Letter from N.H. AG gives credence to Liquor Commission investigation

  • New Hampshire Attorney General Gordon MacDonald speaks to the media at the Grafton Superior Court in North Haverhill on March 14, 2018. Carly Geraci / Valley News

  • Andru Volinsky

Monitor staff
Tuesday, April 17, 2018

A reported $24,000 bulk purchase of alcohol observed by Executive Councilor Andru Volinsky “plainly violated the existing policy” of the New Hampshire Liquor Commission (NHLC), the state’s Attorney General’s Office said Thursday.

The characterization comes in the middle of an investigation into the agency after allegations of improper sales practices. In a letter to Gov. Chris Sununu on Thursday, Attorney General Gordon MacDonald said his office is carrying out witness interviews and reviewing policies at the commission, which carries out all sales of hard alcohol in the Granite State.

Writing to Sununu and Volinsky, Attorney General Gordon MacDonald said his office is “engaged in an inquiry to ensure that the conduct of NHLC, and its employees, conforms to the law and the policy.”

That includes exploring whether the commission is meeting its reporting requirements to the Internal Revenue Service over bulk purchases of alcohol, the letter said, a topic of contention in recent years.

In February, Volinsky, a Concord Democrat, sent a 13-page letter to Sununu and MacDonald detailing allegations that the commission was turning a blind eye to out-of-state bulk purchasers and failing to report certain sales to the federal agency. Those accusations emerged from interviews with employees and an in-store visit Volinsky had carried out, in which he says he witnessed two out-of-state buyers split a $24,000 purchase into separate cash transactions to skirt a $10,000-or-higher IRS reporting law.

Volinsky’s methods raised hackles among some of his political opponents, who described his store visit as surreptitious, prompting Sununu to a call for separate investigations into both the commission and the executive councilor. But the Attorney General’s Office now is exploring both the policies and practices of the liquor agency, and has dispatched a Department of Justice investigator to conduct witness interviews, the letter said.

A representative for the commission said Monday it was “not able to comment at this time.” But the agency has vigorously denied facilitating large-scale liquor purchases without reporting.

“There’s nothing illegal or unscrupulous about making large sales to out of state customers as long as our employees follow the policies in place set forth by the state and federal government,” the agency said in a statement February.

For the Liquor Commission, the probe is nothing new. In his letter, MacDonald outlined past instances where tax reporting procedures had raised concerns.

In 2009, the IRS issued a notice that one of their sales reporting forms – known as Form 8300s – had been late or incomplete, according to the letter. But after the commission challenged the notice, the IRS failed to respond, MacDonald wrote.

In 2012, the IRS conducted a broad investigation into large-volume sales, according to MacDonald. In 2014, the U.S. Attorney’s Office in Concord registered concerns over the agencies practices with the state attorney general but declined to take action, MacDonald continued.

Meanwhile, the IRS recently conducted an investigation into purchases made at New Hampshire Liquor Commission outlets by two New York residents charged with tax fraud, visiting multiple premises in person, according to internal emails. That investigation has since ended; according to the attorney general, “the IRS subsequently informed us that it was withdrawing the summonses.”

It is unclear when the attorney general plans to release its final report. In his letter, MacDonald said the agency hopes “to complete this work as soon as possible within existing resource constraints” and issue a written a report.

(Ethan DeWitt can be reached at edewitt@cmonitor.com, or on Twitter at @edewittNH.)