Kari Newell is the individual with the DUI that is attempting to get the liquor license and whose information was allegedly obtained illegally, prompting the search.
I'm not sure this is grounds for disqualification. No matter how Ensey decides to proceed against the police I don't think it moves the needle on whether or not Newell gets her liquor license or doesn't, so can't possibly harm or help his family's interests.
EDIT: Maybe the argument that he's biased is that he's inclined to sweep it under the run to keep his family's name out of the paper? That's reasonable.