Great New Profit-maker for the PLCB!

Great news! As reported here on Philly.com, and in more detail here from the Justice Department's own website, four companies have been ordered to pay a total of $9 million in fines for their role in the unethical practices of three PLCB officials: P.J. "PJ" Stapleton, Joe "Da CEO" Conti, and James "Fall Guy" Short. It took over four years, but they're paying, and even when you're selling booze to a monopoly that doesn't care about its customers, that ain't chump change.

We were glad to see this, since we fully support telling the truth and stating facts, even if they don't necessarily make the PLCB look bad. That's not our main mission: our main mission is proving that the current system is outdated, not good for customers, and yes, naturally prone to corruption and abuses like this. We were also glad to see that our friend (no, he doesn't know it, but he is, just like Joe "Da CEO" Conti was) James "Fall Guy" Short still hasn't been sentenced almost two years after his conviction on fraud charges. Hmmmm...wonder why that is? Bet a lot of current and former PLCB employees are wondering too.

Dat's a right: Malocchio!

Anyway, the Philly.com comments gang — usually a heap of steaming crap; angry steaming crap — managed to come up with a great idea related to this! Check this out from a genius calling themselves Malocchio: "Maybe this can be a new revenue generator for them... entrap their vendors into giving gifts, then assess confiscatory fines against them... instant profit!"

Brilliant. In fact, too smart for the PLCB. It would all fall apart shortly after the gifts were received...and the employees spent them and asked for more. Hey guys! Remember the "entrapment" part? The trap's gotta spring! Guys? Guys?

End the corruption. Privatize now. Not after more "studies," not after more "hearings," not with all the states where privatization works to look at. 

PRIVATIZE NOW. In fact, right now would be a GREAT time: swap the Democrats a fracking tax for full and immediate privatization. Get what we want, balance the budget, and chances are good no one would really even notice the frack tax. Let's do this, PA Legislature, the citizens are waiting.

WASHINGTON STATE GOES PRIVATE!

Yesterday, Washington State voters resoundingly voted YES (looking like over 60% in favor) to privatize the state's liquor wholesale and retail operations. All liquor sales in the state will be private by June 1, 2012. Costco spent about $20 million supporting Prop. 1183 (for privatization), a spend that has been smeared as "buying the election" by anti-1183 groups. This ignores the fact that the Wine & Spirits Wholesalers Association spent over $12 million trying to defeat it. So...don't accuse the winner of "buying the election" when what really happened is that you were trying to buy it...and got outbid.

So, congratulations to the people of Washington on your wise choice and your victory! And...what's it mean for us? This definitely puts an intangible momentum behind privatization in PA; another state did it, and the sky hasn't fallen in. But tactically? It doesn't mean much. We don't have a Costco willing to step up and fund a campaign for privatization...and even if we did, it's not as simple as that. Because we have to work with the Legislature, and they've been thwarting the public's will on this for years.

Think about it. The polls consistently show the voting public in favor of privatization by a 2:1 margin, yet the Legislature still argues over whether they should even be thinking about it. They twiddle and diddle and talk about the PLCB's "modernization" plans, and the revenue, and the union, and THE CHILDREN!!!!! All red herrings. The People want the State out of the booze business. Very simple. Get the hell to work on it.

Why don't they? Well, the same polls show that only 17% of voters consider this an important issue. I'll grant that, and compared to some others, it's certainly not as important. On the other hand, the heavy lifting has already been done: there are a number of plans out there, some over ten years old, to privatize. Pick one, and do it. It's not controversial if 65% of Pennsylvanians are in favor of it.

Why else? Maybe because of the revenue coming in from our police-enforced monopoly. Prices at the State Store System aren't THAT much out of line with surrounding states -- I've never said that prices were a major issue, although selection and service ARE -- but that's because the PLCB has been willing to take a hit on profits (the governor's PFM report on privatization shows profits steadily declining; more on that soon) to keep their costs high. That's right, I said willing to take a hit on profits to keep their costs high. Because they're a bureaucracy staffed by a union, not a private company, they don't mind not being profitable (according to that PFM report, over half the PLCB's stores are not profitable), as long as they keep their jobs.

Why are the profits declining? So they can stay somewhat competitive while continuing to collect Pennsylvania's outrageously high wine and liquor taxes. But send that private, and the stiff taxes will be exposed. This is the ugly underbelly of the PLCB's State Store System: we pay more than other states on wine and liquor excise taxes: a whole lot more (jump to the link, then scroll down and take a look at the last three tables).

So we need to tell our legislators that when they take this system private, they need to take that burden off our backs and spread it around in a more fair and equitable manner. Or...pick it up in a Marcellus Shale tax of some kind...which it looks like they're already thinking about. Push for that. Because otherwise some genius is going to look at upping the beer tax, and we don't want that!

A good day for Washington State. With luck, a good beginning for Pennsylvania. Keep the ball rolling!

Is the PLCB on the ropes?

The efforts for privatization have gotten two major boosts recently (and yes, I am keeping track; it's just been really busy in my job, the money-making part of my booze-centered life -- my apologies for not keeping up here). One was related to the misbegotten wine kiosks (which I did predict would be a "public relations disaster for the PLCB", though that didn't take much brainpower), and I'll talk about that in a separate post; the other was a far-flying boomerang that came back and caught the PLCB in the back of the head.

Jonathan Newman, in favor of privatization

The boomerang, first: former PLCB Chairman Jonathan Newman, the Chairman for whom the original "Chairman's Selection" was named (because it was his program, and he picked the wines...ask PJ Stapleton how many of the "Chairman's Selections" he's selected), who brought the PLCB further into the 20th century (yes, while working in the 21st century, I know) than any other person, who was
Wine Enthusiast's 2003 Man of the Year because of his work at the PLCB, who resigned when Governor Rendell appointed* Joe Conti as "CEO" of the PLCB... Newman came out strongly in favor of privatization this past Tuesday. At a hastily-arranged press conference at The Wine School in Philadelphia, Newman was introduced by PA House Speaker Mike Turzai and stated his support for privatization of the State Stores. (Happily, "hastily-arranged" also meant that the speakers weren't harassed by scripted questions and chants from UFCW members and union president Wendell W. Young IV.)

I was there, and Newman sat me down at a table with Speaker Turzai, and we talked. Chances sound better than I'd been hoping; it looks like the votes are there for privatization in the House, the Senate is going to take more work. You may have heard that Senate Pro Tem Joe Scarnati questioned the need to privatize the State Stores right now. That came up, and while Turzai had nothing to say, others in the room nodded wisely when I brought up the Marcellus Swap Theory: is Scarnati signaling that he will support privatization if other legislators will support a Marcellus Shale tax/fee of some kind? I believe that's what's going on, and I say, that's a deal I'm willing to support.

I'm not nuts about Turzai's bill, and if some changes aren't made, I can't support it; I'm hopeful that it will get better. I did take the opportunity to ask if the bill takes away the Police-Enforced Monopoly. It does not, but Turzai said the Monopoly is not enforced (though he did admit that there are occasional instances when it is...usually having to do with personal issues with a local cop in a border town), and would not be enforced. I don't like that, I'd much rather see it formally done away with. That's one of the things I'll be pushing for. More to come on that, but about Newman...

The UFCW has, of course, already tried to tar Newman with doing this because of possible financial gain. First, Newman is doing this for the same reason we all are: the PLCB State Stores suck, and they've sucked more since Newman left. The PLCB has stepped in crap -- ethically, managerially -- so may times since Conti took over that it's hard not to link him to it. Second, if Newman stands to make some money off this -- he does have a wine wholesaling company -- well, so what? That's what private enterprise is all about! Of course he'll support it. Only the Union thinks making money is a problem. The Union thinks that the State should be collecting all profits, apparently. That is ridiculous, and one more reason we should privatize.

More soon. Things are rolling, and we've got to get loud in support -- and in making this a good bill.

*Rendell says he "hired" Conti, but that implies a regular hiring process applied to this $150,000 a year job, which it didn't -- which is why Newman resigned.