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In Rare Move, Executive Council Denies Pay Raises for Liquor Commission Management

Todd Bookman/NHPR

A seemingly routine request for a pay raise led to a tense meeting on Wednesday at the State House in Concord, as high ranking employees from the Liquor Commission faced blunt questioning about their performance, and whether they deserved a 5 percent increase in salary.

To understand why the Executive Council meeting turned contentious, however, you have to first roll back the calendar to last February, when Democratic Executive Councilor Andru Volinsky accused the Liquor Commission of turning a blind eye to “bootleggers” who buy huge quantities of Hennessy cognac and then resell the liquor in other states.

[You can find NHPR's previous coverage of this story here.]

Liquor Commission Chairman Joseph Mollica denied violating any laws, and said he was doing what the legislature requires him to do: make money the State relies on for its budget.

So with that backdrop, the stage was set for this meeting of the Executive Council--on the agenda, a 5-percent pay raise for Mollica and his three top deputies, with Volinsky getting to ask questions and cast a vote.

Mollica, who has been chairman since 2010, made his pitch for the raise, in part, by talking up steady sales growth at his liquor stores.

“I think the proof is in the pudding, Councilor,” he told Volinsky. “Look around at what we’ve done in the past eight years, and look at the stores, and the numbers that we have now.”

But Volinsky wasn’t interested in hearing about sales. He wanted Mollica to explain why profits, which get transferred to state coffers, were flat for the Liquor Commission during the past few years.

“I’ve heard you report big increases in gross sales. I’m concerned with the net profits from liquor operations being essentially flat or downward,” said Volinsky.

Along with those flat profits, Volinsky also lobbed criticisms about a long-delayed new software system at the Liquor Commission, the agency’s delayed launch of mail-order wine sales, and why leadership is spending so much cash refurbishing old stores.

Point by point, Mollica had a response. He spoke about how competition from low-cost retailers, something on the horizon for years, is siphoning off customers from Massachusetts.

“They have pretty much wreaked havoc in New England with the liquor business,” said Mollica, referring to Total Wine, a national chain of big box outlets.

And as for why the Liquor Commission failed to meet its revenue targets set by the Legislature in recent years? Mollica says those targets are overinflated.

That response didn’t sit well with Volinsky, who rhetorically asked if that meant that Mollica believed that the New Hampshire Senate “fudged the numbers” during its last budget cycle.

That line of questioning prompted an interruption from Governor Chris Sununu, who presides over the Executive Council meetings.

“That is not appropriate what you just said,” said a visibly agitated Sununu.

He chided Volinsky, who is himself reportedly considering a run for governor, for his use of the term “fudge,” as if there was something underhanded going on.

“The implication that you are making right there, is completely not appropriate,” repeated Sununu.

Volinsky countered that he was only trying to point out that the legislature’s goals are realistic goals, from his perspective, and that Mollica’s excuses ring hollow.

During the meeting, Mollica defended his business acumen, his 25 years as an entrepreneur, and his vision for how to combat encroachment from Total Wine.

But it wasn’t enough to convince Volinsky that he had earned a pay raise, which would put his salary at about $125,000.

Volinsky voted with fellow Democrats 3-2 to delay a vote on the raise until audited financial results are released in the fall, or possibly next winter. Republican Councilor Russ Prescott called the move “unreasonable,” and suggested he was too upset by Volinsky’s actions to properly respond. The governor also appeared furious.

But after the meeting, Volinsky stood his ground on the pay raises. He thinks Mollica has failed to bring the right technology and the right people to the agency. He says the dispute over bootleggers was a side issue.

“No one on the leadership team has outside experience relative to what they are doing,” he said.  “Commissioner Mollica was a restaurateur. That gave him some exposure, but he wasn’t running a $700-million a year enterprise, which is what liquor is in New Hampshire, and he hasn’t brought in people with that experience. That’s a concern.”

It’s been a year since this spat between Volinsky and Mollica broke open, and it looks like things are only getting more tense between these two officials.

Todd started as a news correspondent with NHPR in 2009. He spent nearly a decade in the non-profit world, working with international development agencies and anti-poverty groups. He holds a master’s degree in public administration from Columbia University.

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