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A FIXER TAKES OVER UNDER HOWARD ADAMS, ARIZONA'S LIQUOR DEPARTMENT HAS BECOME USER-FRIENDLY

Arizona liquor czar Howard Adams is under attack from his own people.
They are concerned that the kind of politicking and deal cutting that led the Arizona Republic to dub Adams the "Mr. Inside" of Phoenix City Council in the late Eighties does not translate well to the field of liquor-law enforcement.

Adams took over the Department of Liquor Licenses and Control (DLLC) from Mark Mazzie earlier this year. The result, critics say, is that liquor laws are not being enforced, political favors are being handed out like so many glasses of champagne and investigators are being told to look the other way.

Disgruntled employees? Perhaps. But even from this forgiving viewpoint, it is hard to explain Adams' behavior in the case of a nightclub called Ziegfield's that wants to set up shop in east Phoenix.

A bar that intends to feature nearly naked women, Ziegfield's has aroused suspicions of hidden ownership involving a family whose members are already facing allegations of prostitution, drug charges and six-figure law enforcement fines in another state.

Short of doing absolutely nothing at all, it is difficult to imagine Adams doing less than he has in the Ziegfield's matter.

One former DLLC employee, who was fired by Adams last spring, says, "Howard Adams is refusing to be an enforcement-oriented director. The consequence of that is not going to be a kinder, gentler director. The consequence is going to be, people are going to die. Underage persons are going to be served that shouldn't be, drunks are going to drive cars and there are going to be dead bodies."

@rule:
@body:Howard Adams is at the zenith of his political career.
The power he held for years as a state legislator and Phoenix city councilmember was significant, but shared. As regulator of an industry that generates $140 million for the state in tax revenues each year, Adams has the authority to make or break businesses and to set policy.

The agency is run almost exclusively by Adams, not by its board, and it is largely ignored by the Arizona State Legislature and Governor Fife Symington, who appointed Adams to the post last January.

Adams says he became liquor czar because of his experience in law enforcement. He cites his longtime support of emergency medical technology, in particular, and his stint as head of the Governor's Office of Highway Safety.

Perhaps a more important qualification was his experience as a deal maker. In his days on the city council, Adams' foes referred to him as "High-rise Howard." His support was almost always available for large-scale developments. One of those projects was Symington's ill-fated Camelback Esplanade.

Now employees at the Department of Liquor Licenses and Control--who are furious, they say, because Adams has called a stop to his predecessors' hard-nosed stance on enforcement--call their new boss "Howard the Coward." They insist that he's politicizing the department. Many say they are looking for new jobs.

After being told of recent DLLC cases outlined in this story, state Senator Chuck Blanchard, a member of the Commerce and Economic Committee, which oversees the state agency, says, "It appears there's this pendulum swing in the liquor department going from very zealous--some would say overzealous--regulation to very lax regulation, and the problem is we need to find the right place in the middle."

In the meantime, Howard Adams is running the show.
@rule:
@body:It's been a while since he's had a show to run. In early 1990, it appeared the top job in the city was Adams' for the taking, as Terry Goddard prepared to step down as Phoenix mayor to run for governor. But relative novice Paul Johnson beat Adams at the older man's favorite game: Johnson lined up votes on the sly and, in the end, Adams--realizing he wasn't assured of the win--was the one who nominated Johnson for mayor.

Adams resigned from the city council shortly thereafter. He tried to nab an appointment to a vacant justice of the peace seat, then spent his city council war chest to run for the seat when he didn't get the appointment. Adams lost the Republican primary to Stephen Smith, a longtime constable who criticized his opponent for seeking the justice seat because of its $56,000 annual salary.

Rose Mofford eventually offered Adams the job of director of the Governor's Office of Highway Safety--an inauspicious post.

Then, in December 1992, Adams received a call from Fife Symington.
Now Adams is sitting in his office, beneath a portrait of his boss, talking about his new job at the state liquor department.

Adams is a genteel man with a thick, salt-and-pepper mustache, so soft-spoken that one finds it useful to lean forward to catch the end of his sentences.

 

His olive eyes veer somewhere off to the left of the questioner's gaze, especially when the questions involve specific cases handled by the liquor department. He'd much rather discuss the new computer system that will create a paperless environment and offer easy access to department files.

Adams protests that his door is always open to his staff, that subordinates are encouraged to share their views. He wants everyone to get along.

He hasn't slacked off on enforcement, he insists, but is taking a new approach. His point: Because the department is understaffed (fewer than a dozen investigators for 8,000 liquor licenses), only so much can be done. And furthermore, he says, most liquor licensees are good, hardworking people who don't deserve to be harassed.

Adams shared his philosophy at a meeting he convened on May 27. Present were Adams' deputy, the DLLC's investigators, representatives from Phoenix Police Department and the state Department of Public Safety, and two members of Arizona Licensed Beverage Association (ALBA), a lobbying group for liquor purveyors.

Some of the investigators present were miffed when Adams told them that they would no longer use criminal citations to enforce liquor law--that they would instead use civil means (fines and other penalties imposed directly by the DLLC). And they were annoyed when Adams told them they needed to take a friendlier approach in dealing with licensees.

But what really threw them was that Adams let the fox into the henhouse by inviting members of the liquor industry to a law enforcement meeting. No one could remember such an event ever having taken place.

Adding insult to injury was the fact that one of the invited liquor-industry members, ALBA president Lee Tilford, had recently received a warning for running small-scale gambling operations at his Yuma bar, the Stop Cocktails.

@rule:
@body:A former employee points out that the DLLC has suffered through six directors--who have tried to pull the department in at least six directions--in the past seven years.

"It's difficult to say [the department's] got the worst morale it's ever had, because we've had so many bad directors," the former employee says.

Even in its infancy, the department had its problems. John Duncan, the state's first liquor chief, passed out free bottles of liquor to legislators and state officials. From the days following Prohibition to the mid-Eighties, reports of inside deals, Mafia connections and other abuses of the system flowed from the department like beer from a keg.

Phil MacDonnell, a Harvard-educated lawyer, brought some credibility to the department in 1985. Appointed by then-governor Bruce Babbitt, MacDonnell cleared the backlog of pending cases, used both civil and criminal penalties to crack down on offenders and encouraged his employees to conduct background checks to reveal hidden ownerships.

MacDonnell was followed by a string of pro-law-enforcement types, including Evan Mecham appointees Alberto Rodriguez and Thad Curtis. Rodriguez--whose background included service in Douglas as a cop and allegations of assorted crimes (including murder)--was never confirmed by the state legislature. Curtis, another ex-cop, reportedly took little interest in his duties at the DLLC; he wanted to be director of the Department of Public Safety.

Rose Mofford brought in yet another ex-cop, 22-year Phoenix Police Department veteran Hugh Ennis. Ennis took time off from his burgeoning career as an international lottery consultant to head up the liquor department as a favor to his old friend, Mofford.

The move was a financial sacrifice, Ennis recalls, but he couldn't resist. At the time, he says, his wife remarked, "If they gave you two guns, you'd work for nothing!"

Indeed, under Ennis, the plan was to transform what Ennis saw as a somewhat sluggish DLLC investigative staff into a brave and unified army. Investigators were assigned military titles and required to carry guns. Ennis toughened the standards required for liquor investigators, bringing them in line with officers at law enforcement agencies in the state.

DLLC troops did battle, all right--without ever leaving headquarters. Critics remember that Ennis and his employees spent a great deal of time investigating each other--on topics ranging from allegations of poor hygiene (specifically, an investigator's purportedly purposeful flatulence) to name-calling (specifically, who called whom a "weenie").

To his credit, Ennis moved to revoke the license of a Phoenix bar called Club 902 after the press revealed that the bar had 127 police-incident reports--more than half of which involved drug arrests--on file at Phoenix Police Department. Phoenix police are responsible for sending all incident reports on bars to the DLLC. In this case, police had neglected to do so, and it was widely speculated that this was because Maricopa County Attorney Rick Romley had a financial interest in Club 902.

After characters like Duncan, Rodriguez and Ennis, it was hard to imagine there could be a more colorful director lurking in the wings.

 

Mark Mazzie no doubt surprised Governor Fife Symington, who only wanted Mazzie to be a mild-mannered administrator.

As a former Scottsdale city clerk, past president of Camelback Young Republicans and Symington campaign devotee, Mazzie was supposed to bring organization, stability and quality service to the department.

Instead, Mazzie launched fervent and often public investigations into potential and current liquor licensees. He conducted some of these investigations himself. Mazzie was criticized after he flew first-class (albeit only once, he says, and at a cost of an additional $15 to the state) to see if Delta Airlines flight attendants were serving liquor to drunken passengers.

Mazzie also took on license applicant Southern Wine and Spirits, Inc., a large, wholesale-liquor operation that allegedly had a history of violations in Florida. The license was ultimately approved by the liquor board, but the investigation got Mazzie into trouble.

The Attorney General's Office launched a perjury investigation regarding Mazzie's comments about the Southern Wine investigation. The office alleged that there were discrepancies between Mazzie's sworn testimony at a state liquor board hearing and in unsworn testimony in a witness interview.

The attorney general also noted discrepancies between unsworn statements made by Mazzie and sworn statements by MacDonnell (who now, as a private attorney, represents liquor interests that wanted to keep Southern out). Mazzie said that he received information about Southern Wine through an anonymous telephone tip. MacDonnell acknowledged that he was Mazzie's source regarding Southern Wine's alleged violations.

(The Attorney General's Office dropped the investigation, claiming that Mazzie would have perjured himself if his statements had been sworn at the time he made them.)

Observers claim that Mazzie would investigate his own mother if he thought she was violating liquor law. Mazzie insists, however, that he went for the bad guys. Indeed, Mazzie's investigators cracked down on a number of bars on West Van Buren that had histories of violations and lousy reputations among area residents.

One, Copa Cabana Cocktails, was slapped with thousands of dollars' worth of violations during Mazzie's reign.

A member of the liquor board, who spoke on the condition of anonymity, says, "Mazzie went after anybody. Everybody. . . . It picked up some of the real scum and dealt with some of that that hadn't been dealt with in a long time, and it also picked up some of the cream."

@rule:
@body:In the fall of 1992, there was no bigger fish in Phoenix's pond than America West Arena. With state-of-the-art facilities, innovative public art and concessions ranging from Whataburger to prime rib--not to mention Charles Barkley--the powers that be at the arena could do no wrong.

Mark Mazzie was concerned that liquor law was being violated. Mazzie says he assigned investigators to look into the arena last year after an off-duty DLLC investigator told him that while at an arena concert, the investigator "lost count of the number of kids he saw drinking there."

The investigators never did find evidence of underage drinking. But they did amass a number of charges, including lack of familiarity with liquor law, failure to allow DLLC investigators access to the premises for inspection, serving alcohol to an intoxicated person and failure to report fighting at the arena.

A DLLC hearing was scheduled for early 1993.
Then, sometime "over the Christmas holidays," Adams recalls, Symington called and offered him the position of DLLC director. Adams accepted.

"He gave me no instructions at all. He never did," Adams says.
But Howard Adams needs little instruction when it comes to playing politics. The Adams appointment was announced January 6, and Adams took office on January 15. Before he had even moved into his new quarters at Eighth Avenue and Washington, Adams arranged a meeting with arena officials.

After the meeting, Adams decided that a hearing into the America West Arena allegations was not necessary, because the arena employees were eager to comply with the law. "They don't want any trouble. They don't want, obviously, to have a bad name in this town, and they don't," he says.

After all, Adams points out, the arena is "one of the economic stimulators of downtown Phoenix."

The consent agreement hammered out between the DLLC and arena officials requires the licensee to train all employees who handle liquor; it must also produce a department-approved training film.

"We just wanted to make sure that they were well aware of liquor law and prepared for the future. . . . We figured we were pretty tough," Adams says.

But that consent agreement sent a much different message to people like Mark Barnett, whom Adams removed from his position as chief of investigations almost immediately upon Mazzie's departure. Barnett, who now works for Scottsdale Police Department, figures cases such as America West Arena's cost him his job at the DLLC.

 

"I think we ran crossways with some very strong downtown business interests who really don't particularly want to be called to account for certain statutes in the way Mr. and Mrs. Jones will be when they run a bar or liquor store somewhere," Barnett says.

Eyebrows that were raised in January by Adams' appointment shot up even higher in April, when it was revealed that four Phoenix Suns vice presidents and three of their spouses donated a total of $2,000 to a Symington campaign committee, all on the same day: December 18, close to the time that Symington offered Adams the DLLC position and booted Mazzie.

Symington spokesman Doug Cole did not return telephone calls from New Times.
Three of the Suns vice presidents, including Bob Machen, who is also the general manager of the arena, refused to comment.

Rich Dozer, the fourth Suns VP, says he doesn't recall the circumstances surrounding his decision to contribute $500 to Symington on December 18.

Could it have been because of Mark Mazzie's actions?
"It had nothing to do with anything like that at all," said Dozer.
@rule:

@body:Longtime Phoenix liquor attorney Jerry Lewkowitz believes that the America West Arena investigation might have cost Mazzie his job.

"I think the guy kept stabbing himself and he finally hit the jugular," Lewkowitz says.

As far as Lewkowitz is concerned, it couldn't have happened to a more deserving guy.

"The attitude that Mazzie had and a couple of his predecessors had was, I think, that 'liquor is Public Enemy No. 1 and I'm J. Edgar Hoover,'" says Lewkowitz, one of the best-known booze attorneys in Arizona. He's represented licensees from Bourbon Street Circus to Circle K Corporation.

He's pleased with the new director. Lewkowitz and Adams have a relationship that dates back to Adams' days on Phoenix City Council, when Lewkowitz represented liquor licensees before the council. The two men share the same philosophy regarding liquor enforcement: that 95 percent of licensees are hardworking and honest.

Lewkowitz readily admits that some of his clients fall into that other 5 percent. But that doesn't mean that the employees at the liquor department need to be meanspirited.

He's delighted, Lewkowitz says, with the changes at the DLLC in recent months.
So, last May, he dropped Adams a note saying, in part, "I did want you to know how much . . . everyone in our office appreciates the change at the department. It is refreshing to deal with all of you and I know it's your influence, Howard."

Adams circulated copies of the letter to his top staff.
Under Adams, the department might be user-friendly, but Lewkowitz sees no favoritism.

"If anything stands out in my mind about Howard about what he was doing then [on Phoenix City Council] and what he's doing now, it's consistency," Lewkowitz says. "He does not change his policy or cut the pattern to fit the cloth. If it's not good enough for Jones, it's not good enough for Smith."
Lewkowitz adds, "I consider myself persuasive, and, you know, an advocate, but I don't think--you know, there's no way I'm going to get away with anything."

But consider the case of one of Lewkowitz's current clients, Ziegfield's. According to preliminary designs and descriptions, Ziegfield's will be a nightclub featuring Las Vegas-style dancers and a dining atmosphere reminiscent of Houston's restaurant. Location: 5151 East Washington.

The club's future operators say that Ziegfield's will be upscale and that they are applying for an adult-entertainment license because the costumes worn by the dancers might be "skimpy or elaborate." The dancers will not, Ziegfield's operators have insisted under oath, be topless.

City of Phoenix and individual area business owners filed protests with the DLLC against Ziegfield's liquor-license application. These protests were based mainly on the grounds that Ziegfield's would be too close to Tovrea Castle, Phoenix Zoo and other cultural destination sites. The location, they argue, is an inappropriate spot for a nightclub featuring showgirls.

The city and public protests touched only briefly upon the qualifications--or lack thereof--of Cary Anderson, and the involvement of his father, Gregory "Jack" Anderson, who owns the land and building at which Ziegfield's would operate.

Cary Anderson, the proposed licensee, is 24. Except for some time as a bartender, he didn't have any experience in either the booze or nightclub businesses before he applied for the Ziegfield's liquor license.

His family, however, has been in the nightclub business in Kansas for many years. That's what worried Mark Mazzie's investigators, who set out last year to investigate the Anderson family's shady background and Cary Anderson's minimal qualifications, in order to determine whether Cary was qualified to hold a liquor license.

 

Investigator Ron Herman conducted the probe.
Herman's report, dated January 11, 1993, and initialed by investigations supervisor Elizabeth Lenzen, includes:

A statement of concern regarding the agent of the Ziegfield's corporation, Charles Kruger. Herman states that Kruger gave an address for his residence and place of employment that is actually a mail drop where he has a mailbox.

Information regarding landlord Gregory "Jack" Anderson's Kansas adult-entertainment business, including the fact that he pleaded no contest to 304 counts of violations at his club, the Red Apple, and was fined $100,000; 262 of the counts were for sexual misconduct and 36 were for drug sales or possession--mainly of cocaine.

A statement of concern regarding Cary Anderson and Dixie A. Anderson (Cary's mother and a corporate officeholder), indicating that neither has the qualifications to run a business such as Ziegfield's.

Despite the potentially damning information contained in the investigation and despite the agency's stated intent to intervene, no such intervention occurred. Instead, under Adams, the DLLC did as little as possible.

Adams admits he never read the file on Ziegfield's, though he backpedals a bit by claiming he might have been briefed verbally. According to Adams, the state had never intended to intervene in the hearing on the controversial bar's application.

Which simply is not true.
A DLLC "Notice of Intent to Set for Hearing," dated September 21, 1992, and sent to Cary Anderson, indicates that a departmental protest was planned under Mazzie.

Furthermore, the liquor board itself is on record acknowledging that Adams' agency had every intention of opposing Ziegfield's. As late as January 29 of this year, the DLLC investigations section received a notice from the liquor board recognizing the state agency's intent to have investigator Herman appear in protest of Ziegfield's application.

But then Adams reversed course and refused to directly intervene.
In defense of his lack of action, Adams explains that under the law, the character of the licensee himself, young Cary Anderson, not that of the landlord, father Jack Anderson, should be in question.

In other words, topless promoter Jack Anderson may have 300-plus liquor violations and $100,000 in Kansas fines. The family business may stand accused on prostitution and drug charges. The father might own the land and the building for the nightclub in Phoenix. But as long as Anderson's 24-year-old kid applies for the Arizona liquor license, Howard Adams can sleep at night.

Adams adds, "The [assistant] AG [Blair Driggs] said to me, 'The city's going to present exactly what we're going to present. So the best thing for you to do is just support the city in its entirety very strongly.'"

Which Adams did, in the mildest fashion possible. Driggs wrote a short note to be entered into the record at the hearing, which contained precisely one sentence about Howard's misgivings: Adams "has great concerns about the business relationships between the Applicant and Jack Anderson."

None of Herman's file was entered into the record.
Without any evidence of Jack Anderson's record in Kansas, Adams' statement does little to support the argument against the license; further, it ignores Herman's concerns regarding Kruger's address and the qualifications of Cary Anderson and Dixie Anderson.

Herman says he doesn't mind that the board never learned of his protest. "I don't have a preference on how any of this goes. I just do my job and how it turns out is how it turns out. . . . We're [the investigators] basically just supposed to be neutral. We just report facts."

Even without a department protest, the liquor board denied the Ziegfield's application last March. Now the Andersons have another shot at it. Cary Anderson is scheduled to appear before the board in August to request a rehearing on the topic of Ziegfield's liquor license.

Since March, representatives of Ziegfield's have been busy strong-arming area business owners, some of whom had originally protested the nightclub's liquor application.

Ziegfield's representatives have circulated to local businesses a flier titled "Ziegfield's Versus Bazooka's." If a liquor license is granted, the representatives say, Ziegfield's will feature costumed dancers, champagne, valet parking and a full-service kitchen.

If a liquor license is denied, they continue, the owners will open Bazooka's: a 24-hour "juice bar" with male and female nude dancers, "garish neon signs," no kitchen and "sexual paraphernalia including toys, videotapes, condoms, magazines, lotions."

Letters from area business owners in support of Ziegfield's are stacking up on desks at the DLLC and Phoenix City Council. Among those who've withdrawn their protests: Sunstate Equipment Corporation, Thornwood Furniture Manufacturing, Inc., and G&K Development, Inc.

 

Michael Watts, president of Sunstate Equipment Corporation, withdrew his protest after hearing of plans for the all-nude juice bar. "I don't want to use that word, that I was threatened," he says. "They made a very professional presentation."

With each letter, the city and public protests based on location are further weakened.

Meanwhile, Ziegfield's (or, possibly, Bazooka's) is taking form at 5151 East Washington, just 1,000 feet from historic Tovrea Castle. The shapes of showy columns and a curved, stagelike entrance are clearly visible.

Completion of the building is tentatively set for September.
In a June 18 letter to Phoenix City Councilmember Kathy Dubs, Ziegfield's general manager, Charles Kruger, wrote: "As you can see by the construction on the property (photo enclosed), we will not be swayed by some people who indicated they would block us. . . . The building will be leased and opened soon with or without a liquor license. We do not want to be an antagonistic corporate citizen or neighbor, however if the 'juice bar' concept upsets our neighbors or anyone else, we intend to make it clear that we offered a tasteful alternative."

Adams says he has no plans to look any further into the Ziegfield's matter or present any evidence to the board in the event a rehearing is granted. The department's investigation, he adds, is "fairly well complete."

He adds, "This is just frustrating as the devil."
New Times has learned some additional facts regarding the Andersons:
In 1991, the Kansas City Star reported that Jack Anderson sold his interest in his Kansas City topless nightclub, Legs, to his brother, Vance (who is also in the adult-entertainment business), after it was revealed that Jack Anderson was convicted in Tennessee in 1957 for diamond theft.

Legs was formerly known as the Red Apple, the club for which Jack Anderson paid $100,000 in fines.

And last June, the Star reported that Legs was raided by law enforcement authorities. Nine dancers, the club manager and the master of ceremonies were arrested, along with eight customers. The undercover investigation resulted in charges of "fondling or being fondled by patrons while 'lap dancing,'" the Star reported.

Other charges included possession of drugs, patronizing prostitutes and assorted liquor violations. Authorities also seized the club's payroll and tax documents.

Young Cary Anderson is cutting his managerial teeth, as it were, at this very club. Last March, Anderson told the liquor board that he was working at Legs as a manager. (He was not the manager arrested in the June raid.) Cary Anderson's responsibilities, he told the board, include the hiring and firing of employees, handling payroll and ordering liquor. "I have to control the club in a perfect manner," he explained at the time.

Ziegfield's recently hired public relations expert, Bob Bradley, confirms that Cary Anderson is still employed by Legs as an assistant manager, under his uncle Vance. Bradley says he was unaware of the June 26 raid.

Bradley says that Cary Anderson plans to continue in his role at Legs until Ziegfield's is granted its liquor license. "At that point, he plans on coming back [to Arizona], you know, before the start-up of the club and actually, with his experience . . . take an active role in running the club."

In March, almost four months before the Kansas raid, Dixie Anderson described Legs for the Arizona board: "It's a very nice club. It's very tastefully done. They do have girls there that wear costumes--I would say Las Vegas-style costumes. . . .

"I might state that it's a nice enough club that I allowed my son to work there. Because the . . . all the men that work there have to wear tuxedos, they have strict rules there. And as you can see, he [Cary Anderson] is a very nice gentleman and I wouldn't want anything to change that. And I'm his mother, and I know his father feels the same way."
@rule:
@body:The seven members of the governor-appointed state liquor board may be among the least qualified of the DLLC's observers when it comes to judging the director's actions. The board is directed to limit its knowledge to the specific information it receives on the few cases that come within its purview.

Some liquor-board members were not even aware that one of their colleagues, Dorothy Finley, was a recent beneficiary of an Adams ruling.

Finley's company, Finley Distributing--a Miller Beer distributor based in Tucson--was charged with bribery by U.S. Bureau of Alcohol, Tobacco and Firearms. The federal agency charged that Finley Distributing induced the operators of Tucson Rodeo in 1990 and 1991 to sell its beer exclusively. Dennis Olson, Finley's agent, argued that the distributor was actually engaged in an advertising arrangement.

 

Finley paid $3,500 in a settlement agreement, which reflected that "violations were not willful." Olson explains that Finley settled on the federal level because it would have been expensive to take the matter to hearing, and it was not necessary to admit guilt when accepting a compromise.

The matter was brought to the state's attention by ATF, and was set for hearing next February.

In her report of findings to the director, hearing officer Patricia Cooper chastises the state for presenting a particularly weak case. She concedes that there was language in statements by Tucson Rodeo officials (gathered by ATF) that appear to support the position of the state on the allegations of bribery. And yet, she continues, the rodeo officials were not questioned about that language when they appeared as witnesses at the state's hearing.

Rather than cross-examine rodeo officials about her concerns, Cooper recommended that all charges be dismissed. Adams agreed.

And that was the end of the bribery allegations.
Because only unresolved cases are brought before it, the board is rarely made aware of any deals struck between a licensee and the director. But some board members were curious when, earlier this year, an item involving the ritzy Scottsdale bar Jetz disappeared from their agenda.

According to DLLC records, Les Corieri, a manager at Jetz Intercoastal Grill in Scottsdale, was charged in 1992 with presenting a forged document in Scottsdale City Court. The document was a certificate indicating that Corieri had completed an alcohol training course. (He agreed to take the course in exchange for a penalty after he was cited by Scottsdale police in 1991 for allowing an employee to drink while on duty.)

The liquor department received a copy of the police report, and last fall, DLLC hearing officer Allen Reed heard the case. Corieri admitted his guilt.

Reed entered his decision (which was subsequently signed by then-superintendent Mazzie): that Corieri must divest himself of interest in the license.

Lou Jekel, an attorney who represents Jetz's parent company, Tremors, Inc. (which is headed by Mark Drinkwater, son of Scottsdale Mayor Herb Drinkwater), filed an appeal, and the matter was set to go before the liquor board.

Enter Howard Adams. The new director ordered that Reed's decision be amended to change the penalty from divestiture to a $3,000 fine. (A mild punishment compared to the loss Corieri might have suffered through divestiture.)

Adams' reasoning? Because Reed's decision did not specify the length of time for Corieri's divestiture, but simply ordered him to divest, the decision was flawed.

So on the advice of counsel, Adams says he agreed to amend the decision. But instead of altering the decision to specify a time frame, he reduced the penalty to a fine.

When asked why he didn't amend the decision to specify a time frame and send the case on to the board, Adams lays the blame on his lawyer. "On the advice of counsel, this was the best we could do," he says.

Counsel remembers the scenario a little differently.
Bill Albright, the assistant attorney general who was serving as the director's counsel at the time, has since left the Attorney General's Office. When asked about the Jetz case, Albright says, "He [Adams] just made the decision that he felt that the monetary penalty was more appropriate. It wasn't any big deal."

But what about the flawed decision? Albright says that, to his recollection, the decision was not flawed--that there was no legal reason to impose a time frame on divestiture--certainly not in the pure language of the statute." He says he does recall that the defense might have mentioned the wording of the decision as a factor.

Reed agrees with Albright that the decision was not flawed. He says he was not consulted regarding the amendment of his decision. "Once it's out of my hands, I have no input. . . . I should not and I do not and I try not to take a value position."

Jekel says that he was pleased with the outcome of the case. He admits that he tried to negotiate with Mazzie, but without success. "Both are very conscientious," Jekel says of the past and present directors. "Mark Mazzie is more by the book. And Howard Adams is more real life. I mean, more practical."

One board member, who was surprised to hear that Corieri's appeal had been dropped (the board member had already received the materials on the case in a package of preparatory materials, and therefore knew of the matter), was furious after learning that Adams had arbitrarily taken the case out of the board's hands.

"I just felt, you can't change the decision of another director once it's in and that director said this is final. . . . I felt that Howard had taken a position or a role that he should not have, and that it should have gone before the board," says the board member, who spoke on the condition of anonymity, because it is not board practice to discuss the details of a case.

 

@rule:
@body:While most people in Arizona know Rob Carey as the state's first assistant attorney general, some might remember him as "Kung Fu." That's the character he played during years as a bartender at Bobby McGee's Conglomeration, a bar-restaurant at which staff members don creative costumes.

So it's only natural that Carey would be lured to the bar business. Until mid-July, he was a co-owner of Dash Inn, a restaurant-bar with locations in Tempe and Tucson.

According to a recent account by Tucson police, Grant Woods' right-hand man doesn't mind throwing his political weight around.

Apparently, things got a little too crowded at the Tucson Dash Inn on the evening of last November 21, following the annual University of Arizona-Arizona State University football game. The bar was so crowded that five officers spent two hours trying to maintain control.

When police asked him to leave the premises, Carey explained that he was an owner and flashed his attorney general's badge.

Sergeant George Smith of Tucson Police Department was perplexed. "I do not know why the individual produced the badge and told me he was with the Attorney General's Office, as it had no impact or bearing upon the actions that we were taking at this time," Smith wrote in his report.

"Nooooooo. See, that's just the biggest bunch of shit. It really is," Carey counters. He says that the badge was the only form of identification he was carrying at the time, and that he only pulled it out because he wanted to let the cops know he wasn't trying to harass them, but that he was a tenant of the bar.

Along with problems surrounding crowd control, the Tucson police have an ongoing concern that Dash Inn is operating under the wrong type of liquor license. Area business owners like Dennis Arnold share that concern.

Arnold, a 33-year-old native Tucsonan, has poured thousands of dollars into his business, Gentle Ben's Brewing Company. He doesn't mind.

What he does mind, though, is competitors who play what Arnold calls "dirty pool." Arnold operates Gentle Ben's under a bar license called a "number 6" in the liquor industry. (Number 6 licenses are limited in number--there are about 8,000 in the state--and cost about $20,000.) It irks Arnold to see a competitor open up with a restaurant license called a "number 12" and try to operate as a bar. (Number 12 licenses are not limited, and cost about $2,000. The stipulation is that the business must derive at least 40 percent of its revenue from food.)

Last year, Arnold complained to the DLLC that Dash Inn, a university-area business that operates under a number 12 license, was not selling anywhere near 40 percent food. According to the DLLC file, two other complaints (both anonymous) were received, as well.

Jim Coburn, a DLLC investigator, observed activity at Dash Inn and determined that there was cause to believe that the business was in violation of the stipulations of its license. A subpoena was issued by the DLLC for Dash Inn's records in order to settle the question.

The bar's owners--including Carey--hired a lawyer, who questioned the subpoena as too broad. The lawyer, Lisa Gervase, and Mazzie's people discussed some options, including limiting the subpoena.

Shortly after Howard Adams took over as director, the subpoena was quashed entirely and a consent agreement reached between Dash Inn and the state.

Because of the potential appearance of impropriety, the DLLC (under Mazzie) had brought in Jim Hays, an assistant city attorney in Phoenix, rather than the Attorney General's Office, as counsel.

Hays knew that Carey's involvement would make the case ripe for future inspection. In his mind, people would either think that Mazzie had been too tough (he had a history of bad blood with the Attorney General's Office concerning the Southern Wine case) or that Adams had been too lenient.

"It was like a no-win situation," Hays says. "From what I could see, we had a legitimate case against this business for not being in compliance with the statute. Now, the flip side of that is, while this business isn't in compliance with the statute, there are probably quite a few others [that aren't in compliance, either]."
In the end, it was agreed that the department will not in any way punish Dash Inn for any violations of the 40 percent rule prior to 1993. Dash Inn will be responsible for producing an audit of its records for the entire year of 1993. If the 40 percent rule is not met, the restaurant's license will be revoked. Dash Inn also has the option of applying for a bar license. (It is unlikely this will happen, as the location is not zoned for a bar.)

 

Carey insists that his attorney-general position didn't get him any favors from the DLLC--under either administration.

"I've never met Mazzie. I've never met Howard Adams. I don't know any of these guys--and I can tell you this: Negotiations were not any easier with Howard Adams," Carey says.

Carey suspects that Mazzie called for the Dash Inn investigation and subpoena as a result of the Southern Wine and Spirits, Inc., perjury investigation. "From what I know of the . . . department of liquor's actions, it's highly unusual to have the type of enforcement action that was taken. And it makes it even more suspect when it comes on the heels of an action that I took--really, that I spearheaded for the office," he says.

Mazzie denies this. "We bent over backwards for them more than I think I ever did for any other licensee," he says.

Carey says he's retired from the bar business for good--at least for the duration of his stint with the Attorney General's Office.

"It became quite apparent to me that you could not mix my job and the ownership of bars. It was causing too many problems. Primarily perception, not really reality, I think," he says.

Adams vows to crack down on restaurant licensees who don't sell the requisite amount of food. And as far as Dash Inn is concerned, he says, even with the subpoena, the case could have dragged on.

"You can't close a place down as fast as you think," he says.
Meanwhile, Arnold insists that the problems at Dash Inn are worse than ever, and Detective Robert Huff of Tucson Police Department says, "There has been a concern all along that the place was operating as a bar rather than a restaurant. . . . And there still is that concern."

The Tucson Dash Inn is closed for remodeling and will reopen sometime in mid-August, according to the bar's licensee, James Skoda.

Jim Coburn says, "Our philosophy in investigations now is to keep licensees in compliance [through cooperation]. . . . There's a cost savings to the agency, and also it maintains a level of good will with the agency with the licensee, showing that we're willing to work with them."

@rule:
@body:Kay McKay served on the liquor board for many years, and is remembered as often outspoken and sometimes critical of goings-on at the DLLC.

She insists, however, that justice is generally served at the hands of the director and board.

When the department's checks and balances don't work, she says, "It's important that people do--through whatever mechanisms, through the press, or whatever--that they alert people that they have some concerns about what is going on in the department. They need to tell the director. Now, I can tell you as an employee, they'd probably lose their job."

Privately, investigators and other dissatisfied staff members say they fear that if they complain about the agency's new direction of ready compromise under Adams, they'll be fired on the spot. Many are looking for other jobs. Meanwhile, they say, DLLC investigations staff members are conducting routine inspections and trying to be friendlier; new investigations are not being initiated.

"Literally, it's like someone's put aloe on the liquor industry," one investigator whispers, terrified that someone will overhear.

This new mandate means less work for the investigators. Danny Thomas, an investigator based in Flagstaff, says, "The workload that I had compared to what I have now has diminished almost 50 percent."

Quickly, he adds, "I have to say, I back them 100 percent. Because I'm working for them and I do what they want us to do.


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