State releases report on probe of Durham ABC Board

Aug. 13, 2013 @ 10:51 PM

A state investigator says his year-long probe of the Durham ABC Board found “no malfeasance or criminal activity” on the part of its general manager, staff and board members.

But Alan Fields, N.C. Alcohol Law Enforcement Assistant Director for Special Investigations, nonetheless reported hearing of conduct some at the agency find shady, and of a “power struggle” between the ABC Board’s general manager and police chief.

The investigation touched on the hiring of a computer consultant with ties to one board member, a discount used-car purchase by the board’s police chief and the rental of by a board member of a Maryland hotel room.

Fields detailed his work in an 86-page report released Tuesday by the N.C. Alcoholic Beverage Control Commission. The commission’s spokeswoman, Agnes Stevens, said it is reviewing the report and has “no additional comment to provide at this time.”

The investigation began in May 2012 at the behest of ABC Commission Chief Administrator Mike Herring. The commission regulates the sale of alcohol throughout North Carolina and oversees county ABC boards.

ALE – a state police agency that handles alcohol-law issues – assigned Fields to the case. He wound up questioning many key officials at the Durham ABC Board, including General Manager Emily Page, Chief of Law Enforcement Derrick McMillan, board Chairwoman Kim Shaw and former board member Erroll Reese.

McMillan was the first person interviewed, and, according to Fields, “raised a number of concerns about the business practices” of the Durham ABC Board, which operates the county’s chain of state-owned liquor stores.

Among other things, McMillan alleged that Reese had run up charges on an ABC Board credit card and was a friend of the computer consultant who eventually received $39,300 to help fix problems with the board’s point-of-sale computers.

The credit-card allegation involved a series of purchases Reese said were made in the course of board business, mostly as and he other members were searching in 2011 for a new general manager.

Page, then a member of the agency board, eventually received the job. She beat out a group of applicants that, according to Fields, at one time also included Shaw.

The one expense that drew the most scrutiny involved Reese’s rental of a hotel room in Baltimore, while there on personal business to attend a ceremony at John Hopkins University.

Reese told Fields a $308 charge to the Durham ABC credit card was inadvertent. He was on the phone when checking in, gave his wallet to a family member and the family member gave the check-in clerk the wrong card.

On realizing the error, Reese said, he asked the clerk to put the bill on his personal card. He produced a receipt showing that such a transaction took place. The hotel was slow to cancel the charge to the agency card, and Reese wound up writing the ABC Board a check to cover the expense.

Also disputed were a series of gasoline purchases by Reese on the agency card. He said he made them while on board business. He eventually wrote the ABC Board a check to cover them, but also filed a belated mileage claim that more than offset his payment.

The computer-consultant issue figured in the bulk of the documentary evidence that Fields collected from the ABC Board.

The investigator established that the deal had gone to a Raleigh firm led by Rex Wills, who, like Reese, had attended Alabama A&M University and worked for IBM.

Fields said his research indicated that the two had attended the university 10 years apart, and that there was no sign they had known each other or worked together at IBM.

Reese asked ABC administrators to consider Wills’ firm for the contract. He initially told Fields he hadn’t had any contact with the company in 2010, 2011 or 2012. But Fields found a 2011 email by Reese that included the logo of Wills’ company, hi-tekPOS. Reese said he couldn’t explain that, but eventually conceded that he knew Wills as of 2011.

He denied any association with or employment tie to hi-tekPOS, and Fields didn’t report finding any.

Some Durham ABC administrators preferred hiring another firm for the consulting job, but Page opted to use Wills’. She told Fields the second firm’s references hadn’t checked out, and that its price quote likely masked potential expenses more clearly accounted for in Wills’.

Shaw, however, in a late April interview told Fields that she was “concerned” and “angry” by his discovery that some of Page’s subordinates had preferred the second firm. The board announced Page’s resignation a few days later.

The used-car issue surfaced as board members and Page explained their distrust of McMillan.

Page told the investigator she’d received an anonymous letter alleging that McMillan works a secondary-employment job at Durham’s Rick Hendrick car dealership. As it happens, the ABC Board buys its police vehicles from the dealership.

The disputed swap happened in 2010 and involved a Chevrolet Impala the board on the advice of Page’s predecessor traded in after it received $2,302 worth of board-funded transmission work.

According to a summary that Fields obtained from ABC Board attorney George Miller, the dealership gave the board a $6,000 credit for the Impala and two months later sold it to McMillan for $3,300.

The vehicle had less than 86,000 miles on it and a tax value of $12,110.

Fields said Miller drew a comparison between that deal and another, a year later, where the dealership credited the board $7,000 on a vehicle it later sold for $13,441.

The investigator asked authorities in the N.C. Division of Motor Vehicles to review the Hendrick/McMillan transaction. He said they told him it “did not appear to violate North Carolina motor vehicle laws.”

ABC officials in their conversations with Fields acknowledged that Page’s tenure as general manager has been stormy. Some said she wasn’t well-suited to the job; others said she’d instituted needed changes.

Page herself attributed the controversy to her plans to change the working hours of Durham’s ABC store employees. She told Fields that full-time employees work three 13½-hour shifts each week, a schedule she called “insane” and “unheard-of in the retail world.”

Reese and Shaw both told the investigator they thought McMillan was behind the complaints to the state. Shaw in her last interview with Fields, on Aug. 6, told him McMillan and Page have a “contentious” relationship and are engaged in “an obvious struggle.”

She also acknowledged the board is considering outsourcing its law-enforcement tasks – a possibility the Durham County Sheriff’s Office is considering.

Fields indicated his work was slowed at several points by the failure of the ABC Board to produce documents in a timely way. He also said Shaw hadn’t responded to several of his phone calls.

Reese is one of two former board members Durham County Commissioners replaced late in July. Shaw had recommended their reappointment, but county officials opted to give the seats to two appointees with law-enforcement backgrounds, Rufus Sales and Andy Miller.