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Liquor agency accuses Volinsky of conspiring with union boss to stage shady booze buy

New Hampshire Union Leader

April 21. 2018 8:22PM
Executive Councilor Andru Volinsky (with hat) and Richard Gulla, president of the N.H. State Employees Association, are seen on Feb. 3, 2018, in surveillance footage strolling the stockroom of a Keene liquor store. 

Boxes of Gordon’s Gin await “Eric” for pickup at a Keene state liquor store. Executive Councilor Andru Volinsky says this photo proves his bootlegging allegations. (ANDRU VOLINSKY)

CONCORD - The New Hampshire Liquor Commission is accusing Executive Councilor Andru Volinsky of conspiring with a state union president to engineer a questionable cash purchase of liquor in Keene.

Volinsky, D-Concord, called the allegation "ridiculous" and said the sale he witnessed of $24,000 of Hennessy cognac to an out-of-state couple at a Keene store last February was not staged.

The sale is central to charges Volinsky lodged with Attorney General Gordon J. MacDonald, accusing the NHLC of deliberately looking the other way and encouraging large cash transactions so buyers can legally avoid disclosing purchases to federal tax authorities.

The councilor said commission practices make it easy for bootlegging to occur, where out-of-state residents buy lots of liquor with cash, bringing the liquor back to their home states for resale or simply to avoid higher excise taxes.

The commission responded to Volinsky's complaint with a 110-page report that concludes all his accusations are groundless.

"The NHLC strongly disagrees with the councilor's contention that the employee who conducted the sale should be treated as a whistleblower," wrote Rosemary Wiant, legal counsel to the Liquor Commission. "It is the employee's own actions that violated explicit NHLC policies governing the processing of large cash sales and restricting access to secure store areas."

Volinsky remained confident MacDonald's office would see his complaint has merit.

"I see a very significant economic driver for state government that doesn't get it and is missing both opportunities to maximize profits, and doesn't see that it is really being used as kind of a patsy for the bootleggers who run these periodic routes throughout New Hampshire," Volinsky said.

The commission in its report insists Volinsky can't prove his charges.

"The councilor's allegations are not supported by fact, policy or practice," the commission wrote.

"In addition, some sales are for large quantities of wines and spirits, and some of those sales are paid for with cash. Contrary to the councilor's assertion in his lead document heading, however, such sales are indeed legal and the councilor points to no law or authority that would suggest otherwise."

Federal tax authorities require all those purchasing liquor for $10,000 or more in cash to fill out a disclosure form.

Volinsky said he saw employees permit the couple he cited in his complaint to break up a large purchase of Hennessy so that each buy would be below the $10,000 reporting threshold.

But in the commission's response, Wiant said Volinsky and State Employees Association (SEA) President Rich Gulla recruited the employee who carried out the improper sale.

"Councilor Volinsky attended an SEA chapter meeting a few weeks prior where the Keene store employee volunteered to coordinate a large volume transaction at his store," the commission said.

"The Keene store employee had recently returned to his job following a six-month leave of absence that was requested by SEA President Rich Gulla and paid for by the SEA."

Since Volinsky's report, that person has been fired from the agency. SEA and commission officials refuse to comment on the matter, saying it's a personnel issue.

"The true whistleblower here is the employee who alerted the NHLC to the unusual activity and procedural violations she witnessed by the manager in charge and his guests," Wiant wrote, referring to Volinsky and Gulla as the "guests."

Volinsky told the New Hampshire Sunday News he went to the store based on one tip about a large cash sale and instead saw a different one. Someone named Eric put in a large order for pickup and that brought him to the store, Volinsky said.

"I went to the store to see it carried out, but Eric was late and didn't show up until after I left," Volinsky said.

"Meanwhile, a woman named Ana had called in that she, too, wanted to make a bootleg purchase and that's the one I witnessed. This notion that I somehow engineered this bootleg sale is simply ridiculous and they know it."

Volinsky took photographs of the cases of liquor set aside in the storage room for "Eric," several having his name written on them so liquor store employees wouldn't restock those bottles before they were picked up.

"The personal attack is to be expected. It is unfortunate but predictable with the Liquor Commission," Volinsky said. "This ignores the fact this has been a documented problem for more than a dozen years."

The commission noted it's taken action several times in recent years against employees who failed to properly follow the policy regarding large cash sales.

But Volinsky said employees aren't trained adequately on how to prevent the breaking up of large cash sales.

"For their response not to include anything about how to detect related cash sales is a pretty clear indication they don't train or have a vigorous compliance program on that topic," Volinsky said.

Crime, law and justice General News State Government Concord Keene

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