Did Cannon influence alcohol permits?

aalexander@charlotteobserver.com frkelly@charlotteobserver.comMarch 27, 2014 

For many restaurants and nightclubs, getting a permit to serve alcohol can be a make-or-break proposition.

That, experts say, may explain some of what former Charlotte Mayor Patrick Cannon allegedly told an undercover FBI agent who claimed he wanted to open a nightclub in Charlotte.

According to a federal affidavit, Cannon accepted money from the agent “in exchange for future help with permitting, zoning and/or ABC (Alcoholic Beverage Control) issues.” Arrested by the FBI Wednesday, Cannon is accused of accepting tens of thousands of dollars in bribes.

It’s unclear whether other city officials are suspected of wrongdoing. In a statement issued Thursday, City Manager Ron Carlee said that if any “questionable activities are uncovered, we will act swiftly and take steps to ensure they don’t happen again.”

Nationally, the alcohol permitting process tends to attract corruption because liquor licenses are so valuable, said public corruption expert Peter Henning, a law professor at Wayne State University in Detroit.

“You build your business around (alcohol permits),” said Henning, who wrote a 2011 book about public corruption. “… And there’s a great deal of discretion in giving them out. That’s why some (mayors) can help grease the skids.”

The power over permits

In North Carolina, local officials don’t have the final say on which restaurants and clubs get alcohol permits. That lies with the state ABC Commission, which is overseen by a three-member board appointed by the governor. The commission’s staff decides whether to approve permit applications.

But local government officials must fill out “opinions” saying whether they approve of the applicant and the location. Locally, that job falls to the Charlotte-Mecklenburg Police Department’s ABC unit.

On its website, the CMPD says it conducts extensive background checks when considering permit applications. Among other things, the department investigates: the applicant’s arrest history and driving record; the history of 911 calls for service at the proposed location; the amount of crime nearby; and a survey of the neighborhood surrounding the location.

That investigation can take longer than 15 days, the department’s website says. While the local opinions aren’t binding, the N.C. ABC Commission takes them seriously, said commission spokesman Agnes Stevens.

“There are 100 counties in the state, so we do rely on (the local opinions) as a reflection of what’s on the ground in that community,” Stevens said.

The Charlotte City Council oversees the police department and votes on the budget that provides the bulk of its funding. Cannon chaired the City Council’s public safety committee before being sworn in as mayor last year.

A CMPD spokesman declined to let the Observer interview the head of the department’s ABC unit. But in an emailed response, a city spokeswoman wrote that CMPD follows state guidelines and weighs public safety and community impact when completing its opinion forms.

Costly delays

Those who apply for alcohol permits also must show their buildings are in compliance with local zoning, building and fire laws.

Matthew Pera obtained an alcohol permit for Lumiere, an upscale restaurant that opened recently in Charlotte’s Myers Park neighborhood.

Pera said the process can be frustrating because CMPD’s background checks take so long. In the meantime, he said, owners must meet payroll and pay rent, but can’t open their establishments.

“If you had a good contact in CMPD, they could say ‘Can you push this to the top of the stack,’ ” Pera said. “You’re opening quicker.”

Pera said some places could open without the permit, but “that's crazy” because restaurants operate on relatively small profit margins. For some, he said, alcohol is responsible for up to 40 percent of profits.

Locally, alcohol laws are enforced primarily by the state Alcohol Law Enforcement section – a division of the state Department of Public Safety – and by officers from the Mecklenburg County ABC board.

Alexander: 704-358-5060

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