You Were Right; The Pappy Lottery Was Rigged

Reported on PennLive.com: Five PLCB executives were investigated by the State Ethics Commission for, let's not mince words, cheating on the PLCB's Pappy Van Winkle "lottery." 

Let's do a perp walk. 

• Board member Michael Negra
• Cliff McFarland, director of supply chain 
• Tom Bowman, director of product selection
• Bryan Kelleher, director of the bureau of business development for wholesale operations
• Carl Jolly, a retail operations manager

All five of them were found to have participated in a scheme to snap up 'unclaimed' Pappy Van Winkle 12 Year Old bourbon (the "Lot B" bottling prized by the pros) and other allocated whiskeys. See, the PLCB would hold a lottery (which often led to website crashes, and was widely believed to be rigged, though no evidence of that has surfaced...yet) for PA residents to take a chance at buying one of the state's allocated bottles of various whiskey releases. After the results were announced, the winners would then be able to buy the bottles at the PLCB list price, which was, admittedly, often hundreds of dollars less than at private stores in other states. 

'Shopping' at the PLCB Executive Store

But amazingly, not every bottle would be claimed. For instance, the lottery cited in the PennLive article, the January 2020 lottery for the Lot B bottling, had over 17,000 entrants for 999 bottles, and 24 went unclaimed. The rules of the lottery said that those bottles would then be released for a "second-chance" lottery...but the PLCB decided not to do that, and instead the vultures at the top feasted on the remnants. 

Want more? The lottery allowed winning entrants to purchase a single bottle. Ha! Jolly, for instance, despite not having even entered the lottery (why would he? That's for us suckers), "bought three bottles of Pappy Van Winkle bourbon for $410 and separately a bottle of Weller 12-year Reserve Bourbon for $40." That was in one lottery. We're not told how many bottles in total 0were bought by these PLCB parasites. 

There is an aspect to this that is particularly hard to swallow. Their participation is not contested; they all did it, some of them multiple times. They didn't steal the bottles; they bought them, at list price, with their own money. There is apparently no credible evidence that they flipped the bottles to make money; Lot B, for example, is currently going for well over $1,000 in the so-called "secondary market." 

But because there was "insufficient clear and convincing evidence of a pecuniary benefit", the State Ethics Commission found that there was "no violation" of the state ethics code. That's bullshit. The whiskey wasn't theirs to buy, and even if they didn't sell it, they had that potential. That's like saying you're not guilty of theft because you stole a Van Gogh...and then just kept it. I mean, you didn't make any money on it, right? No harm, no foul, baby!

Despite that "innocence," the Ethics Commission's report says that they were each "ordered to fulfill his agreement to not purchase any items offered by the Pennsylvania Liquor Control Board outside of the process by which a Commonwealth resident may purchase such items." Don't the words "fulfill his agreement" sound like a deal was made? 

Of course a deal was made. And once again, the PLCB gets away with this crap. And what do we do? Nothing. That's what we do. Because the miserable PA Legislature has other things to do. Like making it harder to vote, and easier to frack.

Do you remember when the PLCB was the ONLY retail operation to shut down voluntarily in March of 2020? Absolutely closed for six weeks, and not only that, they boarded up the windows because they were afraid of us, that we rampaging drunks would loot their stores. 

Actual PLCB store, Wilkes-Barre, March 2020

Why are these guys still around? Will no one rid us of this troublesome agency?! 

Apparently not, because neither Shapiro's or Mastriano's campaign responded to me when I asked them about their positions on PLCB privatization. I'd remind you that I'm a nationally known whiskey writer, I've testified about these issues before the legislature; I'm not just a blogger howling in the night...but they didn't respond. 

Which leads me to believe that we're screwed. Shapiro is just another Democrat who will veto any privatization bill -- for reasons unclear -- and Mastriano apparently is either beholden to the religiously anti-booze or will be too busy fighting for freedom, whatever he thinks that means. 

But don't worry. These guys promised not to buy booze outside the normal channels again. Pinky swear. 

Looks like it's gonna be a long eight years. 

The PLCB never leads only follows....sometimes even me.

We have been saying for years that the PLCB not only doesn't lead in ANYTHING. Because of the way they do things, they can only follow like sheep...or maybe lemmings.

By way of example... Way back in July of 2015, before the PLCB started a lottery to apportion their allocation of rare Van Winkle bottlings, I laid out how it would be done if I were running things. Here we are, 3 years later: let's see how the two compare.

They didn't follow my first idea: let the lottery commission handle the details. The PLCB decided they would rather reinvent the wheel. I like to think that maybe the lottery commission told them to take a hike. Why take chances? People like the lottery, they hate the PLCB.

I thought they should allow people a week to sign up. This year the PLCB gave people five days; a work week. It makes sense; management in Harrisburg doesn't work weekends. Heaven forbid they actually do something for the consumer like be open when the majority of people have time off to sign up and fill out lottery forms. What was I thinking?

It also made sense to me that everyone who signs up has to provide all their information up front:
ID -- Shipping and billing address -- credit card number (PA billing only accepted!). Get all that entered before making your picks and engaging in the lottery itself, since you're talking about a site that's been known to crash. Why risk having to enter your information again and again? They must have thought it was a good idea; they do exactly that.

My perfect lottery: a separate lottery for each item but with ALL the items on one page. That way people would just have to check the box to enter. Exactly what they did. I suggested limiting entries to one per person and that only one item could be won - they are doing that too.

Lastly I suggested that a verification code be sent with each approved lottery entry. This code would then be posted on the website so that people could check themselves to see if they had won something. We all know how many mistakes the PLCB makes just doing regular stuff and this would be another check on the system. They don't post any numbers on the website. I don't know if each entry has an internal verification code or not. I still think my way is better than what they are doing.

I wonder...

So there you have it. Did the PLCB take my freely given advice?  Did they hire an outside consultant to come up with mostly the same thing?  (The PLCB is big on consultants when they don't have a clue.) Did the lottery folks help them out?  We'll never know for sure, but you know what we think here at the blog. :)

The Buffalo Trace and Pappy Van Winkle poster contest!

HARRISBURG, Pa., Oct. 15, 2018 /PVWNewswire/ -- The Pennsylvania Liquor Control Board (PLCB) wants to get more underage students involved in their anti-drinking poster contest...and has also started a pro-drinking poster contest to publicize the agency's lottery of rare whiskeys.

A PLCB employee (who was not authorized to lie like the official spokesperson) explained it this way. "There are millions of kids in the Commonwealth, and most of them are drinking more than the kids in New Jersey, New York, Delaware, Ohio, Maryland, or West Virginia, so they don't seem to be that interested in making posters. The adults aren't either; they don't see how important working with L.C. Bee* is: posters can make a real difference!"

These are Daddy's favorites.... 
until he gets some Pappy!
A brilliant first effort from a 10th grader in Shamokin Dam 
that advertises some State Store best-sellers!

The breakthrough moment came when some bureaucrat at the agency had a brain-surge: put a carrot on the stick! "We knew that the adults were interested in hard-to-find whiskeys," the completely unauthorized source continued, "so we thought, 'Why not allow the people who submitted the best posters an inside chance at the limited release lotteries!' That gets the adults involved, and they'll make sure the kids make posters too, so they can try and score some rare bottles! It is the perfect synergy: parents getting involved in their kid's activities, and kids learning about drinking from their folks. And when they grow up and buy more, the PLCB gets more revenue to give to the Commonwealth! After we skim off our ever-increasing operations expenses, that is."

Mom bought these at the PLCB!

This poster contest also teaches kids about business. It's pure supply and demand; almost like the real world (except in Pennsylvania, where the PLCB is somewhere in the middle, shifting the market). Kids get to learn about secondary (gray) markets, cost/value, and stupidity — all at the same time! Not to mention the art and illustration practice, drawing all those bottles and labels that we expect to see in the posters!


No, this isn't real. But if it were? We're sure it would be another example of a PLCB idea no one can remember who came up with, or find any paperwork on it. Like the house brands or wine kiosks. 

Privatize.

*

L.C. Bee! He's real! He's coming
for your parents,
the chronic alcohol abusers!

The PLCB enters the lottery business

Well, it is getting to be that time of year when the PLCB decides what the "most fair" way is to divvy up limited bottles. Last year it was Stacy Kriedeman saying that selling the products online is the most fair method. This year we get Board Chairman Tim Holden presenting a new "most fair," saying "In order to ensure that all consumers interested in a particular high-demand product have a fair chance to purchase the product, we have developed a lottery system for our most limited products.” 

Doesn't that mean people haven't had a fair chance in the past? Maybe it just means that the contractor they hired to do this gets to be the fall guy if it tanks. and then PLCB can claim it wasn't their fault. Just like the Oracle roll out disaster; they don't have the expertise to do it in-house without screwing it up. (I wrote about what I thought the system should look like at the end of last July. They didn't take all my advice so we'll see what happens.)

But is this new most fair method...even fair at all? There are the questions of legality about selling only to a PA resident. The state already restrains trade for their own citizens -- the police-enforced monopoly prohibits us from buying booze anywhere but in Pennsylvania -- but can they restrain trade to non-Pennsylvania citizens? Does or does it not violate Federal statute and will somebody invest enough to find out?  Can they have two systems, in which they allow non-residents to buy alcohol on their website, but refuse to sell these limited items to them at the same time?  What about the military personnel who can maintain the state as their residence but obviously don't have all their bills sent here. State-sponsored discrimination of the very people who are defending the state and country? How cool is that, PLCB?

The only way you will get this set in PA
 is if you copy this picture

Then there are people who own property and pay taxes to PA but don't live here. Is this another benefit of paying your taxes to support a government agency that couldn't care less about you? (I don't want to hear that crap about no tax dollars are used to run the PLCB. As long as the taxpayers are on the hook for over $600 million in pension and medical debt, as long as we have no choice on where to buy our booze, ALL PLCB money is taxpayer money.)

So on the 13th we get to see the first shakedown of the new system, when 24 bottles of some Buffalo Trace Experimental bottles are offered in two lotteries of 12 each (25% of which — 3 bottles of each! — is reserved for a separate licensee lottery). I'm sure the demand level will be close to what the Antique Collection or Pappy frenzy is and will be a real test of their system.

Of course, don't expect to get a flight of the full set of Pappy releases, or a complete BTAC collection. That's impossible in the "most fair" world of the PLCB.