Right off the bat, watchdog lawyer Rebecca Lundberg Witt noticed some striking differences with the new Baltimore Liquor Board, meeting for the first time under leadership installed by Gov. Larry Hogan.
What is the staff’s recommendation?” Liquor Board Chairman Benjamin A. Neil asked with each case.
“Approval,” said Executive Secretary Michelle Bailey-Hedgepeth.
And each time that’s what the board voted to do, unanimously, with all seven of the cases before them. “Yes.” “Yes.” “Yes.”
There was no discussion of the law or how it specifically applied to the matter at hand.
“I did not hear any of the three commissioners refer to or cite Article 2B. They just voted ‘yes’ on everything. They didn’t go over any of the factors that they need to consider for the different types of hearings,” Witt said.
She noted that specific criteria are required for approval of the matters that came before them – transfers of ownership, new licenses and transfers of location for various types of licenses.
Acting based primarily on the staff’s recommendation is a new practice that does not appear to violate the law, Witt said, but is “very troubling.”
“It runs the risk of the commissioners abdicating their responsibilities to consider the facts of each case and to apply the relevant case law and statutes to each situation,” she wrote, in her Booze News blog post on the board’s first meeting with Hogan’s two new commissioners, Neil and Douglas H. Trotter.
The job of the Liquor Board staff, she said, is to evaluate whether an application is complete, not to tell the Board whether an application should be approved.
Lawyer Signing as Character Witness
The new board’s first meeting would have wrapped up even more quickly if not for the hearty words of welcome and flowery compliments offered to the new commissioners by liquor lawyers and licensees.
Attorney Frank Shaulis addressed Chairman Neil as “Your Honor.” Neil replied that he was not a judge, adding, “I don’t think I’ll ever be an ‘honor.’”
“Congratulations!” said Will Bauer (aka Hampden man-about-town Lou Catelli), pumping Trotter’s and Neil’s hands after adjournment.
Writing it all up later, Witt noticed some other irregularities as the panel, which included incumbent Commissioner Harvey E. Jones, took up a modest docket of cases.
(As an attorney for the Community Law Center, Witt has been observing and blogging about the board for more than a year, checking to see if it is correcting the multiple problems contained in a scathing 2013 audit of the agency and three-member panel. Poor recordkeeping, incomplete applications and inconsistent treatment of licensees are among the problems identified.)
For starters on Thursday, there was the license transfer application for Abbey Burger Bistro represented by former liquor board chairman, Stephan W. Fogleman.
The signatures of three character witnesses are required and one of them, in this application was Fogleman’s, contrary to Maryland Rules of Professional Conduct, Witt observed.
“The attorney is putting himself in the position of an inherent irreconcilable conflict of interest,” Witt wrote.
In the application for an ownership transfer for Canton’s Of Love & Regret, Witt found another flaw in the application, an inconsistency.
“The form asks, ‘Is there anyone else who has a financial interest in this license or the business to be conducted under it?’” Witt said.
But she noticed the applicant “checked ‘no,’ even though the application states later that she co-owns the business with Brian Strumke (50-50).”
Meanwhile the application to transfer ownership for The Pub at 1513, trading as McHenry’s Pub at 1513 McHenry Street, was chock full of problems, according to Witt:
The attorney, Melvin J. Kodenski ‘said that his clients, the applicants, have been running the business for three months. This practice is in violation of Liquor Board Rule 3.01, which states that ‘[e]very licensee shall be the actual owner and operator of the business conducted on the licensed premises.’
Also, the transferor was not present at the hearing, which is in violation of Administrative Rule #2, promulgated by the previous Chairman, Thomas Ward. It’s unclear what Kodenski and Bailey-Hedgepeth meant by the application being complete ‘subject to the checklist,’ since all applications must be complete (and documents posted online) 14 days before a hearing under Article 2B section 10-202(a)(4)(v)(2).
The signatures for the three character witnesses appear to be written and signed in the same handwriting.
With the application for Latin Taste in Little Italy, Fogleman again signed his own name as a character witness, Witt said, noting still other problems:
Pecuniary Interest: Article 2B section 10-103(b)(10) states that an application must contain a statement that an applicant “has a pecuniary interest in the business to be conducted under said license.” In this case, the Baltimore City resident applicant has no pecuniary interest in the business; therefore, the application is insufficient.
Article 2B section 9-101(c) requires that the applicants for a license on behalf of a limited liability corporation (LLC) be “authorized persons.” There is no indication in the application that the Baltimore City resident applicant in this case is an “authorized person,” which is defined in the Maryland Code of Corporations and Associations section 4A-101(c). He owns no stock and is not mentioned in any corporate documents.”
At the end of the hearing, Witt noted, came a housekeeping announcement:
Chairman Neil stated that future hearings would consist of a consent docket at the beginning of the afternoon, with all other hearings to follow, and the hearings will begin at 1 p.m. instead of 11 a.m.