The events in Montgomery County that have come to be known as Liquorgate began with a newspaper article last summer detailing questionable purchasing practices and a revolving-door pattern at the Department of Liquor Control. Today, the story involves more than the buying and selling of liquor.
At issue now, along with the workings of the nation's only county-run liquor wholesaling operation, are charges that County Executive Charles W. Gilchrist and his top aides attempted to placate a persistent critic by offering him various government jobs without going through the required merit system. The two matters were separate and distinct at first, but in recent days they have merged into one sweeping affair that has thrust Montgomery County, with its quiet, Good Government image into the unlikely realm of scandal.
The story now involves a grand jury investigation, revelations of secret tape recordings of important conversations, and a test of wills between the beleaguered Gilchrist administration and Leonard I. Colodny, who in every sense is the man in the middle of it all. It was Colodny who claimed he was offered the merit jobs. And it was Colodny who helped raise the questions about the county liquor agency.
The seeds of the controversy were sown years ago when a network of men began to move back and forth between the government agency and the private liquor industry, dominating the county's $60-million-a-year liquor system, often to the benefit of the private companies to which they were tied. This pattern went largely unnoticed until last year when the Gilchrist administration hired Frank Orifici to serve as deputy director of the liquor control department. Orifici was a former salesman for Schenley Industries Inc., a New York-based liquor firm that gets an inordinately large amount of business from the county agency.
The fact that Orifici would be buying liquor from his old firm sparked some questions from the press. Then it was revealed that Orifici was also related by marriage to Charles Buscher, a 63-year-old liquor patriarch who had served at times as a top Schenley executive, once as the liquor agency's boss and most recently as an adviser to Gilchrist on agency matters.
Soon Gilchrist discovered that the Washington Post was investigating the Schenley connection, and in an effort to head off the reporter, Gilchrist last May hired former liquor wholesaler Leonard Colodny to conduct a study of the department's purchasing practices.
"That," Gilchrist would later say, "was my first mistake." And indeed, the hiring of Colodny would come back to haunt the normally low-keyed county executive.
In July came the Post article, alleging that the way of doing business in the liquor control agency was marked with apparent conflicts of interests and favoritism. The article chronicled a revolving door pattern in which a network of men moved back and forth between top jobs in the agency and positions in the liquor industry.Most of the connections pointed to Schenley, a company that has had extraordinary success in selling alcholic beverages to the county.
The same month Colodny released a report also pointing to Schenley's inordinate share of the county market.
But it took until Aug. 5 for the controversy to explode. On that day Colodny called a press conference and charged that Gilchrist's top aides had ordered him to change his conclusions. He said he was resigning his post as consultant.
Gilchrist, in a his own impromptu press conference that became so heated he flung a pen across his office, denied that he or any of his aides had asked Colodny to "rethink" his figures, as the consultant had charged. But he admitted that he disagreed with Colodny's major findings.
After three days and another set of Colodny blasts, Gilchrist accepted Colodny's resignation, and soon after, a county official was appointed to take over the investigation. But then it was revealed that this official had had to close contact with key liquor industry figures in the investigation, and yet another county attempt to stem the tide of scandal came to an abrupt end.
In mid-October, the controversy seemed to sputter away, but early this month a county grand jury began subpoenaing liquor agency documents and also called Colodny to testify.
Then came a strange and startling twist, one that added a new dimension to the suddenly sweeping affair. Last Monday, Colodny charged in a sworn deposition that two top Gilchrist aides offered him various government positions in violation of county merit system laws. It was Colodny's contention that the job offers were in effect attempts to keep him quiet. These alleged job offers came long before Colodny was hired as a consultant in the liquor investigation. In fact, at the time the jobs were said to be offered, the liquor controversy had not yet erupted.
Why, then, would anyone in the Gilchrist administration want to placate Colodny at that time? Colodny claims that it was because he had then been seeking a high-level position in the liquor agency and had been promised by Gilchrist that he would get it. According to Colodny, Gilchrist and his aides backed away from the promise at the advice of state comptroller Louis Goldstein, an old adversary of Colodny. Since Gilchrist and his aides had decided they could not give Colodny the high-level job he desired, according to Colodny, they attempted to get him off their backs by offering him lesser jobs in the county government.
On Tuesday of this week, Gilchrist acknowledged that his aides had talked to Colodny about working for the county, but denied that they had actually offered him the jobs -- which would have been violations of county law.
One day later, Wednesday, secret tape recordings of four telephone conversations showed that the aides had indeed offered Colodny the jobs, according to informed sources.