The Middletown Press reports that Giuliano put Patrick McMahon on a 30-day paid leave after learning he gave conflicting statements about the drinking allegations.
The mayor said McMahon let him and the police department down, and he withdrew his appointment of McMahon as chief.
McMahon said he did not drink alcohol during the incidents in question. He said he purchased a soft drink for himself and a beer for a firefighter.
But he said he was not entirely accurate with the mayor, saying that on at least once he had more than a club soda while he had his badge and gun. McMahon insisted he never lied.
In just a few days, McMahon's neighbors may get him his job back, along with a promotion.
That's because McMahon has his name on the ballot on November 8, in a referendum to make his appointment permanent.
