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Mobtown Beat

Audit Slams Liquor Board

Scathing report finds disarray, inspections of defunct bars

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Apologies to Dr. Suess and the Residents of Baltimore


For the first time ever, the state Office of Legislative Audits dropped a heavy and critical performance audit on the Board of Liquor License Commissioners (BLLC), the Baltimore-based state agency that polices the bars and liquor stores in the city.

Among the March 28 findings: The liquor board has no written policies and procedures for its inspectors. It also has two or three times the number of inspectors that it needs. It does not monitor these inspectors’ activities or work habits. (One part-time inspector reportedly turned in 24 inspections of 15 establishments that were defunct. “[T]his inspector completed the Part-Time Inspector’s Reports indicating the licensees met the required inspection attributes,” the auditors drolly noted, “and did not note that the establishments were closed.”)

The board has not collected the fines it should have or the license payments. It failed to check to make sure license-seekers had the requisite trader’s licenses or had paid their taxes. It did not always document that the required criminal background checks on license applicants were done.

There was a notary public in the office who would notarize stuff for applicants without verifying their identity.

The audit goes on like this for 91 pages: “Finally, the audit disclosed that BLLC did not properly document the investigation and resolution of inspections performed as a result of complaints registered through the City’s 311 Customer Service Request System. Our test of complaint investigations found that BLLC often did not document the investigation results and the disposition or resolution of the complaints. For example, of 118 complaints tested from the months of May 2011 and February 2012, 59 complaints had no documentation of any investigative efforts undertaken as of May 2012.”

Lots of people who have made complaints via 311 about the strip club next door will say “AHA! I knew it!” And, indeed, in the report, auditors say liquor-board employees told them they pencil-whipped complaints “because inspectors were not investigating complaints timely and it did not want this to reflect poorly on BLLC in the City’s 311 statistics.”

But those statistics are not accurate, says Samuel Daniels, former chief inspector who is now the board’s executive secretary and boss of day-to-day activities.

“The failure was not in responding to complaints,” Daniels says. “The failure was in the information about the response, the data entry, by the manager” of the city’s 311 system.

The audit came in response to 2011 legislation. State auditors noted that the city Department of Audits wrote a report in 2007 with nine findings. “We included the report’s findings and a synopsis of BLLC’s response as Exhibit 1 in this report,” the state auditors wrote, “and found that many of the conditions noted in the City’s audit report continued to exist.”

The audit is mostly right, Daniels says. But because state auditors have never before audited the liquor board, they are not familiar with all the nuances of the board’s and inspectors’ work.

“The only one thing flawed in the audit—and I think this is substantive—is format of presentation,” Daniels says. State audits list their findings one by one before the agency’s responses. It’s no big deal in the typical 20-page audit, but in a 90-pager the game changes. “In this case, I bet very few people read through 60 pages and then looked through what we responded to with a careful and considerate eye,” Daniels says. “It’s a human-nature thing—the longer you have to assume something, the longer it takes to dispel the assumption.

“Dangerous inferences evolve from those implications,” he adds.

Still, several of the liquor board’s responses brought rejoinders from the auditors. For example, the audit found that none of the inspectors have done the minimum four inspections per day, as required by the liquor board’s own policy. Two inspectors did 41 inspections all year, and the busiest one did 512—still 41 percent fewer than he would have done at four-per-day. The auditors concluded that only six full-time inspectors were needed—not the 14 the board had. But the liquor board responded by saying that the job had changed.

In a footnote, the auditors responded: “The calculation of inspectors needed is based on BLLC’s own written guidance, which states that ‘each full-time inspector shall complete four routine inspections per day irrespective of other performed agency stops,’ and BLLC’s reported intention to conduct 4,700 to 4,900 inspections per year. We did not include in our calculation the inspectors who primarily perform investigations.”

Daniels, who says the four-per-day metric was his invention, claims it is a minimum requirement but hardly adequate for an inspector. But inspections are not all an inspector does—or even the most important thing: “In the late ’80s, inspections started becoming more incidental to responses to complaints, and investigations,” he says. “People don’t care if your lettering on your door is two inches high. People care about how your establishment impacts the environment.”

Daniels says he doesn’t know about the part-time inspector who inspected defunct bars. “Those are patronage positions,” he says, expressing some frustration still about a legislative increase in the number of $3,600-a-year part-timers the liquor board must employ. “I remember saying to the legislatures at the time, ‘We need young folks . . . to do our own stings.’ We don’t want to hire your grandparents, we want to hire your grandkids. So what do we get? Twelve grandparents.”

The biggest disagreement between the board and the auditors was about dormant licenses. The law requires that a liquor license go unused for a year be destroyed, and citizen activists often push to have licenses terminated.

Activists are always disappointed, as the board routinely grants hardship extensions. The auditors found one license that was kept alive for 706 days. The audit recommended the board follow the law. The liquor board said, well, no.

“Here again is the matter of interpretation clashing with the principle of discretion,” the liquor board wrote in its response. “The Board disagrees with the premise of this recommendation, and shall continue to rely upon balanced judgment, case law and appellate review, until instructed to do otherwise by an appropriate legal authority.”

Daniels makes plain where the liquor board’s policy allegiance lies. “You kill a license, it never can come back,” he says. “There is a finite number of licenses (except for restaurant licenses). So we take the killing of a license very seriously. It’s a fiscal thing too—license dead, no revenue.”

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