Massachusetts Alcoholic Beverage Licensing Blog

A former inspector for the Massachusetts Alcoholic Beverages Control Commission (ABC) pleaded guilty last week to extortion charges and received jail time for using his position of authority to extort money from an Everett business under his jurisdiction.

Arthur Hitchman, 41, of Melrose, pleaded guilty on Wednesday, Jan. 11th, in Middlesex Superior Court to charges of Attempted Extortion, Soliciting and Accepting a Corrupt Gift to Influence an Official Act, Solicitation to Commit the Receiving of Stolen Property, and Improper Storage of a Firearm (two counts).

Middlesex Superior Court Judge Kathe Tuttman sentenced the defendant to two and one half years in the House of Correction on the attempted extortion charge and two years probation from and after on the additional charges.

The Everett Independent reports that according to authorities, the defendant contacted an individual who wanted to open a restaurant in Everett. Hitchman, who had knowledge of the prospective business owner's prior criminal conviction, indicated that because of that history the man might not be approved to receive a liquor license. However, Hitchman told the prospective business owner that he could secure approval for him if the man paid him $3,000 in cash.

On May 18, 2010, an undercover State Trooper, posing as a family member of the restaurant owner, met the defendant, confirmed the terms of his demand, and paid him $3,000 in cash.

The defendant allegedly accepted the money and told the trooper he would help secure approval of the license.

The investigation by Massachusetts State Police Special Service Section, Massachusetts State Police assigned to the Middlesex District Attorney's Office, as well as attorneys from the Middlesex District Attorney's PACT Unit, resulted in numerous conversations between Hitchman and the undercover trooper.

In these conversations, the defendant admitted that he had made changes to the affidavit filed by the restaurant owner in order to ensure the license would be approved by the ABCC, reports the Everett Independent.

Additionally, in the course of these conversations, the defendant, unprompted, offered to sell the undercover State Trooper illegal video poker machines worth more than one thousand dollars each, and suggested that the undercover State Trooper could use them to generate illegal revenues at the restaurant.

On July 13, 2010, a search warrant was executed at the defendant's residence in Melrose and, during the search, State Troopers recovered two 9mm semi-automatic pistols, one of which was loaded. Neither pistol was secured in a locked container or had a safety device of any kind.

Hitchman was arrested and arraigned that afternoon in Malden District Court where he was held on $3,000 cash bail with the conditions that he is to have no firearms and must stay away from the victim.

The Newburyport News reports on a messy situation in Rowley, where a pub owner has filed an appeal with the state Alcoholic Beverage Control Commission stemming from the confusing actions by the town, first denying of a liquor license, then later rescinded that denial.

The Senate has approved and sent to the House a bill that would allow supermarkets and other large retailers to hold more alcoholic beverage licenses. The proposal increases the current cap of three to five in 2012, seven in 2016 and nine in 2020. The measure also would require stores to pay a $5,000 fee for every license they receive above three.

The bill is considered a compromise between opposing sides of a possible 2012 ballot question that would allow local cities and towns to permit grocery stores to sell beer and wine. The ballot question is being pushed by the grocery store lobby, and opposed by the liquor store lobby.

In 2006, voters rejected by a 53-41 margin a similar ballot question that would allow local cities and towns to permit grocery stores to sell beer and wine. Proponents had argued that 34 other states allow this and argued it would end a monopoly and save consumers millions of dollars by fostering more competition. Opponents said the measure would increase underage teens' access to liquor and lead to a hike in drinking-related problems and drunken driving accidents and deaths.

The Boston Globe reports here on the $45,000 in funds accepted by Treasurer Steven Grossman (who oversees the ABCC), donated by package store proprietors, bar owners, and liquor distributors -- industries his office heavily controls and regulates.

Interesting piece from Boston Magazine's website about the number of liquor licenses available in Boston and other communities, and whether these limitations still make sense.

Kathleen P. McNally, an attorney with extensive experience in state liquor law cases, has been named by Treasurer Steven Grossman to the three-member Alcoholic Beverages Control Commission, which oversees liquor licensing activity in Massachusetts.

McNally joins ABCC Chair Kim S. Gainsboro and Associate Commissioner Susan Corcoran. McNally, of South Boston, replaces Robert Cronin and will begin her new duties Oct. 7.

According to Grossman, McNally has appeared before the ABCC dozens of times and in liquor law cases before the Appeals Court and Superior Court. She worked as executive secretary and general counsel for the Boston Licensing Board from 1997 to 2002.

The ABCC oversees more than 22,000 liquor licenses throughout the Commonwealth.

The Eagle Tribune reports that the state ABCC will team up with Lawrence police to sweep through city bars and clubs for five or six weeks beginning this weekend, in a coordinated effort "to rein in the wave of lawlessness that's taking place in Lawrence," state Treasurer Steven Grossman said.

Grossman's announcement that ABCC agents will be a presence in Lawrence bars and clubs through September is a significant ratcheting up of attention by the agency, which some local officials say has been part of the problem in Lawrence because it is too quick to overturn disciplinary decisions by the city's Licensing Board.

The Taunton Daily Gazette has a story on how the Taunton Police are getting tougher with sting operations and are on the hunt for liquor license violations and underage drinking. The state's Executive Office of Public Safety and Security has awarded a $9,700 grant to the Taunton Police Department specifically to combat underage drinking.

Alcohol regulators in Massachusetts are wisely pulling back from a potential rules change that had small beer brewers across the state fuming.

The change approved last week by the state Alcoholic Beverages Control Commission would have required brewers operating under a so-called farmer-brewery license to grow at least half the hops and grains they use, or get them from a domestic source.

Regulators at the state ABCC said the change was designed in part to promote farming in Massachusetts.

Brewers protested, saying the change could harm their businesses or even force some of them to close.

Massachusetts Treasurer Steven Grossman announced Monday that the ABCC had decided to eliminate the rules change. Grossman said the commission would instead hold a series of public hearings to solicit comment from the public and brewers. Brewers welcomed the reversal.

The Massachusetts Alcoholic Beverages Control Commission (ABCC) has denied the Idle Hands Craft Ales LLC application for a Farmer-Brewery license, because a farmer-brewer must "grow at least 50 percent, in the aggregate, of the quantity of cereal grains and hops needed to produce the anticipated volume of malt beverages."

According to beeradvocate.com, this decision seems to re-define the parameters for the farmer-brewer license, a type of license that a vast majority of production breweries in the state hold. The ABCC explicitly stated in the Idle Hands decision that, "the industry is put on notice that the Commission will be applying this ruling prospectively and, specifically, during the next annual renewal cycle to ensure that every applicant for a farmer-brewer license meets the state law definition of farmer-brewer by growing at least 50 percent..."

Given the ABCC's statement, all farmer-brewery licenses will likely come under the same scrutiny during the renewal time period (effective fall 2011 for 2012 licenses). No brewery will be grandfathered in.

A decision by the ABCC to force our farm to grow and malt grain will put our farm, and any farmer in the Commonwealth, out of the farm-brewing business," Bill Russell of Just Beer @ Buzzards Bay Brewing in Westport, MA, told beeradvocate.com.

What this means is that at least 50 percent of beer-making ingredients must be grown in Massachusetts. That would disqualify nearly every brewery in the state.

If Massachusetts state breweries are unable to meet the 50 percent mark of the Farmer-Brewery license, they will need to apply for the only alternative, a Manufacturer of Wine and Malt Beverages License. The Manufacturer license, however, does not allow breweries to sell beer at retail or do any tastings on site - one of the unique draws of the craft beer market.

It also forces breweries to utilize wholesale distribution channels which will result in potentially lower margins for the brewery (or higher costs to the consumer) and limited product distribution.

In addition, the farmer-brewery licenses are less expensive and less cumbersome to obtain than a full manufacturer license.

Another story on this topic

Continue reading "ABCC Changes Tone on Farmer-Brewery Licenses" »

State Treasurer Steve Grossman, who oversees the ABCC, said he asked the state inspector general to conduct a "top-to-bottom" review of the agency.

The Boston Globe first reported the story. Legislative leaders expressed concern this week, following the Globe report that the state's Alcoholic Beverage Control Commission paid out $1.7 million to resolve three employment disputes.

In one case, according to public records and legal documents cited by The Globe, the agency said it turned down a job applicant because two available slots had to go to relatives of lawmakers, or the Legislature would not fund the positions.

House Speaker Robert DeLeo called the report "disturbing" and said Monday he'd never heard of the Legislature holding up funds for an agency unless it made patronage hires.

"That just doesn't happen," said DeLeo, who chaired the budget-writing House Ways and Means Committee before becoming speaker.

Senate President Therese Murray said she wanted an explanation as to why the agency agreed to the settlements.

"I would like to know why a case like that was settled, and we paid money for them to give that kind of an answer or to use that kind of excuse for not hiring somebody," Murray said.

The ABCC has an annual budget of about $2 million and regulates the sale of liquor at package stores, restaurants and bars.

The Fire Bull Restaurant in Peabody received Licensing Board approval and now only needs approval from state liquor licensing authorities to serve a full bar at 5 Central St. instead of only beer and wine.

Alfred D. Rizzo, the manager at Fire Bull, appeared before the city's Licensing Board Monday night for a hearing on the restaurant's application for one of four new full liquor licenses the city is now authorized for thanks to the results of the 2010 U.S. Census.

The new beer and wine license Peabody received under the census was approved Monday night for China Corner, which is located at 9 Peabody Sq. The Chinese restaurant opened under new ownership in 2010.

See the attached link for the ABCC information on the farmers' market wine application; this license is governed by local authorities only and does not need ABCC approval.

http://www.mass.gov/abcc/pdf/6-9-11%20Advisory%20for%20Farmer%20Market%20License.pdf

The Salem News reports that Danvers Selectmen have revoked the liquor license of the former Tequilas Bar and Grill on Route 1, the first time in 2 1/2 years the board voted to strip a license from a holder whose establishment had closed.

Danversbank now has the Tequilas all-alcoholic-beverages license because it was pledged as collateral on a loan that its former holders failed to pay.

The bank has 14 days to appeal the revocation to the state Alcoholic Beverages Control Commission, Town Clerk Joseph Collins told the Salem News.

It may be Danversbank will let the license revert back to the town without a fight. No one from Danversbank appeared before selectmen at the public hearing.

The license may have sold for $80,000, but then the new owner would have had to pay just as much in outstanding liens against it. Town officials are trying to figure out if the license will revert back free and clear of any liens.

The Worcester Telegram and Gazette had a good piece about a March scuffle outside of JR's Pub in Fitchburg, MA, and how the state's Alcoholic Beverages Control Commission is investigating the validity of the liquor license held by JR's.

The liquor license was initially awarded to JR's Inc., at 18 Putnam St. However, according to the secretary of state's office, JR's Inc. was dissolved in 1998.