New York: More to Come?

More than 100,000 bars, restaurants and package stores come under the supervision of the New York State Liquor Authority. It can grant licenses, or refuse to grant them, or take them away; a liquor-store owner cannot even move to a new location without permission from the authority. Booze is big business in New York: a Manhattan package store can easily gross $1,000,000 a year. With that kind of money at stake, the Liquor Authority, with its 358 lowly employees, is a likely school for scandal. And as of last week, scandal was busting out all over.

It began last fall, when Manhattan District Attorney Frank Hogan, having investigated complaints that authority inspectors were shaking down licensees and applicants, ordered a grand jury investigation. The first witness called was Liquor Authority Chairman Martin Epstein, 70, a Brooklyn political hack who was appointed to his $24,000-a-year post by Governor Nelson Rockefeller in 1960. Epstein, a diabetic whose left leg was recently amputated, was carried before the grand jury on a stretcher. He refused to waive his immunity (a sort of backdoor way of taking the Fifth Amendment), which is grounds for dismissal under the state constitution. Rockefeller fired him and appointed Donald Hostetter, 54, an ex-FBI man, to take his place.

Two of Epstein’s Liquor Authority investigators, Ernest Moss, 39, and Maurice Bernstein, 36, also refused to waive immunity when called before the grand jury. Both were later indicted on charges that they tried to extort $1,000 from the owner of a West Side bar. Two weeks ago, Moss threw himself under a subway train and killed himself.

The biggest name yet to enter the investigation is that of Lawyer L. Judson

Morhouse, 48, New York State Republican chairman and one of Governor Rocke feller’s top political advisers. Morhouse had never been a member of the Liquor Authority, and it remained unclear as to just why the grand jury wanted to question him. In any event, he too refused to waive his immunity. Shortly before that, he resigned not only from his Republican Party post but from his state jobs as $17,000-a-year vice chairman of the New York State Thruway Authority and un-salaried chairman of the Lake George Parkway Commission.

Rockefeller came lukewarmly to Morhouse’s defense, urged that he not be judged by the public until all the facts were in. Morhouse seemed in no hurry to provide all the facts, and his refusal inevitably led to reports that bigger and better scandals were about to burst.