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Audit calls for second criminal probe into former Utah liquor bosses

Published September 12, 2012 7:34 am

Former liquor official Earl Dorius accused of taking gifts, while his ex-boss faces new round of scrutiny.
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Legislative auditors on Tuesday called for a criminal probe into former liquor-control division director Earl Dorius, nearly a year after asking for an investigation of his boss, Dennis Kellen.

The latest examination into the embattled Department of Alcoholic Beverage Control singled out Dorius, the former director of licensing and compliance. Dorius, 65, resigned in March after reports surfaced that he accepted free dinners from a licensee who owns eight establishments, each holding a different liquor permit.

Auditors said they found one $250 gift card from December 2007 that Dorius had cashed, which coupled with other gifts "leads us to believe" that under the Employee Ethics Act, a second- or third-degree felony "may have been committed."

Dorius reportedly told auditors he accepted at least a half-dozen or more dinners, meal cards and other gifts over the years, but "he could not remember" the items in detail, according to the report. Attempts to reach Dorius for comment Tuesday were not successful.

Before joining the liquor agency 22 years ago, Dorius was best known for prosecuting murder cases as an assistant attorney general, including that of convicted killer Gary Gilmore, who in 1977 became the first person executed in the United States a decade after the U.S. Supreme Court had effectively put death penalty statutes on hold. Dorius also contested the appeals of Pierre Dale Selby, executed for his 1974 involvement in the brutal murders of three people inside the Hi-Fi Shop in Ogden.

The report naming Dorius is part of a series of examinations state lawmakers called for after auditors said that former DABC administrators had failed to implement changes recommended in earlier audits.

Utah Democratic Party Chairman Jim Dabakis called the scandals at the liquor department an indication that Utah "is developing a reputation as one of the worst-managed states in the country."

"It is obvious that the Herbert administration and the Republican leadership in the Legislature have lost control of the Department of Alcoholic Beverage Control," he added. "This $300 million-a year-state monopoly has been run off a cliff by the inept management of the governor's political cronies."

Gov. Gary Herbert's spokeswoman, Ally Isom, said information in the audit addressed practices "implemented long before the governor took office. Although the governor has never had direct statutory oversight for the DABC, when mismanagement came to light, [he] called immediately for enhanced oversight over both the DABC and the (liquor) commission."

Last year liquor director Kellen, 65, also resigned, shortly before auditors said he should face criminal charges for his role in steering tens of thousands of dollars worth of state contracts to his son's business and splitting invoices to avoid competitive contracts. The Attorney General's Office, which about a year ago initiated an investigation into Kellen's actions, had no comment Monday other than to say the probe was continuing.

In December 2006, Kellen and Dorius were among 12 liquor administrators and staffers named in an audit for taking retirement, then reclaiming their old jobs while collecting retirement benefits. The audit revealed a pattern of letting liquor workers retire, then hiring them back immediately after their six-month waiting periods expired.

So-called double dippers may earn as much as 170 percent of their pre-retirement salary.

Kellen had collected retirement benefits since 2005. Dorius had collected them since 2000.

Months after the 2006 audit, the liquor board appointed the 30-year department veteran Kellen as agency director without soliciting any other candidates.

On Tuesday. auditors also criticized Kellen's handling of service vendor Scott Doe, whose Murray-based Big Buck Mobile Service did more than $2 million in business with the department since 2003 "without adequate oversight," according to the auditors' working papers.

Auditors said Doe, 62, did maintenance work on most warehouse equipment, such as forklifts, pallet jacks and box crushers, without a contract for more than 30 years. Ten years ago, however, the department issued contracts that may have violated state procurement laws, resulting in overcharges for the costs of labor and parts, according to the report.

Contacted Tuesday, Doe said he had no comment. Attempts to contact Kellen were not successful.

Auditors said the vendor submitted several invoices that may contain fraudulent charges, such as an instance when the department was billed for 20 hours of labor at a Utah County liquor store, which was open — and accessible — for only eight hours per day. On the same day, security tapes indicated the vendor was in the warehouse in Salt Lake City.

Department interim director Salvador Petilos, in a statement, agreed with the audit's call for better oversight and employee training, saying of the 22 recommendations outlined in the report, "we have fully implemented 14, and the other eight are in process."

dawn@sltrib.com

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