp wrote to state ABC officials.

But state officials said the business meal exemption involved beer and wine wholesalers and didn't apply to the event at Del Frisco's Double Eagle Steakhouse, which McDougal told a state Alcohol Law Enforcement agent was a "holiday appreciation dinner" that he invited board staff members to attend. Iredale didn't immediately return a phone call seeking comment.

Diageo and an affiliate of whiskey distiller Jim Beam have since provided expense receipts for other meals they bought for staff of several other local ABC boards. The state commission is still reviewing receipts for entertainment of more than $100, while those for lesser amounts have been referred to the local boards.

Williams last month decried what he called a "culture of entitlement" at some local liquor boards. With support from Gov. Beverly Perdue, the commission urged local boards to adopt ethics policies similar to Perdue's policy for state employees that ban gifts and meals.

Perdue also has a government-efficiency commission examining the ABC system.