Counties should govern
liquor commissions


A state House committee is considering legislation that would give counties more authority to manage their liquor commissions.

CORRUPTION has plagued the city Liquor Commission for more than two decades, usually centered on extortion of the liquor establishments that it regulates. The continuing problems have made it clear that the commission needs closer oversight, but that will come only with statutory authority of the city to provide that governance.

City Councilman Charles Djou and state Sen. Les Ihara explain that the state law creating the county liquor commissions fails to give the counties authority to manage them. The state exerts no authority over the commissions, leaving each one accountable only to itself.

The problem became apparent with allegations of extortion in the early 1980s. Later in that decade, the city conducted a 13-month investigation of the commission's staff. The probe resulted in little if any lasting remedial action.

"We documented repeated incidents of money laundering, extortion, racketeering and bribery by liquor inspectors and their supervisors," according to Linda Smith, a former city finance director who worked on the 1988-89 investigation. In a letter to the Star-Bulletin, Smith wrote, "The Liquor Commission situation requires a thorough revamping of the liquor laws and a mayor who will correct corruption as soon as it is uncovered."

Smith's letter followed the May 2002 federal indictment of eight of the commission's 11 night-shift inspectors on charges of public corruption. Five of those indicted have pleaded guilty, and the other three are scheduled for trial on March 30.

One of the three honest inspectors, Charles Wiggins, wore a hidden tape recorder for nearly three months to gather evidence for the FBI. He later received $387,500 from the city in compensation for retaliation within the commission for his assistance to authorities. Another former liquor investigator, Kerry Shannon, filed a similar whistle-blower lawsuit against the city last month.

U.S. Attorney Ed Kubo said the indictment "represents how out of control a system can get when left unnoticed, unmonitored with no checks and balances." Djou and Ihara say the lack of monitoring is due not to overt neglect by the city, but to a flawed state law that created the county liquor commissions but failed to give the counties the power to govern them.

County councils and Governor Lingle support legislation scheduled for hearing tomorrow by the House Judiciary Committee that would give the counties oversight responsibility of the commissions and the power to enact ordinances that are more stringent than state liquor laws.

Commission officials say oversight already is exercised. However, more authority is needed to provide enough oversight to end the corruption that seems to have become ingrained in the Hono-lulu Liquor Commission.



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