Agents: ABC board, liquor company broke N.C. law

ALE says Mecklenburg officials illegally accepted $9,334 holiday dinner. Other meals are detailed in report.

State Alcohol Law Enforcement agents said Tuesday the Mecklenburg County ABC Board and liquor company Diageo broke state laws at a holiday dinner for the board where guests sipped Dom Perignon and the company picked up the officials' $9,334 tab.

The report also details several other meals for Mecklenburg board members or employees paid for by liquor companies. One distiller treated board Chair Parks Helms and CEO Calvin McDougal to lunch at the Ritz Carlton the day before the Nov. 18 dinner at Del Frisco's steakhouse.

At Del Frisco's, attendees dined on lobster, steak and crabcakes, according to the report.

The $12,700 bill, which also covered a handful of liquor industry representatives, included $1,000 for Dom Perignon Brut 1998 champagne, $820 for Crown Royal, $599 for Don Julio tequila and nearly $1,800 for wine.

A Diageo official told investigators he has treated employees of other local ABC boards from Asheville to Wilmington.

Agents accused the Mecklenburg board of accepting illegal gifts and Diageo and its marketing director with providing the gifts and unlawfully entering an ABC store for reasons other than business. All are civil offenses.

Helms said last month that he and other top staff paid back the cost of the meal.

"I'm just going to wait until the (state ABC) commission meets and see where they come down," Helms said Tuesday. "I'm doing the best I know how to do what I was called upon to do."

McDougal said he has no comment "until the board takes it up."

But some county commissioners were quick to respond.

"It is troubling to me that the ABC commission has found that there have been violations of their own rules," said Republican Neil Cooksey. "I don't think that the whole incident ... kind of passes the smell test as to how the local ABC board and its members should act."

Commissioners' chair Jennifer Roberts, a Democrat, said she also is "troubled" by the report, but wants to hear the ABC board's response.

ALE is accusing Diageo or its representative of 28 civil violations, each with a maximum financial penalty of $5,000.

Since Diageo holds an ABC permit, the process for handling their alleged violations is straightforward. The Mecklenburg Board, however, is a public agency that answers to the county commission. Attorneys for the state ABC Commission are reviewing the alleged board violations and how to address them.

State ABC Commission chair Jon Williams ordered the investigation in November. The commission adjudicates allegations of liquor law violations.

Last month, Helms said letting Diageo pay for the November dinner was a mistake. He repaid $1,000. McDougal repaid $4,000. Both men covered the tab for ABC employees for whom repayment would be a hardship. Others had to repay $330 each.

There were 28 employees and spouses at the dinner at Del Frisco's steakhouse, first reported by Observer news partner WCNC.

McDougal and Helms, a Democrat who previously chaired the county commission, have said the state commission has previously left it up to local boards to decide whether to accept gifts from distillers.

A 1996 memo from the state commission offers unclear guidance, highlighting the state law banning gifts but then saying local boards can decide whether to accept them. A 2003 memo offers additional direction, limiting acceptance of entertainment to conventions but still referring to the earlier document.

The Mecklenburg board did more than $11 million worth of business with Diageo last year. One board employee told investigators Diageo products are probably the top sellers in Mecklenburg.

McDougal told investigators other liquor suppliers and brokers have hosted similar events, although on a smaller scale. The day before the Diageo dinner, he and Helms were lunch guests of the president of Maker's Mark Bourbon distillery at the Ritz-Carlton.

"That was not an unusual practice," McDougal told the Observer, but one that "happened on an infrequent basis."

Helms said he has no plans to repay the Nov. 17 lunch at the Ritz.

Few of the events were as elaborate as the Diageo dinner.

Helms told ALE investigators that Del Frisco's is "the finest restaurant in town." He said he only eats there when somebody else pays.

According to the ALE report, Andy Iredale, Diageo's N.C. market director, called Del Frisco's before the November dinner to ensure that his company's products would be available.

Iredale told investigators that he has bought meals for other local board employees in Asheville, Lenoir, Greensboro, Winston-Salem as well as those in Carteret, New Hanover and Onslow counties. He said he offered to treat Craig Pleasants, general manager of Wake County's ABC Board, to meals but was refused.

Kevin Helms, no relation to the board chair, is a warehouse manager for the ABC Board. He said Diageo's Iredale paid for "five to six" business-related lunches for him and McDougal in the past three years.

Cooksey, the county commissioner, said he plans to ask commissioners to discuss the ABC board to determine whether commissioners should take further action.