Liquor license background checks optional, says state AG

‘Draconian’ approval process for nonprofit one-day liquor licenses not mandated in law

The Maui County Department of Liquor Control is the only department regulating the sale of alcoholic beverages in the state that requires nonprofit organization leaders and volunteers to submit to extensive background checks and fingerprinting for one-day events.

The Maui County department has come under fire recently for making the licensing process for one-time events more stringent for nonprofit organizations. Some nonprofit directors say that the new requirements — which include the background checks, fingerprinting, lists of fundraiser auction items and volunteers and their Social Security numbers way in advance of the event — have become so draconian that it is not economically feasible for them to hold their fundraising events.

Department officials have said that they are just following state law, but the state attorney general’s office said Thursday that the department has the option — but is not mandated by law — to require the background checks.

The public outcry against the changes led Kihei resident Madge Schaefer and the Committee for Responsible Liquor Control to expand its lawsuit against the department Thursday to include the nonprofit licensing issue. Her lawsuit, originally filed in May, sought to repeal rule changes approved by the Liquor Control Commission that eliminated the blackout periods for the sale of alcohol, allowed home delivery of alcoholic products and removed the cap on the number of hostess bars.

The commission currently is in the process of revisiting those initial changes.

On the nonprofit issue, Schaefer said that “volunteer nonprofit organization’s boards are subjected to stricter background requirements than the owners of hostess bars.”

Until recently, nonprofit groups filled out a permit application and submitted it to the department, similar to nonprofits in the state’s other counties. That all changed earlier this year when department officials began forcing all board members of nonprofit groups seeking one-day permits to submit to background checks and fingerprinting and to list all employment from age 18 and any traffic tickets of more than $25.

Maui County nonprofit officials have said that they must now list all items in fundraiser auctions and provide a list of all volunteers with their Social Security numbers two months in advance of the event. Additionally, wholesale distributors can only donate alcoholic products for fundraisers held at hotels and restaurants with liquor licenses.

Hawaii County Liquor Control Director Gerald Takase said Thursday that he has been monitoring the Maui County liquor department’s review of one-day events and believes it should revert back to its old policies.

Takase said that his department did away with the background checks for nonprofit events more than 10 years ago and only requires groups to sign an affidavit and affirm that their members have no criminal convictions. He said sometimes nonprofit groups will request a permit Friday for an event that weekend — which would be impossible on Maui.

However, Takase admitted that he does not know whether the stringent procedures employed by the Maui County department are required by state law or not.

“The reason they started doing background checks, as they came out of Prohibition, was trying to prevent the mob from getting involved,” Takase said. “To me, it’s missing the point, but I can’t tell Maui what to do, and frankly, they may be right in their interpretation of the law.”

The Maui County department “may be right, but I think they should try to change it,” he said. “That’s probably the fairer thing to do. We’re not looking at these special licensees and treating them like criminals.”

Kauai County Liquor Control Director Gerald Rapozo said that his department follows the same guidelines as the Big Island when handling single-event licenses for nonprofit organizations. City and County of Honolulu Liquor Commission officials confirmed Thursday that they do not require background checks for nonprofit events.

Rapozo said that he and the other Hawaii county liquor department directors were not given advance notice of the changes for single-event licenses by Maui County officials and have been following the situation in the media. He said he can understand how Maui County officials came to their interpretation of state law.

“That’s the problem. You ask 10 attorneys for an explanation and you get 10 different opinions,” he said.

Nonprofit groups obtain permits through the class 10 special licenses section of the state’s liquor laws, which makes no mention of background checks. However, the “county liquor commissions, criminal history record check” section provides a conflicted explanation.

One part of the rule states that county liquor commissions “may” request a criminal history record check of an applicant for a liquor license while another section states that the liquor commission “shall” obtain criminal history information.

Deputy Attorney General James Walther in an emailed response said that “county liquor commissions are authorized (but not required) to do a criminal history record check pursuant to 281-53.5, HRS.”

Maui County liquor department Deputy Director Mark Honda said Director Glenn Mukai was not available Thursday for an interview. Honda reiterated the department’s position that the background checks for nonprofit groups have been required by state law for nearly a decade.

He also declined comment on the amended lawsuit by Schaefer.

Maui County department officials have attributed the policy change to a trip by a special investigator from the attorney general’s office, who looked into a nonprofit event earlier this year. The trip prompted the department to review the state’s liquor rules and found exemptions to requirements for nonprofit organizations, such as background checks, were repealed by state lawmakers in 2008.

“The easiest cookbook recipe here is to repeal the repeal,” Honda said. “Just let the nonprofits come in without any background checks.”

Honda could not explain why the other counties employ a more lenient process for nonprofit events. He said he has not had time to do research into other counties’ liquor rules.

“I’m almost like a volunteer fireman. I have to help this area to put out a fire and then help another area,” Honda said.

Officials from state liquor departments are expected to meet today on Maui as a part of quarterly directors meetings to talk about bills in the state Legislature and licensing issues. Honda said that the nonprofit issue is not on the agenda, but Rapozo and Takase believe it likely will be addressed.

“From what I understand, they’re going to review what they’re doing and hopefully, moving toward a more reasonable policy,” Takase said of the Maui County department. “If the AG says, ‘No you don’t have to do it,’ I think they would probably back off.”

* Chris Sugidono can be reached at