Alcohol board's former manager is sentenced

The former office manager for the Utah Department of Alcoholic Beverage Control (DABC) was sentenced Friday to 150 days in jail and ordered to repay the $131,541 that auditors say he stole from state coffers.

But the manager claims others at the DABC benefited from a lax fiscal climate in the department.

Richard Warren Pearson, 62, was sentenced by 3rd District Judge J. Dennis Frederick on second-degree felony counts of misusing public money, theft and communications fraud.

Afterward, defense attorney Thomas Rasmussen told The Tribune that DABC director Kenneth Wynn and deputy director of operations Dennis Kellen knew of, and participated in, the questionable use of department money.

"Dick has taken the fall for everybody at DABC," Rasmussen said. "There were a lot of shenanigans going on there. And it starts at the top with Ken and Dennis."

Pearson claimed in a rambling 17-page report sent to state investigators that it all started because Wynn wanted a fitness facility for employees. He said Wynn told him to figure out how to finance a gym and "to do whatever I needed to get it done."

According to an Office of the State Auditor investigation sparked by Pearson's criminal actions, state funds were used inappropriately to fund DABC's gym. The audit also identified problems with a vending machine account, as well as a petty cash account established by Pearson.

"There were many inappropriate disbursements both to [Pearson] and to others out of the [petty cash] account," according to the audit report, dated Jan. 16, 2004. Auditors cited improper handling of some department finances between January 1999 and May 2003, but found that no cash receipts from alcohol sales were misappropriated.

Auditors said fiscal controls at DABC were either lacking or not followed. The DABC inappropriately sold obsolete equipment rather than turning it over to the state Division of Surplus Property. And employees were allowed to purchase items or services from state vendors using DABC accounts.

"It is very concerning to us that various employees were aware of certain procedures that we determined to be improper, but either did not recognize them as improper or did not feel comfortable questioning them," auditors wrote.

In response to the audit, DABC officials claim they have made sweeping changes, including hiring a new financial director with extensive government auditing background, closing the petty cash account and offering to turn the vending machines over to the Division of Services for the Blind and Visually Impaired.

The State Bureau of Investigations reviewed Pearson's report and allegations that top administrators at DABC knew of the fiscal improprieties.

But SBI's chief investigator for financial crimes, Jim Vaughn, said Friday that former bureau chief, Major Stewart Smith, determined the alleged violations were "more like violations of departmental policy, or unethical or inappropriate behavior."

Pearson's report -- which also accused Wynn of treating the department like his own fiefdom, intimidating employees and making sexist comments about women -- was then forwarded to State Alcoholic Beverage Control Commission Chairman Nicholas Hales.

Hales said Friday the commission is conducting its own ongoing investigation, adding that Pearson's comments should be viewed from the standpoint as coming from someone just sentenced for a crime.

Wynn said most of the allegations in Pearson's report were "untrue and outright lies" and denied Pearson's assertion that he browbeat employees into taking care of his personal needs. "I wish you would interview other employees," he said. "I don't think that you'd find that I am an intolerable dictator."

He admitted to drinking too much several years ago and making inappropriate comments about female employees' figures. "It was six months after my wife died in 1999. I was fighting my own demons," he said.

Pearson's criminal troubles came to light last spring when Wynn challenged him about DABC funds that were diverted to cover $25,777 for embroidery and clothing orders for Sparta United Soccer, an organization for which Pearson was a volunteer coach.

Pearson was placed on administrative leave in June, and he subsequently retired.

Prosecutor Clark Harms said Pearson should be able to repay the stolen money during his 36-month probation period. Harms said Pearson and his wife earn $14,000 per month, which includes Pearson's military and state retirement benefits.

And this is the commission that arrogantly dictates to the masses what is right and what isn't while making arbitrary decisions with no oversight.

There should be some investigation as to why problem establishments, including gay bars, with numerous agregious law violations have been having their liquor licenses renewed while certain restaurants in Roy and Clearfield have had their renewals denied even though they have spotless records going back 15 years. It's pretty obvious that Richard Pearson and other members of the ABC board are not above taking kickbacks.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.