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Wednesday, May 1, 2013

Liquor enforcement chief echoes claims that $200 million liquor contract was steered away from Law Warehouse

NASHUA – The former head of the state’s liquor enforcement division, worried that the bidding process on a 20-year, $200 million contract was tainted by dislike for Nashua warehouse owner Brian Law, recommended that the liquor commission hand over negotiations to a neutral third party.

Eddie Edwards told lawyers in a sworn deposition that there was a persistent “energy” among the Liquor Commission and some staff members to award the lucrative contract to a new company because Brian Law, owner of Law Warehouses, had a sense of entitlement. ...

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NASHUA – The former head of the state’s liquor enforcement division, worried that the bidding process on a 20-year, $200 million contract was tainted by dislike for Nashua warehouse owner Brian Law, recommended that the liquor commission hand over negotiations to a neutral third party.

Eddie Edwards told lawyers in a sworn deposition that there was a persistent “energy” among the Liquor Commission and some staff members to award the lucrative contract to a new company because Brian Law, owner of Law Warehouses, had a sense of entitlement.

“I just thought from an ethical standpoint it was inappropriate to have people on this review committee that had these kind of thoughts and conversations and guidance,” he said.

Law Warehouses has sued the state to block the contract that was awarded to shipping giant Excel. The liquor commission’s decision effectively kills a decades-long relationship that the prominent Nashua business has had with the state. Law charges that the bidding process was “tainted by unlawful favoritism from the start.”

Preliminary arguments will begin in Hillsborough County Superior Court in Nashua on Wednesday morning.

In an earlier meeting with attorneys, former Commissioner Mark Bodi told lawyers the two other commissioners – Chairman Joseph Mollica and Michael Milligan – were committed to steering the contract away from Law because they thought Law felt entitled and was gouging the state, according to Bodi’s sworn deposition.

“They did not believe that Brian Law was worthy of having the contract, and the liquor commission should not award it to him. That was their views,” Bodi said, according to the deposition transcript.

Edwards told attorneys he heard similar sentiments during senior staff meetings.

“Brian Law was not high on the commission’s appreciation scale, if you will,” Edwards told lawyers representing Law and the state. “He was not someone they enjoyed doing business with, I guess.”

Edwards said he told senior Liquor Commission officials to stop the bidding process and restart it under a third party’s oversight “because you’re not being fair to Brian Law or anybody else in the process,” according to the deposition.

Edwards also met with former Attorney General Michael Delaney about his concerns about lobbying and was “shocked” there was no follow-up investigation, he said during the deposition.

In the deposition, Edwards claimed there had been concern among commission staff that the warehouse contract was going to result in the agency’s controversial relationship with a lobbyist going public.

Nearly two years ago, the State Liquor Commission hired Clark Corson to do a $30,000 study into the feasibility of selling warm cases of beer at state liquor stores. At the time, Corson was a longtime lobbyist for the beer wholesalers.

Edwards and Mark Bodi accused Corson in 2012 of lobbying for the agency against a bill to allow retail grocery stores to sell liquor.

The House of Representatives passed that bill, but the State Senate killed it.

Corson, who has since retired as a lobbyist, insisted that he wasn’t working for the Liquor Commission on legislation but for his client, the beer wholesalers, who opposed having beer compete with liquor sales at retail stores.

In the deposition, Edwards maintains that Liquor Commission employee John Bunnell told him if Brian Law got the warehouse contract, this “Corson matter” would just go away.

Former House Speaker William O’Brien, R-Mont Vernon, created a special study committee to look into Corson’s activities and other issues at the commission. Gov. John Lynch and the Executive Council also ordered Attorney General Michael Delaney to investigate the matter.

Delaney ultimately found that there was no evidence the liquor commission had broken a state law that prevents state agencies from hiring lobbyists.

Neither Edwards nor Senior Assistant Attorney General Mary Ann Dempsey immediately returned phone calls left late Tuesday afternoon.

The Liquor Commission signed with Excel in November. Law Warehouses is asking the court to order the project be rebid, and accused the liquor commission of giving Excel unfair advantages throughout the bidding process because the commission was determined to end the state’s long-standing relationship with Law.

Scott Lyons, Excel vice president of business development operations, said the commission’s competition was thorough and objective. He denied that the firm had any leg up on its competitors. Lyons said the company is on track to complete construction of a 240,000-square-foot warehouse that will be ready to take over when the contract calls for it to get the warehouse business this September.

Excel, a Westerville, Ohio-based company, is a wholly owned subsidiary of DHL Express. The firm paid fines to federal officials for its use of workers at a Pennsylvania location, but Lyons said it is now fully compliant.

Joseph G. Cote can be reached
at 594-6415 or jcote@nashua
telegraph.com. Also, follow Cote
on Twitter (@Telegraph_JoeC).