Expenses documented by Verizon Business and released by the state suggest the telecommunications company bought alcohol for state employees on at least a dozen occasions, even while negotiating a $51.5 million contract to support the state’s vehicle inspections program.

State officials and Verizon representatives won’t confirm whether spirits were part of more than 200 meals the company says it bought for employees and their significant others at the Department of Transportation and the Department of Environment and Natural Resources over the past four years. But per-person expenditures at the bars and restaurants suggest that such beverages were on the tab multiple times.

“[W]e have no further comment with respect to the expenses,” said Verizon’s vice president for media relations, Jack Hoey, when asked by Carolina Journal whether the receipts included alcohol.

According to documentation provided by Verizon (7.2 MB PDF download), the company spent more than $21,000 on gifts for state employees that included a pair of beach chairs, hockey tickets, and health club admissions. The lion’s share of the expenses, though, came from pricey meals at Fleming’s Prime Steakhouse, the Angus Barn, Sullivan’s Steakhouse, and similar upscale restaurants.

Other times, the bill came from establishments that primarily serve alcoholic beverages, such as $273.44 at the Grove Park Inn’s great hall bar in Asheville and $154.80 at the Peabody Hotel’s lobby bar in Orlando.

In many cases, the per-attendee cost was high enough to indicate the tab included alcohol. In September 2008, for instance, two Verizon salesmen treated five individuals, including three state employees, to a $570.48 meal at an undisclosed Mediterranean restaurant. The cost per attendee was $81.50.

In October 2008, Verizon paid $81.14 per person, or $486.82 total, for a meal at Jerry’s Food, Wine & Spirits in Wrightsville Beach. A year before, the company paid $59.88 per person for a meal at Jake’s Famous Crawfish in Seattle. Last April, the company picked up the bill for an $84.64 per-person trip to Truffles restaurant.

In other instances, a comparison of per-attendee cost with the average price of a dinner entrée indicates that drinks were likely included on the bill.

On Oct. 17, 2007, three Verizon employees paid $38.89 per person for a meal at BJ’s Brewhouse, where dinner tickets average $15 a plate. The day before, the company picked up a tab of $38.79 per attendee for a meal at Chevy’s, a Mexican restaurant with dinner entrees ranging from $9 to $15.

Not all meals were that high. Some were from fast food restaurants, pizza shops, delis, cafes, or grocery stores. But the costs still have open-government advocates incensed.

“You could have three entrées, dessert, and leave a big tip, and still not come close to $80 a person,” said Mike Munger, professor and chair of the Department of Political Science at Duke University, in response to e-mailed questions from CJ. “Clearly, what happened was that a private company bought a lot of drinks for state employees, and the payoff was the misuse of public funds for a no-bid contact.”

The State Bureau of Investigation is probing the expenses. DENR is conducting an internal review as well, said spokesman Jamie Kritzer. DMV Commissioner Mike Robertson told reporters that his agency plans to conduct an internal investigation following the SBI’s criminal probe.

Verizon has fired four employees and taken another one off North Carolina’s account, said Hoey. “We are not providing any further details, other than the discipline was appropriate based on our investigation,” he said.

Similar to Verizon’s media representatives, press officers for DMV and DENR declined to say whether their employees accepted alcohol.

“What I’ve learned is alcohol was available at some of these events. That’s according to the documents I sent you,” Kritzer said. “I don’t know what was consumed, or if it was consumed by our staff.”

DMV spokeswoman Margaret Howell said her office has no additional records. “The only ones that we have are the ones that have already been released,” she said. “Since this is an ongoing investigation, that is all I know to this point.”

Footing the bill

The most expensive ticket was from the Capital City Chop House in Raleigh, according to the documents prepared by Verizon. Two Verizon employees treated 15 state employees to a $1,021.18 meal there on June 26, 2008. The meal came just days after DMV awarded a multi-million dollar contract to Verizon.

Bonefish Grill, a seafood chain restaurant, was the most frequented establishment. Verizon employees requested reimbursements for seven different occasions in 2008 during which they spent a total of $2,240.21.

Many of those tabs came in September 2008, when Verizon staff paid the bill for $1,363.36 spent at Bonefish.

Records indicate that Verizon staff spent $428.24 at venues where alcohol is the primary menu item. Alcohol is also available at most other restaurants listed on the documents.

State Sen. Eddie Goodall, a Union County Republican, said that it would be unusual in the business world for companies not to offer those entertained a choice of beverage.

Asked why Verizon and the state agencies involved would decline to specify whether alcohol was on the tab, Goodall said, “I don’t know why they would refuse to answer that question.”

Munger said the meals were not recreational and were instead tied to Verizon’s business interests.

“These were meals purchased by a for-profit company for the purpose of influencing the judgments of state employees about the use of taxpayer funds. How dare state agencies refuse to disclose what was actually purchased,” he said.

Perdue steps in

It’s illegal for state agencies to use taxpayer funds to reimburse for alcohol. Until recently, restrictions on state employees accepting alcohol or other gifts from companies that conduct business with the state were limited to those directly involved with third-party contracts.

But on Oct. 1, shortly after news of the Verizon reimbursements broke, Gov. Bev Perdue signed an executive order extending the state’s gift ban to all executive branch state employees.

Former Democratic Party consultant and government watchdog Joe Sinsheimer told CJ that Perdue’s executive order “was a welcome baby step,” but that the governor should go further by firing the DMV employees involved.

“Firing workers would send a strong message that this type of behavior is unacceptable,” he said.

The State Department of Transportation already has an ethics policy that prohibits employees from accepting gifts or favors “in return for being influenced in the discharge of the employee’s duties and responsibilities.”

Kritzer said that none of the DENR employees listed on the Verizon documents were tied to the contract and therefore would not have fallen under the original gift and favor restrictions in state law. He added, though, that said DENR would abide by Perdue’s executive order.

David N. Bass is an associate editor of Carolina Journal.