State Liquor Authority Chair's Claim of Undue Influence Is ...

STATE OF NEW YORK
OFFICE OF THE STATE INSPECTOR GENERAL
Final Report
February 21, 2009
STATE LIQUOR AUTHORITY CHAIR’S CLAIM OF UNDUE INFLUENCE
IS UNFOUNDED, INSPECTOR GENERAL CONCLUDES
SUMMARY OF FINDINGS/RECOMMENDATIONS
The Inspector General investigated allegations that Carl Andrews, then a Deputy
Secretary to the Governor, exerted improper political influence on Daniel Boyle, the
Chairman of the State Liquor Authority, 1 during the pendency of proceedings involving
Cipriani family establishments’ liquor licenses. The Inspector General’s investigation
found the allegations to be unsubstantiated. The Inspector General found, however, that
Khari Edwards, a subordinate to Andrews, improperly contacted State Liquor Authority
Commissioner Jeanique Greene in the midst of a board meeting to discuss the Cipriani
matters pending before the board that day. Moreover, Edwards did not testify truthfully
to the Inspector General when questioned under oath regarding this communication. The
Inspector General finds that Edwards is ill-suited to serve as a representative of the
Governor’s office, and recommends that his employment be terminated.
ALLEGATIONS
On Friday, November 21, 2008, State Liquor Authority Chairman Daniel Boyle
telephoned the First Deputy Inspector General to advise that a formal complaint to the
Inspector General would be forthcoming. Boyle made no direct references to the Cipriani
proceedings during the call, but expressed general frustration with the Authority, and
stated that he would be forwarding materials to the Inspector General’s office which
would outline his concerns.
The following Monday, November 24, 2008, the New York Post reported that
Boyle had alleged that then-Deputy Secretary to the Governor for Intergovernmental
Affairs Carl Andrews had exerted undue political pressure upon him during the
Authority’s disciplinary proceedings against a number of Cipriani-owned restaurants
holding state liquor licenses. 2 In the article, Boyle alleged that, in a meeting six months
1 Daniel Boyle’s term as Chairman of the Authority formally expired on February 13, 2009. Pursuant to
New York State’s Alcoholic Beverage Control Law, he will remain in his position until a successor is
“appointed and qualified.” N.Y. Alco. Bev. Cont. § 11 (McKinney 1995).
2 Frederic U. Dicker, Cipriani Muscle Entree, N.Y. Post, November 24, 2008, at 9.
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earlier in May 2008, Andrews had pressured him to allow the Cipriani entities to retain
their licenses after the Ciprianis had been convicted of income tax evasion. The Post also
reported Authority Counsel Thomas Donohue’s impression that the Ciprianis’ counsel
somehow knew how newly-appointed commissioner Jeanique Greene would vote on the
relevant licensing matters on the day of the Authority’s vote.
Upon reading the Post story that morning, the First Deputy Inspector General
telephoned Boyle to inform him that the Inspector General would be undertaking an
investigation into the matter, and requested that he send the materials he referenced
during their previous telephone discussion. A few minutes later, Boyle faxed to the
Inspector General a ten-page typed chronology of events beginning in April 2008. The
notes described Boyle’s concerns, covered some of the allegations that had appeared in
the Post, and also implied that his vote to revoke the Ciprianis’ liquor licenses had
resulted in retaliation against him.
Later, during his first examination by the Inspector General’s office, Boyle
articulated his concerns in greater detail. 3 He claimed that Commissioner Greene and
Commissioner Noreen Healey deprived him of certain administrative authority
previously delegated to him by board resolution, and that he was forced to accept certain
staff changes imposed upon him by the other Commissioners and members of the
Governor’s executive staff. Boyle also implied that he was forced by the Governor’s
office to provide Healey and Greene with state automobiles for their use as a reward for
their votes. 4
SUMMARY OF INVESTIGATION
The Inspector General reviewed relevant documents including the Authority’s
application file, documents maintained by the Authority’s Chairman, Commissioners, and
staff, and telephone records. The Inspector General examined members of the Authority,
including Chairman Boyle, Commissioners Healey and Greene, Counsel Thomas
Donohue, and Deputy Commissioner of Governmental Affairs Thomas O’Connor. The
Inspector General also examined members of the Governor’s staff, including Carl
Andrews, the then-Deputy Secretary for Intergovernmental Affairs; Khari Edwards, a
Regional Representative for Intergovernmental Affairs; and Sylvia Hamer, Deputy
Secretary for Technology Operations and Gaming. In addition, the Inspector General
examined the Ciprianis’ regulatory attorneys, Warren Pesetsky and Robert Bookman. All
such examinations were conducted under oath and recorded.
3 Chairman Boyle was examined by the Inspector General’s office on December 8, 2008, and January 22,
2009.
4 See also, Susan Edelman, Cipriani Saviors Get Cars, N.Y. Post, November 30, 2008, at 4 (suggesting that
Commissioners Healey and Greene had received the use of state cars as “a perk”).
2

The State Liquor Authority’s License Revocation Process and the Cipriani Licensees
The New York State Division of Alcoholic Beverage Control exists within the
state’s executive department. 5 The Division is headed by the three-member State Liquor
Authority, which consists of a chairperson and two commissioners appointed by the
Governor with the advice and consent of the state Senate. The Authority has the power
to appoint deputies and other staff. For administrative and other purposes, the members
of the Authority report to the Deputy Secretary for Technology Operations and Gaming
within the Governor’s office.
The State Liquor Authority issues liquor licenses to restaurants, bars, and other
entities, and ensures compliance with New York State’s Alcoholic Beverage Control
Law. In the event that the holder of a liquor license is convicted of a felony, the
Authority must revoke the license unless the felon receives a certificate of relief from
disabilities – a legal means of avoiding collateral civil consequences to a felony
conviction. 6 Such certificate does not prevent the Authority from exercising its
discretionary power to revoke a liquor license.
In July 2007, Arrigo Cipriani and his son, Giuseppe Cipriani, who together had
operated multiple establishments holding liquor licenses in New York City, were
convicted by guilty plea of various charges of tax evasion. Arrigo Cipriani was convicted
of a felony charge, and Giuseppe Cipriani, the principal listed on the Cipriani entities’
licenses, was convicted of a misdemeanor charge. As a condition of their plea
agreements, the Ciprianis agreed to pay $10 million in unpaid taxes and engaged an
independent monitor of their family businesses’ taxes. Arrigo and Giuseppe Cipriani
each received a certificate of relief from disabilities from the court on the day of
sentencing, October 10, 2007.
In early spring 2008, the State Liquor Authority filed a series of charges against
nine Cipriani entities by Notice of Pleading. Each Notice cited multiple infractions of the
Alcoholic Beverage Control Law. These included availing (the use of a liquor license by
a person other than the named license holder) 7 and “conduct . . . of improper nature” –
tax
5 The executive department is an administrative division of the executive branch of state government that,
by statute, is headed by the Governor.
6 See also, Liquorgate Anyone? N.Y. Post, November 26, 2008, at 32 (questioning whether the two
commissioners’ votes not to revoke were improper because, “[t]ypically, a felony conviction would
automatically bar someone from holding a liquor license.”).
7 Each of the nine establishments registered to Giuseppe Cipriani was charged with allowing other Cipriani
corporate entities and Giuseppe’s father, Arrigo, and sisters, Carmela and Giovanna, to use the
establishment’s liquor license.
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evasion. After months of discussions, 8 the Authority’s counsel and the Ciprianis’
counsel negotiated a possible settlement offer, pursuant to which the Cipriani licensees
would pay a $500,000 fine, 9 but their licenses would not be suspended. Donohue
testified that he approached both Chairman Boyle and Commissioner Healey about the
settlement offer to determine whether he should continue to pursue such negotiations.
Both advised him that they were receptive to a possible settlement.
May 6, 2008, Meeting Between Chairman Boyle and Deputy Secretary Andrews
According to Chairman Boyle’s testimony to the Inspector General, he received a
call in April 2008 from State Senator Hugh Farley seeking information about the
licensure of Lola Restaurant in New York City. 10 When Boyle later met with Farley on
May 5, 2008, to provide the information, Farley asked Boyle to meet with Carl Andrews
and provide the information to him directly. Boyle, who testified that he did not know
Andrews at that time, agreed to meet Andrews the next day. 11 As the Governor’s Deputy
Secretary for Intergovernmental Affairs, Andrews served as a community liaison for the
Governor and his state agencies and supervised a small staff of regional representatives.
According to Boyle and Andrews, they met privately in Andrews’ office in the
Capitol in Albany on May 6, 2008. Both parties testified that the meeting primarily
focused on community issues regarding Lola Restaurant and its pending court case. The
conversation then turned to administrative issues at the Authority, including the recent
resignation of the chief executive officer and the change in supervising Deputy Secretary
from Laura LeFay to Sylvia Hamer.
Boyle informed the Inspector General that, toward the end of the meeting,
Andrews asked him about the Cipriani matters. According to Boyle, he had not been
debriefed on the Cipriani issues and was not fully prepared to discuss them, but told
8 The Authority’s counsel, assisted by Authority staff, negotiated a potential settlement of the charges with
the Cipriani licensees. Specifically, the Cipriani licensees sought, through a mechanism known as a
conditional no contest offer, to submit an offer to the Authority for final determination. If the offer were
rejected by the members of the Authority’s board, the matter would be returned to the Authority’s counsel’s
office to schedule an administrative hearing of the charges. The Authority’s counsel initially raised the
possibility of a combination of a license suspension (meaning that the entities could not maintain operations
serving alcohol during the pendency of the suspension) and the maximum $10,000 penalty for each of 36
charges – a $360,000 fine. The Ciprianis rejected that option, arguing that for business reasons their
catering and related businesses could not accept a suspension.
9 Because the Authority only has jurisdiction to fine $10,000 per charge, in order to attain the $500,000
fine, additional charges were added that had not originally been filed. Authority Counsel Donohue testified
that these additional 14 charges could have originally been filed, but were not.
10
Lola Restaurant, in the SoHo section of Manhattan, sought permission from the Authority under its liquor
license to play live music. The subject of Lola’s license generated a great deal of community interest and
prompted a lawsuit by a neighborhood association, the SoHo Alliance. The dispute over Lola’s license
arose during former Governor Spitzer’s administration and, by all accounts, was the subject of a fair
amount of discussion between the Governor’s office and the Authority over the course of many months.
11 While Boyle testified that he did not recall ever speaking to Andrews before May 6, 2008, a number of
witnesses testified that, in the summer of 2007, Boyle had attended a meeting via teleconference between
members of the Authority’s staff and Andrews and his staff.
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Andrews that it was an important case “that we need to take a look at . . . .” He testified
that he told Andrews:
[O]ur lawyers are working on it with their lawyers, maybe
to come up with some kind of resolution to it, which is the
normal course of business. I told Carl Andrews at that time
also not to get involved, nor should the Governor, because
no matter what, this could be a very sticky case . . . . I
stated, also, that we shouldn’t just take a fine for a situation
like this, because we don’t – it’s not consistent with what
we do.
Boyle further stated that he informed Andrews that the Ciprianis were charged
with availing, which “usually [results in] a loss of the license.” Boyle testified that
Andrews asked, “Can I offer you some political advice?” and he responded, “Go ahead.”
According to Boyle, Andrews then said, “With your meeting, speak how you feel, but do
what you’re supposed to do, keeping in mind you work for us[,]” implying, according to
Boyle, that the Governor’s Office wanted the Ciprianis to retain their licenses. Boyle
testified that Andrews’ statement led him to believe that “there was a problem” in that
Andrews wanted him “to vote a certain way.” Boyle testified that he “stood up, and that
was the end of the conversation.” Boyle testified that he returned to his office and made
notes of the event. 12 He told no one other than his secretary about the meeting.
By contrast, Andrews testified that he simply asked Boyle about the status of the
Cipriani licensees towards the end of the meeting. His question was “[o]ut of interest.
Just passing in conversation. I said, ‘I’m not trying to tell you how to vote, just give me
your thoughts on it.’ Because it had been in the papers and I knew a pending vote was
coming. I didn’t know when.” Andrews said he vaguely recalled discussing with Boyle
the possibility of the licensees paying a fine, and that he mentioned that “a lot of people
work there.” Andrews testified that no one had directed him to ask about the Cipriani
entities, and that he had never spoken to any representative of the Cipriani licensees. He
also testified that he “had no opinion” about the Cipriani proceedings. Andrews noted
that, from his knowledge of the Authority and Commissioner Boyle’s reputation in the
Governor’s office, “it was perceived that he was very difficult to work with, deputy
secretaries had problems working with him.” He denied having told Boyle “remember
who you work for,” but might have said, as a general statement, something along the
lines of, “We all work together. I’m trying to help you work with the agencies.” He
testified that he found the Chairman’s intimidation claim “puzzling” because Boyle
called him subsequently about unrelated issues: “[If] he felt uncomfortable, why continue
to talk to me?” Andrews recalled shaking hands at the end of the meeting. “He went his
way. I went back to my work.”
12 In his notes, Boyle wrote a substantially similar account to his testimony before the Inspector General:
“Andrews then said, can I offer you some sound political advise [sic] – go ahead for your meeting, speak
how you feel but vote on what you need to do. ‘You can save face for yourself by how you feel but people
here are who you answer to.’”
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Later that day, the Governor’s press office called Chairman Boyle’s office to
relay a media inquiry as to whether Andrews had called the Authority to advocate on
behalf of the Ciprianis. Deputy Commissioner O’Connor inquired of Chairman Boyle
and Counsel Donohue whether contact had been made by Andrews regarding the
Ciprianis. According to O’Connor, both Donohue and Boyle said that they had not been
contacted. According to O’Connor, at Boyle’s instruction, he responded later that day to
the Governor’s press office that, as far as he was aware, the only contact that had been
made by the Governor’s office regarding the Ciprianis was an informational inquiry from
a regional representative responsible for State Liquor Authority matters, Khari Edwards,
and that Edwards had not advocated one position or another. By contrast, Boyle testified
that he “didn’t respond” to O’Connor’s question. He continued, “I didn’t know – first of
all, I didn’t want to put any of my staff people in a position, and I didn’t know where this
was going to go.”
According to Andrews, Boyle called him on the afternoon of their meeting to say
that a newspaper had called him and knew that the two had met, and that the newspaper
wanted to know if the meeting was about the Ciprianis. Andrews informed the Inspector
General that he had no idea how the newspaper had learned of the meeting, and that he
had told Boyle, in essence, “You know we talked, and Cipriani’s wasn’t our main topic. I
just asked you a passing question about Cipriani’s.” Andrews stated that he never spoke
to Boyle again about the Cipriani licensees; that he did not know how the newspaper
learned of their meeting; and that he did not contact the newspaper reporter on or about
May 6, 2008. Boyle testified that he did not recall calling Andrews, and did not believe
that he had done so. Had he done so, he averred, he would likely have memorialized
such a conversation, and he did not.
Boyle testified that a related incident involving the Ciprianis’ counsel also made
him suspicious. He learned from Authority Counsel Donohue that Donohue had received
telephone calls from attorneys Warren Pesetsky and Robert Bookman in the spring of
2008 asking if someone from the Governor’s Office had called him yet to negotiate a
lower offer. 13 On May 6, 2008, Donohue asked the Authority’s then-CEO Joshua Toas,
Deputy Commissioner O’Connor, and Chairman Boyle if they had received any such
calls. All said they had not. When asked about Donohue’s allegation that Pesetsky had
called him, Pesetsky testified that he did not recall ever having made such a call.
Bookman also denied having made such a call to Donohue, but admitted that he had
complained to Edwards about the size of the fine. Edwards and Bookman both testified
that the two were acquainted and had prior business dealings, as Bookman was the
President of the New York City Nightlife Association and had many matters pending
before the Authority. Ultimately, by all accounts, no one from the Governor’s Office
ever called the Authority to negotiate a lower fine for the Ciprianis.
13 Donohue informed the Inspector General that the Ciprianis’ counsel said, in substance, “they’re gonna
ask for it [the settlement amount] to be lowered” from $500,000 to $400,000.
6

The May 28, 2008, Board Meeting
A State Liquor Authority board meeting was scheduled for May 28, 2008, to
address many issues before the Authority, including the Cipriani matters. At the time, the
board consisted of only two members, Chairman Boyle and Commissioner Healey,
because a commissioner had retired and had not yet been replaced. Following normal
practice, a few days before the meeting, Boyle and Healey each received a package of
information from Donohue concerning the matters on the agenda, including the Cipriani
matters.
Boyle testified that Andrews again tried to pressure him just before the May 28,
2008, board meeting. According to Boyle, on May 27 at approximately 10:45 a.m., he
received a telephone call from Andrews. When they spoke, Andrews asked how his
weekend was. 14 Boyle testified that when he answered Andrews’ question, and asked
how he could help Andrews, Andrews replied that he was simply calling to ask about
Boyle’s weekend. Boyle testified that he interpreted this call to be a reminder from
Andrews how he was expected to vote on the Cipriani matters. For his part, Andrews
testified that he did not recall ever making such a call: “I don’t know why I would just
call out of the blue and say how was your weekend. There has to be something else in
the conversation other than just how was your weekend.”
In her testimony to the Inspector General, Healey said that she had no discussions
with the Governor’s Office or anyone other than Counsel Donohue regarding the Cipriani
liquor license issues prior to that board meeting. 15 Healey testified that she did not speak
to the Chairman and did not know how he was going to vote on the matter. She testified
that Boyle never informed her that Deputy Secretary Andrews or anyone on behalf of the
Governor’s Office had contacted him regarding the Cipriani matter.
At the May 28 meeting, Boyle voted not to accept the offer and Healey voted to
accept the offer. As a result, the Cipriani licensees’ offer was rejected and the Ciprianis
sought reconsideration of the issue by the Authority. 16 The Cipriani licensees’ request
for reconsideration and the settlement offer were ultimately scheduled to be heard again
by the board at a meeting on August 6, 2008.
14 In his notes, Boyle wrote that Andrews called, and he called Andrews back: “5/27/08 – Tuesday morning
approx. 10:45, I received a call from Carl Andrews – I returned the call . . . , he just wanted to ask how my
weekend was.” The Inspector General reviewed Chairman Boyle’s cell phone records for May 27, 2008,
which indicate that a call was placed at 10:00 a.m. to Carl Andrews’ telephone number at the Governor’s
office in Albany, and that such telephone call lasted two minutes.
15 In fact, Healey testified that she did not meet Andrews until July 2008, when the two met briefly, but did
not discuss the Cipriani matters.
16 As a result of the tie vote, procedure dictated that an Administrative Law Judge hear the charges as to
whether the Cipriani licenses would be revoked. According to Cipriani attorney Warren Pesetsky, the
Cipriani licensees requested that such a hearing be scheduled far enough in the future that the matter could
be reconsidered by the Board first, in the hope and expectation that a new commissioner would be
appointed who would break the tie vote in the Ciprianis’ favor.
7

The June 2008 Appointment of Commissioner Greene
Within weeks of the May board meeting, on June 23, 2008, Jeanique Greene was
confirmed as a commissioner of the Authority. 17 Greene informed the Inspector General
that in June 2008 she met with personnel in the Governor’s office to learn the background
of the Authority and Commissioners’ roles. She testified that, at no time during the
period leading up to her appointment, did anyone raise any specific matters regarding the
Cipriani licensees or any other licensees; only general issues were discussed. She had no
knowledge of any specific pending Authority issues, including the Cipriani licensees’
issues, until she commenced work there on July 21, 2008. She first heard about the
Cipriani matters during her first week of work through Counsel Donohue who explained
the Cipriani issues and its procedural history. Greene recalled that Donohue provided her
with a “board package,” including material on the Cipriani matters, at the end of July
2008. Donohue testified that Greene did not appear to have prior knowledge of the
matter.
Greene testified that she met separately with both Boyle and Healey after
receiving the written materials on the Cipriani matters, but before the August 6, 2008,
board meeting. Her meeting with Boyle was approximately one or two days before the
August 6 board meeting. Boyle told her of his previous vote and said that it was his
belief that the Ciprianis should not have a liquor license. According to Greene, Boyle did
not inform her that anyone had contacted him regarding his vote on the Cipriani matter,
or that political pressure was being exerted upon him. Greene testified that she did not
tell Boyle how she expected to vote, and Boyle told her that he did not wish to know and
that she did not have to discuss that with anyone.
Greene informed the Inspector General that she met with Healey prior to the
August board meeting. Their discussion was mostly general in nature, pertaining to
routine board matters and the structure of board meetings. Greene stated that she did not
recall Healey telling her about her previous vote on the Cipriani matters, or how she was
prepared to vote at the upcoming meeting. Greene did recall that Healey said something
about everyone having their own vote, and that Greene did not have to tell Healey how
she expected to vote. According to Greene, Healey did not say that she felt any pressure
to vote a certain way on the Cipriani matter, or that she was ever contacted by anyone
from the Governor’s office or by any politician concerning the Cipriani matter.
According to Greene, approximately a day or two before the August 6, 2008,
board meeting, she called Sylvia Hamer, the Deputy Secretary to the Governor whose
portfolio included the Authority. Greene stated that she had first met Hamer on June 23,
2008, the day she was confirmed as Commissioner, but had not discussed the Cipriani
matter. Greene called Hamer to discuss material in the Cipriani board package,
specifically to ask whether it was true, as a labor union had asserted, that the tax impact
to the state would be profound if the Cipriani entities’ licenses were revoked. According
to Greene, Hamer said that it would impact the state, particularly with respect to the loss
of taxes, but she spoke generally. Greene testified that she and Hamer never discussed
17 On that same day, Commissioner Healey was reappointed for a second term.
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Greene’s vote. Greene testified that, based upon her conversation with Hamer, she did
not feel that that Governor’s office preferred a particular outcome in the Cipriani matters,
and at the conclusion of that conversation, she “absolutely” felt that she could vote
independently.
Chairman Boyle and Commissioner Healey testified that because Commissioner
Greene had just joined the Authority, they did not know whether she was going to vote
on any matters at the August 6, 2008, meeting. According to Authority Counsel
Donohue, on the morning of August 6, during a discussion prior to the commencement of
the board meeting, Cipriani counsel Pesetsky told Donohue that Greene was going to vote
on the Cipriani matter. Donohue told the Inspector General that he responded, “Well, it’s
news to me,” and that it was his “impression” that Pesetsky knew how Greene would
vote. While Donohue indicated that he took “anything [Pesetsky] says with a grain of
salt,” he nevertheless described his interaction with Pesetsky to the Chairman. Pesetsky
informed the Inspector General that he never told Donohue that Greene was going to
vote, or how should would vote. Rather, he believed that it was Donohue who had told
him that Commissioner Greene was going to vote, not the other way around. According
to Pesetsky, “if anyone told anyone that she was prepared to vote on that matter on that
day, it would have been Mr. Donohue telling me. I would have had no way of knowing
that.” Greene herself informed the Inspector General that she had told Donohue that she
was prepared to vote on the Cipriani matters, but did not tell him how she expected to
vote. She testified that she did not know Pesetsky and did not meet him until the August
6 meeting.
In his testimony before the Inspector General, Boyle suggested that Greene’s
decision to vote on the Cipriani matters was indicative of some outside influence because
she did not vote on all matters on the agenda that day. Authority records, however,
reflect that Greene voted on 207 of 254 matters before the Authority – more than 80
percent – including six of nine licensing matters and 191 of 235 disciplinary matters.
That Greene abstained from some votes is not surprising, considering the fact that she
commenced work at the Authority only weeks before.
The Board Votes on the Cipriani Matters
At the August 6, 2008, meeting, which was digitally recorded and posted to the
Authority’s Web site, the board voted unanimously to reconsider the Cipriani matters.
Counsel Pesetsky made a brief statement on behalf of the Ciprianis. Chairman Boyle
asked if the other commissioners had any questions, and they did not. Commissioner
Healey then made a statement on the record noting that the Ciprianis had pleaded guilty,
and had agreed to a “substantial” settlement offer to the Authority and to retain a tax
auditor in the future. She also noted her concern about the effect that the revocation of
the Cipriani licenses would have on tax receipts, those employed by the Ciprianis, and
clients who had scheduled events at Cipriani restaurants. Later, in her examination by the
Inspector General, Healey testified that she was also concerned that a revocation would
be overturned on appeal.
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Chairman Boyle also stated his concerns on the record. He noted his belief that
the underlying tax crime and charges of availing were serious, and that it would be
improper “for us to sit here as a board and disregard these kinds of charges – it’s
unbelievable.” He also expressed concern that the Ciprianis were “buy[ing] their way
through the system.” Finally, he asserted his belief that another entity would take over
the restaurants and reemploy those who had been Cipriani employees.
Commissioner Greene then spoke, noting that she had considered “how serious
the charge is,” but also that the Ciprianis were “trying to make concessions, trying to
make things right.” She acknowledged that she did not have the “history of other
applicants who have come forward in similar situations [and could] only judge what is
right in front of [her] . . . .” She also noted her concern about the impact of revocation
upon the Cipriani employees.
For each of the nine Cipriani licensees, after the board granted reconsideration of
the respective matter, Commissioners Healey and Greene voted to accept the settlement
offer and Chairman Boyle voted against doing so. As Healey and Greene formed a
majority, the offers totaling $500,000 were accepted and the licensees were permitted to
retain their respective liquor licenses.
Regional Representative Edwards Contacts Commissioner Greene
During the August 6, 2008, board meeting at which the Cipriani settlement was
accepted by the board, a Regional Representative for Intergovernmental Affairs from
Carl Andrews’ staff, Khari Edwards, contacted Authority Deputy Commissioner for
Intergovernmental Affairs Thomas O’Connor.
While O’Connor was Edwards’ usual contact at the Authority, Edwards made the
unusual request to speak to Commissioner Greene directly. Specifically, at 10:04 a.m.,
Edwards sent an e-mail to O’Connor asking, “Hey Tom what time does the full board
meet today? I need to speak to Commissioner Green ASaP [sic].” At the time, the board
was in session but had not yet voted on the Cipriani matters. O’Connor testified that he
did not ask why Edwards was calling, nor did he inform Edwards that Greene was in a
meeting. Rather, upon receipt of Edwards’ e-mail, he wrote a message to Commissioner
Greene that Khari Edwards from the Governor’s office had called and wanted to talk to
her as soon as possible. The message was delivered to Greene while the meeting was in
progress.
Greene informed the Inspector General that when she read the note directing her
to call Edwards, she had no idea what the call was about. She stated that she was anxious
because she was appearing for the first time in a Webcast, and initially thought that the
Governor’s office might be calling to comment on her screen appearance. She said she
did not know Edwards, and had never heard his name. After a few minutes, she asked to
take a break, and called him. She recalled to the Inspector General that Edwards had said
he was calling to ask about the Ciprianis or to relay a message regarding the Ciprianis.
Greene replied that she could not discuss anything with him. Edwards said, “OK,” and
10

the conversation ended. Greene informed the Inspector General that she did not know on
whose behalf Edwards had called, was furious to have received such a call, and once she
learned that the call related to the Ciprianis, she knew it was inappropriate. Greene told
the Inspector General that the phone call did not affect her vote in any way. The only
effect it had was that it annoyed her because it had interrupted the board meeting, and
embarrassed her in front of the board. Shortly after the board meeting, Greene contacted
Deputy Secretary Hamer to complain about Edwards’ call, and to request that no one
from the Governor’s office call her except Hamer herself. According to Greene, Hamer
agreed. Hamer testified that she remembered receiving a call from Greene about the call
from Edwards, and that Greene was upset. Hamer also testified that, at the time, she did
not know Edwards or why he called.
At 10:47 a.m., O’Connor e-mailed Edwards, “I sent a note into Commissioner
Greene to call you on your cell ASAP.” At 11:00 a.m., Edwards responded, “Can you
call me too[?]” According to O’Connor, when he called, Edwards told him, in essence,
that he had told Greene that “they didn’t care if it was revoked or not, but if it wasn’t
revoked, they wanted to see . . . a substantial or a high penalty.” In his testimony to the
Inspector General, Edwards claimed that he did not recall making such a statement to
O’Connor.
Edwards’ Multiple Explanations for His Actions
The Inspector General interviewed Edwards under oath on multiple occasions,
during which Edwards provided a series of inconsistent explanations as to why he had
asked to speak to Commissioner Greene, and about what he said to her when she
telephoned him. He first told the Inspector General that he did not even know who
Greene was or that a board meeting was in progress; and that he was simply trying to
learn the result of the board’s vote on the Cipriani licensees.
Carl Andrews testified that Edwards told him he had accidentally called Greene:
“He said, “I called over there to find out what's going on. I think they put the
commissioner on the line or something.” Andrews also testified, “I believe he said he
called, he wanted to find out how the Cipriani vote went. . . . He just said he called and
made a mistake. He called the commissioner and he shouldn’t have called because I
think the vote might have been going on at the moment he called or something.”
Andrews testified that he had not discussed the Ciprianis with Edwards before
learning of the accidental call to Greene. Edwards stated that he had spoken to Andrews
about the Ciprianis on only one occasion prior to his call to Greene, and that such
discussion related to a constituent’s question.
Following Edwards’ first examination, however, the Inspector General obtained
the August 6, 2008, e-mails between Edwards and Deputy Commissioner O’Connor
which reflected that Edwards knew who Greene was and that he had specifically asked
O’Connor to arrange for her to call him. In subsequent testimony, Edwards admitted that
he had been untruthful, and provided other explanations as to why he contacted Greene.
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For example, he explained that his urgent solicitation of Greene’s call was due to a
constituent’s call to find out whether the Ciprianis’ licenses would be revoked. 18
Edwards could not, however, explain why the constituent could not wait until after the
vote, when O’Connor – Edwards’ usual contact – could have told Edwards the result of
the board vote. Ultimately, Edwards provided no intelligible, plausible explanation for
soliciting Greene’s call “ASAP.” In fact, when asked if he knew who had called him
about the vote, he testified, “No, sir.”
The Inspector General analyzed Edwards’ phone records from the day of, and the
days preceding the August board meeting and found calls from Andrews’ office
telephone to Edwards. In view of the fact that Edwards worked for Andrews, however,
the Inspector General did not regard it inappropriate or unusual to find such records.
Andrews testified that he did not instruct Edwards to call the Authority to find out what
the vote would be or was; nor to call to see what was “going on” with the Cipriani vote.
Andrews also testified he did not ask Edwards to contact Greene or any of the
commissioners; to intimidate any of the commissioners; or to deliver a message to any of
the commissioners.
Boyle’s Allegations of Retaliation and Reward
In published articles and in examinations by the Inspector General, Chairman
Boyle alleged that he suffered retaliation for not following what he alleged was Andrews’
direction on the Cipriani vote. First, he claimed he was stripped of some of his powers
by a November 6, 2008 resolution that Commissioners Healey and Greene presented and
then voted to approve. Additionally, he claimed that his views on a number of
employment decisions were ignored by the Governor’s office and the other
commissioners. Finally, he implied that a car policy providing automobiles to the other
commissioners was forced upon him by the Governor’s office and constituted a reward
for their votes on the Cipriani matters.
New York’s Alcoholic Beverage Control Law explicitly states that the head of the
division “shall be the state liquor authority which shall consist of three members, who
shall be known as commissioners . . . .” That law also vests the power to appoint
employees with all three commissioners. By resolutions in 2006 and 2007, 19 the board
had delegated certain powers to the Chairman. Authority Counsel Donohue explained to
the Inspector General that some legal and administrative problems resulted from the 2006
and 2007 resolutions. Accordingly, in October 2008, counsel and other senior staff
discussed the possibility of the board passing a resolution whereby all three members
18 The constituent’s daughter, according to Edwards, had made arrangements for her wedding to be held at
a Cipriani establishment and was concerned that the establishment would close.
19 On July 12, 2006, by resolution, the Board delegated to Chairman Boyle “the authority to grant or deny
requests for reconsiderations of prior Full Board determinations and direct that such requests which are
granted be submitted to the Members of the Authority.” Then, on August 22, 2007, because the Board was
spending considerable time considering second and third requests for reconsideration of prior
determinations, a new resolution was passed that, in addition to the previous delegation to the Chairman,
delegated to the Authority’s counsel the power to review repeat requests for reconsideration of such
determinations.
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would once again vote on reconsideration issues. Donohue sent an e-mail on October 14,
2008, explaining to the board 20 and others that he wished to discuss how to address the
issues with the reconsideration mechanism and other problems. Though Donohue was
not aware that Commissioners Healey and Greene were going to place the resolution on
the November 6 board meeting agenda, he noted that it did serve to address some of the
problems that the prior resolutions had caused, and that, at most, it merely served to
reestablish the role of the board as it had existed prior to July 12, 2006. The November 6
board resolution rescinded the prior delegations of power and authority to the Chairman
and restored the original statutory power of the Authority, including the power to appoint
employees, to the full three-member board.
Commissioner Greene testified that she voted on the November 6, 2008,
resolution “to clarify [that] the three commissioners are the head of the agency and it’s
not just the chairman that’s the head of the authority. It’s all three of us. We did not strip
any power according to the ABC law . . . . we had asked that reconsiderations come to . .
. the entire board.” Likewise, Commissioner Healey testified that the resolution “wasn’t
to punish the chairman” and “had nothing to do with Cipriani.” When examined by the
Inspector General, Chairman Boyle noted that not understanding the meaning of the
resolution, he thought that they introduced it merely to retaliate. He conceded, however,
that had the context been explained, the resolution would have been acceptable to him: “I
would have no problem with it whatsoever. They have that right to do, as fellow board
members, to take what was delegated to me, as long as I knew what I was signing on to.”
Boyle also suggested in his testimony that a number of hiring and firing decisions
were forced upon him, constituting another form of retaliation for his having voted
against the Ciprianis. He claimed that, shortly after the May 2008 vote, he had been
forced to accept the appointment of Woody Pascal as chief executive officer, though the
position that he believed the Authority truly needed to fill was that of an additional
auditor. He felt that the Governor’s Appointments Office and Deputy Secretary Andrews
improperly informed him at a meeting that Pascal’s hiring was a fait accompli.
Additionally, he claimed that the two other board members effectively terminated a
number of administrative law judges whom he had hired to ensure cases would move
along smoothly.
The Inspector General reviewed the series of events that led to the hiring of
Pascal, as well as the events surrounding Boyle’s hiring of seven administrative law
judges. According to Deputy Secretary Hamer, the issue of Pascal’s promotion to chief
executive officer arose during the fall of 2008. Hamer testified that either Commissioner
Greene or Healey had expressed an interest in Pascal being more involved, and that he
should be the chief executive. Hamer testified that she responded, in essence, that the
board should vote on the issue. On November 6, 2008, the Board voted to promote
Pascal. Greene confirmed that she had voted for his promotion to chief executive officer,
but stated that her vote had no relation to the Chairman’s position on the Cipriani matters.
20 Donohue testified that he sent the e-mail to Chairman Boyle’s secretary to assure that Boyle received it;
Donohue stated that Boyle does not read e-mails.
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Boyle acknowledged that he has a good professional relationship with Pascal, and had no
“reason to say he’s not doing his job.”
As noted above, all three members of the Authority are required to act on
employment decisions. Despite this shared authority, in mid-2008, Boyle unilaterally
hired seven administrative law judges. Boyle acknowledged to the Inspector General that
he had erred in hiring part-time administrative law judges without bringing the issue to
the board, but felt that the mistake could have been addressed by the other board
members approving the judges’ hiring. According to Counsel Donohue, Commissioner
Greene felt that the process by which the judges had been hired was improper and should
not be endorsed. Similarly, Donohue testified that Commissioner Healey was simply
annoyed that Boyle would not admit that he had been mistaken, and she therefore would
not help correct the problem she felt he had created. In any event, shortly after the seven
judges’ employment was terminated, Boyle submitted a new group of administrative law
judge appointments to the board, and they were approved.
Chairman Boyle implied that, though he had been assigned a state automobile for
work use, Commissioners Greene and Healey were provided state automobiles for their
work use as a reward for their vote on the Cipriani matters. Relevant statutes and policies
reflect that all three Authority members are equally entitled to a state vehicle, not just the
chairman. Boyle ultimately conceded that he could not “make the connection” between
the Cipriani vote and the car policy.
Interpersonal relationships at the Authority clearly played a role in Boyle’s
suspicions of improper influence, particularly the allegations of retaliation and reward.
Many witnesses, including Healey herself, testified that Chairman Boyle expressed
disdain for Commissioner Healey, and that he viewed her as an impediment. Similarly,
Commissioner Greene testified that, while Boyle was initially cordial to her, his attitude
changed dramatically once she expressed disagreement with him on substantive issues.
A number of witnesses testified that, despite statutory authority to the contrary and his
own protestations that he understands the agency’s enabling statute, Boyle acted as if he,
rather than the full board, were the head of the agency.
FINDINGS AND RECOMMENDATIONS
The Inspector General’s investigation did not substantiate Chairman Boyle’s
allegation that Deputy Secretary to the Governor Carl Andrews attempted to improperly
influence Boyle’s vote on the Cipriani matters. The only witnesses to the conversation
between Andrews and Boyle on May 6, 2008, were the two men themselves. Notably,
the critical portion of their discussion amounted to a very brief exchange at the
conclusion of a conversation unrelated to the Ciprianis. The evidence fails to corroborate
either Boyle’s or Andrews’ version of events; nor was either of their accounts less
inherently credible. Based upon this inconsistent sworn testimony and the absence of
other corroborative evidence, it is not possible to conclude what actually transpired at the
end of this conversation or, more importantly, what each participant intended to convey.
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The Inspector General notes that Boyle never expressed any complaint regarding
the May 6, 2008, meeting with Andrews or the May 27, 2008, telephone call, nor alleged
any impropriety about Andrews’ communications until November of 2008. Not only did
he fail to bring such allegation to the attention of the Inspector General, but never even
mentioned it to either of the other commissioners, or Authority staff other than his
secretary throughout the six-month period from May 6, 2008, to November 2008. When,
on May 6, he was asked directly by Authority Deputy Commissioner O’Connor whether
Andrews had advocated on the Ciprianis’ behalf, Boyle chose to say nothing.
The Inspector General determined that Khari Edwards, a subordinate of
Andrews’, inappropriately attempted to discuss the Cipriani matters with Commissioner
Greene. Edwards offered no plausible explanation for his contacting Greene, especially
in the midst of a board meeting. His conduct was improper and incompatible with his
duties. The evidence also establishes that Greene not only swiftly terminated her
conversation with Edwards, but immediately contacted Deputy Secretary Sylvia Hamer
to express her irritation and assure that no further similar calls from anyone would be
forthcoming.
The Inspector General found no evidence that Andrews directed Edwards to place
the call to Greene. While Edwards is the primary source to explain his motivations, his
changing and implausible testimony, all of which was fully investigated by the Inspector
General renders him incredible as a witness. Accordingly, it is impossible to determine
what or who motivated him to telephone Commissioner Greene.
Khari Edwards’ testimony showed him to be immature and irresponsible.
Statements he provided during virtually each interview were subsequently corrected or
repudiated by Edwards himself as inaccurate, misleading, or mistaken. Indeed, although
it was difficult to assign any credibility to his varying stories, each was nevertheless
investigated and found wanting. The Inspector General found Edwards devoid of any
appreciation of the seriousness of the Inspector General’s proceedings.
Following his second interview, Edwards sent an e-mail to the Inspector General
requesting an opportunity to correct the record, noting that, “I was so much trying to get
out of your office to get to my [ill] child that I didn’t absorb what I was saying and
realizing [sic] I was wrong.” Although Edwards’ various statements under oath were not
merely erroneous but reckless, the Inspector General cannot definitely conclude that they
were generated by a desire to deceive. Accordingly, the Inspector General is not
referring this matter to the District Attorney for possible perjury prosecution. The
Inspector General does recommend, however, that his employment with the Governor’s
office be terminated.
The Inspector General has reviewed the actions that allegedly constituted
retaliation against Boyle or reward to other board members, and finds those allegations
unfounded. The Inspector General finds that friction between the Commissioners played
a role in heightening Boyle’s suspicions and in the other Commissioners’ reactions to
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Boyle’s decisions. For example, given Boyle’s negative attitude towards Commissioners
Healey and Greene, it is unsurprising that neither chose to assist Boyle in rectifying his
improper hiring of administrative law judges, and instead waited for the process to
proceed correctly.
The Inspector General finds the allegation that Cipriani counsel Pesetsky knew
that Greene would vote on the Cipriani matters, let alone how she would vote, to be
unfounded. While Greene may have informed counsel Donohue that she was going to
vote on the Cipriani matters, no evidence indicates she told anyone else. No evidence
supports Donohue’s “impression” that Pesetsky knew how she would vote.
The Inspector General finds that Commissioners Healey and Greene were fully
authorized as a matter of law to fine the Ciprianis in lieu of revocation. While a felony
conviction without a certificate of relief from disabilities would have resulted in an
automatic bar to licensure, the certificates in this case provided the Authority discretion
to penalize the licensees instead. The two Commissioners acted within their discretion in
voting to accept an offer of settlement negotiated by the Authority’s counsel about which
the Chairman was aware and voted to reconsider. Finally, the Inspector General
determined that all three commissioners voted freely and independently on the Cipriani
matters.
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