The Beer Law Forum at Yards last week

As I warned you, we had another Beer Laws Forums at Yards Brewery in Philly last Thursday, set up by Philly Beer Scene. Senator Chuck McIlhinney was there, as were Bill Covaleski, of Victory Brewing Co., representing the Brewers of Pennsylvania, and Mike Gretz Sr. of Gretz Beer Distributors, representing things from the wholesalers point of view. I was on the panel representing the drinkers, and Tom Kehoe of Yards moderated. 

This was quite timely. Senator McIlhinney is going to be the new chairman of the Senate Law & Justice Committee (which handles liquor control), and to have him this engaged was great. He's obviously actively seeking input on this. We went right to him out of the box, asking why we had no sixpack sales in beer distributors. He started going off about grocery stores and the three tier system, and I interrupted him to explain that we were talking about the case law: why can't beer distributors sell beer by the sixpack? It would seem to be pretty simple.
 
But that set the tone for the whole night, and a frustration that has become familiar to those of us who want to rewrite The Almighty Liquor Code. It's because, he said, there are 22,000 licensees (tavern and deli licenses and such) in the state who don't want to lose their sixpack business, and they all vote. It quickly became apparent from audience comments that their employees vote too. But what about us, I responded: there are millions of us, and we vote. How can we make that important? It was a question we tried to get answered all night; we got something toward the end.

That led into a fairly simple question by Tom Peters at Monk's Cafe: if a beer is not registered in the state, and they want to get it in for a trial run, or a special event, is there some way to get it in without giving all the distribution rights to a wholesaler? Mike Gretz took that one and seemed to be saying that you could already do this under current state law (but several people in the room who are quite conversant with The Almighty Liquor Code told me that this was simply not so; I'm not sure). 

(Gretz took the opportunity -- as he did at least one other time -- to speak about the family businesses wholesalers represented (and the jobs), and the almost sacred trust of controlling alcohol abuse. I didn't agree with some of it -- it's just a defense of the three-tier system that wholesalers have been using successfully for years -- but I'm not insensitive to it, either. It's just that I can't help noticing that other states have sixpack sales AND sales in grocery stores, and there are no roving gangs of boozed-up semi-zombies there. Food for thought.)

Tom Peters would be quite vocal in support of the tavern owners' interests (understandably so) through the night. What are the tavern owners' interests? They have an asset -- their license -- that is quite valuable, worth tens of thousands (or even hundreds of thousands) of dollars, and they don't want to see anything happen that will decrease the value of that license. Beer distributors selling sixpacks will cut into their sixpack business. Well...maybe. But the grocery stores that bought bar licenses to sell sixpacks are cutting into it now, and the fact is that for most licensees, sixpack sales are a tiny part of their income. Even those who have used their license to run sixpack stores would probably be able to compete, though with lower markup and more effort. But if they're going to give that right up, they want something in return, and that...is where politics and the art of the possible will come into play. 

And that is why we have no sixpack law, because the tavern owners haven't been happy with any deal they've been offered. I get that it's their family business, their livelihood, but...we vote too. Maybe, with an activist leader coming to the committee, it's time to cut that deal.

Speaking of cutting deals, we did get into privatization. The senator is backing a plan to sell wine and spirits by the bottle for takeout at bars. The licensee would pay a $10,000 annual fee for that right (this would obviously lead to the equivalent of specialty bottleshops like The Foodery, but for wine or spirits, or both). Tom was skeptical; many places don't have the room for the inventory that would require. Well, then don't get the license, or figure something else out: if there's money to be made, people will figure out a way to make it. 

That's 22,000 possible additional liquor stores, of course, and that sounds interesting, until you understand that the Senator's plan still has the PLCB as wholesaler. So there's your selection, shot in the arse. Although who knows, if they don't have to figure out how to sell it, maybe they'll actually get some good stuff in? Thing is, we don't know, and that's when I blew my top and started shouting. I thought this was an idiotic plan -- I still do -- and that it's not really what we want, which is privatization. I calmed down, embarrassed, but still angry.

Then the Senator pointed out that while he would like to replace the state stores with private outlets (that's a paraphrase, I didn't get the exact quote, but it's very encouraging from a state senator running Liquor Control), we had to realize what he had to work with. "40% of the townships in Pennsylvania are dry," he said. Let me repeat that: Senator McIlhinney said, "40% of the townships in Pennsylvania are dry."*

That may seem crazy in 2012, but consider. NONE of the townships in the five counties in southeast PA are dry, so we're not the best judges down here. I do know of dry townships where I grew up in Lancaster County; they're still out there, and they don't go wet. As the senator said, increasing the number of licenses sounds great to you here, but when he goes out and to try to convince a senator from Adams County (west of York) on this, he doesn't get a lot of support from the area. It's pretty rural, pretty conservative. 

I think that was when we got a great comment from the audience: If alcohol is so important and dangerous that you can't privatize it, why are we privatizing schools? The wholesalers and tavern owners talk about family businesses, my parents are educators, this is my family business, and you're privatizing the education of your children. If you can do that, why not wine sales? The Senator denied that schools were being privatized -- maybe not up where he is, but in Philly they were -- and the whole thing got a bit disjointed, but it was an excellent point. It also underscores that most of the arguments against privatization are about union jobs and tax revenue, not health and safety.

We decided it was time to wrap things up, so we asked the Senator: what do we do to get through to our legislature that we want this to happen? Show up at things like this, he said: done. Write to your legislators: do it. What about other legislators? He kind of chuckled: you don't vote for them, so they won't really be impressed. Maybe, but...it can't hurt (I wrote the governor, too, BTW).

The thing is...to get their attention, you have to write often, and there has to be a LOT of you. We are going to have to organize, and as this is all going to start up again in February, and we don't even have buy-in on what it is we want...that's daunting. So by the end of the week: I'll have a punchlist of what it is we want. We'll go from there.

Remember: Privatization IS Modernization; an End to The Case Law.





Note that this 2009 newspaper piece gives a number of 28% of the townships and municipalities as dry, and 12% of state's population lives in them. Even though that's less than 40%, it's still a lot.

The Election's Over, It's Time To Get Back To Work

The PLCB clerks have a "Save the PLCB" page on Facebook -- can't blame them, but they're standing in the way of progress toward modernity -- and this was just posted early this morning:

"Back to the subject the time to promote modernization is today! New reps need our input! Modernization is the way we move forward! Write, call, visit your Reps new and old. Strike while the iron is hot!"

We need to meet this. PLEASE reach out to your legislators (almost all of them were re-elected, so don't delay: HIT IT NOW) today and congratulate them, and let them know that you're counting on them to come up with and support a solid plan for privatization, NOT "modernization."  

Privatization IS modernization: that needs to be our slogan. The thing is...the PLCB's "modernization" plans are untested, their execution on modernization in the past has been problematic at best (the wine kiosks are only the most visible failure), and really...why would you go to an agency that has so many issues with customer service and central command-itis for ideas on how to "modernize"? 

Privatization IS modernization. There's nothing untested about private retail, it's not only how most other states (and countries) sell booze, it's how Pennsylvania supplies food, clothing, books, housewares, fuel, electronics...everything else people buy. Total Wine knows how to sell booze, Joe Canal's knows how to sell booze, almost every drugstore in Maryland knows how to sell it: it's not rocket science, and it's definitely NOT so dangerous that the state has to do it. 

It's also not really about revenue: the taxes will continue to come in, and all the Legislature will have to come up with is less than $100 million out of a $27 billion annual budget. I think there are some cuts in the Harrisburg establishment that could neatly cover that...and it's well worth it to stop treating Pennsylvanians like children. Besides, border bleed will go down significantly and we'll actually get MORE tax revenue. 

Privatization makes more sense than "modernizing" a system that most Pennsylvanians would really rather do without. Solve it all, simply, and you'll actually create jobs. Sure, the jobs of the PLCB will be largely lost, but they'll be replaced by jobs in the private liquor stores. 

Write your legislators. Today. Tell them you want privatization, not modernization.   

Is Privatization Dead? Not at all!

The Legislative session is effectively over, and the privatization bill has died with it. No one's doing anything till after the election, at which point privatization would have to be re-introduced. Mike Turzai, the vocal champion of privatization in the State House, damaged himself badly with a gaffe about voter ID, and by failing to bring privatization to a vote. Governor Corbett has said recently that privatization is still a top priority, and that he will present a proposal next year, but the Legislature may change hands, and his approval ratings are low.

We're screwed, it appears.

Oh, shut up. That's just what the PLCB partisans want you to believe! The truth is that the PLCB's incompetence is the gift that keeps on giving. As long as they keep screwing up, privatization is going to be in the Legislature's face, and the Internet makes it even easier to keep up the pressure.

Don't believe me? Take a look at this recent Philadelphia Inquirer poll. "The poll found that 55 percent of respondents supported privatization, 28 percent opposed it, and 17 percent either did not know or did not answer." That's almost 2 to 1 in favor among those who have an opinion. It gets better: "61 percent of respondents in the bipartisan survey said they supported allowing grocery stores to sell beer and wine." Even the clueless Legislature can't ignore numbers like that forever (except they will, because the unions that represent the State Store workers continue to get right in their faces and remind them that they vote and that they give lots of juicy campaign donations).

The PLCB stepped in it again during Sandy last week, when they shut down the entire State Store System for two days. Now, some of the stores were without power, and some were in areas where it was dangerous to drive...but the PLCB drove home the problem with a stupid state-wide monopoly by shutting down every single store, regardless of local conditions. Even some of the employees admitted it was a stupid thing to do.

Want more? How about even more bad press for the goofballs who run the PLCB and the State Store System? That's right, Joe Da CEO was in the news again, and it wasn't because he's a great humanitarian. It's about that dopey Tableleaf in-house wine brand they shoved down the throats of Pennsylvanians. The Legislature wanted to know how and why this lowball wine brand came to be on the State Store System Shelves in (unfair) competition with other brands, and Conti told them that vendors approached the PLCB with wine samples. But that's not the story PLCB marketing director Jim Short tells: he says he went to the wine companies looking for cheap wine to put under the Tableleaf label. Hmmm...a falling out between two of the people at the PLCB under investigation for corruption with vendors? 

It gets worse, according to a story on the TribLive website:

Conti told the House committee that the Wine and Spirits Advisory Council, a group of consumers and liquor license holders empaneled by the LCB, tasted samples of wine submitted for consideration by a number of vendors competing for the TableLeaf brand, transcripts show. But those council members deny being involved.

...

In later interviews with the Trib, Conti changed his story again, stating that an LCB wine educator and outside sommelier tasted samples submitted by vendors.

But Judy Carroll, a wine educator for the central region of the state, said educators don’t play a role in choosing products. “I do classes and seminars with the people who work in the (state) stores,” Carroll said.She said her six counterparts elsewhere in the state all do the same thing: conduct classes to educate state store workers.

And Melissa Monosoff, the sommelier under contract with the LCB from December 2007 through November 2011, said she was not involved in the development or selection of TableLeaf wines “in the slightest” and had “no idea who was.”

Conti, once again, has apparently misspoken. That's the arrogance of the PLCB for you.

Want more? How about this: The LCB, the Board itself, is making a dumb show of its obligation to meet publicly. Check this out, again from the TribLive website:

A Tribune-Review analysis of nearly three years of LCB meeting records, along with attendance at meetings, shows many of the board’s twice-monthly meetings lasted just 15 to 20 minutes with little or no public discussion before votes. Critics speculate the lack of discussion means the bulk of the agency’s decision-making occurs out of public view.

“It appears that ... the staff and the board members have developed a way of doing business that is difficult, if not impossible, for an average citizen to follow,” said Senate Majority Leader Dominic Pileggi, R-Delaware County, an advocate for increased government openness.

“Certainly, these issues of how the board operates will be given a fresh look as we work through the legislation for changing the way citizens are able to buy alcohol,” Pileggi said.

Unfortunately, what Pileggi means here is that the Legislature is still considering the ill-advised "Modernization" program that the PLCB is advising! Does this make sense? Here's an agency that is crippled by incompetency, riddled with corruption, consumed with its own arrogance...and you think it's a good idea to let them tell you what's needed to fix their problems?! 

We have a big job ahead of us in 2013. We need to remind Governor Corbett of his promises. We need to remind the Legislature and Senator Pileggi that we want privatization, not some crappy "modernization." We need to get a good, fair bill that gives us privatization that makes sense, not the cock-eyed greedfest that got passed in Washington (that people still seem to prefer to the old state store system). And we need to get serious about it. 

Get started now. If you're in the Philadelphia area, please come out this Thursday to Yards brewing for our second beer laws forum: if you WANT it to cover privatization, I'm willing to expand the conversation. We had 100 people at the last one, I'd love to have an overflow crowd. We're going to be talking about how to take action. It's time to get rolling.

Next month: beer law forum at Yards Brewing

If you're in the Philly metro area, you ought to join us at Yards Brewing on November 8, at 7 PM for another Beer Laws Forum, put on by Philly Beer Scene. Here's the scoop:

Join us for the 2nd of our Beer Laws Forums. Last February we had an open forum discussing the different beer laws affecting Pennsylvania. Senator Chuck McIlhinney who writes our Beer Laws column and Lew Bryson answered questions and Tom Kehoe of Yards moderated.
For this forum, Tom, Lew and the Senator have all generously agreed to once again sit on the panel, and this time will be joined by Bill Covaleski, of Victory Brewing Co who will be representing the Brewers of Pennsylvania, and Mike Gretz Sr. of Gretz Beer Distributors, who will be representing things from the wholesalers point of view. The forum is open to the public and we will do our best to answer everyone's questions.
The event will be held at the Yards Brewing Co. tasting room and the bar will be open for the event. 

You should come, because this is a chance to find out what's really going on with liquor law in the Keystone State. We are in an activist phase in the legislature with regards to the Liquor Code; things ARE changing...but not the case law, and not its even more ridiculous corollary, the "only 2 sixpacks law" that says if you want to buy more than 192 oz. of beer to go at a bar...you have to buy two sixers, step outside, then come back in and buy more. 

I want at least one of you to ask the Senator what the chances are of killing or even significantly changing the case law by this time next year. He'll say it's not going to happen this year...then I'll do my bit and ask him "Why not?" Then, most importantly, I'll ask Tom, Bill, and Mike what their position is on the case law. 

We all want sixpack sales. We'd really like beer sales of any volume at grocery stores (and convenience stores and gas stations and drugstores; you know, like they do in other states?), although we know that's not likely. But why can't we get sixpack sales? You need to ask the Senator, then go home and ask your legislator the same question. And don't settle for "No." Ask why. 

And while you're at Yards, do what I do: drink plenty of Brawler. It's my debating beer of choice.

Next year - why we need to get this right

Privatization is over for 2012. The unions shouted and chanted and wore their matching t-shirts while their president for life, Wendell W. Young, fourth of his line, told scary tales of "the possibility of liquor stores on every corner" if privatization went through, deliberately ignoring the ridiculously inadequate license caps legislators carefully included in every proposal. The social conservatives quietly pressed for more regulation on alcohol. And the fearful legislators, mindful of the campaign contributions of these two groups -- especially those of organized labor -- gutted the privatization proposal that was before them. Then majority leader Turzai's hamhanded politicking ruined any chance that it would go anywhere. So once again, the clear will of the majority of the Commonwealth's citizens was thwarted by a gutless government.

Well, maybe not so bad. After all, the voters of Washington went for a privatization scheme that raised their already high liquor taxes, which should be a caution to all Pennsylvanians who want privatization. That caution, of course, is to be very, very careful about the privatization you get. Because all we've been offered recently is a bill -- HB11 -- that obviously was written with large corporate interests very much in mind, and an amendment to it that was clearly designed to be impossible to pass, in a nod to the power of organized labor. These were not the privatization we wanted, and I'm glad they didn't pass.

I've already made some suggestions in that direction, and you can see them here. To sum up briefly:



1. Let supermarkets sell beer, wine and liquor, purchased from private wholesalers. This competition will likely kill the State Stores anyway.

2. Charge a flat fee to any business that wants to sell booze – no cap on licenses. This will actually make more money for the State, and make it easier for non-nuisance bars to thrive.

3. Tax volume, not value. The Johnstown Flood Emergency Tax makes cheap booze even cheaper, while making better booze even more expensive. Go to a gallonage tax, like almost every other state.

4. Allow Pennsylvanians to buy wine, spirits, or beer in other states, or through the mail/Internet from anywhere, without penalty. -- End the police-enforced monopoly.

5. Allow any authorized retailer to sell beer in any volume they desire, without fake restrictions. -- End the case law. Now. The Legislature has fiddled around for years over this simple change. Shut up and do it.

6. Open up the wholesale market to more competition. -- More wholesalers means more competition, which means better prices and service.

Start planning for next year. Ask your legislator now where they stand on privatization. Tell them that you're in favor of privatization, that you're in favor of doing away with all vestiges of the case law, and that you need to know if they're in favor of those two things...and if not, you want real good reasons why not. We need to be clear with the Legislature that this is an important issue for us, and that it will affect how we vote next month.

The PLCB has shown abundantly how riddled with incompetence it is, and now their corruption is coming to the surface as well. Their ludicrous "modernization, not privatization" campaign is pathetically self-serving. Here's a thought: how about someone in Harrisburg thinks about all of us and what we want instead of making another damn skeezy deal to get some other small group what they want?

This is far from over, though PJ Stapleton's early resignation is a welcome gift. The day after the election, remind Governor Corbett that he owes us privatization.

How to 'save' the State Stores and make privatization go away

All this time we've been talking about privatizing, and the union and the social conservatives and the beer retailers have been railing about it, and yet the talk continues...wanna know a secret?

It would be really easy to get Pennsylvanians to accept the State Store System forever.

Really. Here's all you have to do.

1. Change the name of the Johnstown Flood Emergency Tax. Just change the name. Call it the Pennsylvania Alcohol Excise Tax, and most people will never say another word about it. It's the idea that the tax was for the Johnstown Flood and we're still paying it that drives them crazy.
2. Get rid of Joe Conti and the CEO position. The man's a disaster: the wine kiosks alone would prove that, but the constant ethics investigations are a drag as well. The CEO position is such an obvious patronage job that it's painful.
3. End the police-enforced monopoly. Just give up. It's rarely enforced, and it's galling to Pennsylvanians. Accept you're going to have to compete with businesses over the border...just like every other retailer does (and consider lowering the PA Alcohol Excise Tax to be more competitive...and watch sales go up, and overall revenues go up as people have fewer reasons to buy booze -- and food, and gas, and everything else -- outside of PA).
4. Kill the case law. It's not part of the State Store embroglio, but it's a thorn in our sides, and taking it away will calm us down. 
5. Link advancement of product knowledge to retention and promotion in the work force. If the union wants to keep their jobs, have them make this major concession: their retail jobs will actually depend on them selling products. 
6. Double the number of stores, kill the stock requirements, and allow local control of stocking. Do we really need 2500 SKUs in Clarks Summit, when you can -- supposedly -- easily order something through the stores? Cut the operational costs of running State Stores. Allow local control of ordering, not one plan put in place in all stores by a committee in Harrisburg.
7. Put the BLCE back under the PLCB. The PLCB and their enforcement arm don't work together. The BLCE used to be part of the PLCB; put them back together.
8. Make the PLCB answerable to the State Government. A lot of the arrogance and crap we've seen out of the PLCB over the past five years stems directly from the agency's independence. There's no reason it should be so independent. The easiest way would be to make it part of the Department of Revenue.

Do those things, and Pennsylvanians will be satisfied enough that privatization will never pass. Not in my lifetime.

Why do I lay this out, when I dearly want privatization to pass? Simple. I know the Legislature and the PLCB will never get their shit together enough to do any of this, even though none of it would hurt state revenues.

In Which I Encourage You To Emulate Gandhi

I've skirted this. I've joked about it. I've said we don't need to do this. But in the wake of the disaster that was Mike Turzai's effort to get privatization passed -- the no good HB11, the botched politicking -- I have decided on a simple proposition.

Stop Buying Wine and Liquor in Pennsylvania.

We are told, time and again, that this is about revenue. That any privatization bill must be "revenue-neutral." To the Legislature -- which has denied the will of the people on this issue for decades -- the sustained existence of the State Stores is all about the money. I would suggest that what we should then do is deny them that money to make them change their minds and make law for the people. In short, 

If the Legislature will not give us privatization, we will go to New Jersey, Delaware, Maryland, wherever we choose, and take it. 

This is breaking the law. It's part of the Pennsylvania Code. We're told it's not enforced (which is a lie), so you should be safe. I say that if they start enforcing the law...we go to civil disobedience, and organize mass violations. We march across the state lines to liquor stores, buy a bottle, and come back to PA and let the police arrest us and seize our booze. 

I don't think it will reach that point, but if it does, we will organize, and do it. In the meantime...join me. Because I am done with the State Stores. From now on, I buy my wine and spirits in other states in open defiance of this bad law. 

An unjust law is no law at all. (St. Augustine...my confirmation saint)
 

If you need instructions, there's a handy guide here. Enjoy. 

Inquirer poll on privatization today

The poll connected to this editorial on the lazy PLCB judges is completely unscientific...and at 11:35 AM, it's running 87% in favor of privatization, which leads me to believe that the State Store workers either haven't haven't woken up yet, or are still hungover from celebrating the delay of the State's first ever vote on a privatization bill. So why dontcha go vote! I urge you to vote for the first option, rather than divide our efforts and vote for the third. Let's nail this.

More on Contigate

Monica Yant Kinney scorched the two apparently ethically-challenged heads of the PLCB -- Joe Da CEO Conti and PJ "PJ" Stapleton --  this morning in her Inquirer column. It made me think more about this, because she brought up some good points, not least of which was this: why were these guys dumb enough, cheap enough to do this stuff on their State-supplied email and computers...after Bonusgate and the conviction of Bill DeWeese?

Putting in an order for more Phillies tix

It's worth pausing to shudder that Harrisburg remains so clueless about the need to separate public business and political enrichment in the aftermath of Bonusgate and Computergate, the scandals and trials that led disgraced former House Speakers John Perzel and Bill DeWeese to share a prison cell.
Have those who run this state learned nothing about relegating greed to their home networks? Surely these guys can afford a second BlackBerry. After all, Gmail is free.

Apparently they haven't.

I posted this on Facebook, and some have brought up that this kind of thing is common in many industries. Well, sure. I have to say, the booze companies think nothing of this kind of stuff. It's open knowledge that I accept samples -- practically everyone in the business does, even journalists at newspapers with solid ethics codes (when you get samples from everyone, there's no influence to be "nice" to anyone in particular) -- and I've been on junkets to production facilities. Those were only when I had an actual story to write, and believe me, the Caribbean rum trips and cognac trips I've turned down, jeez, I woulda liked to have gone....but that didn't pass my personal sniff test.

I've turned down offers that were just plain over the line. Like Phillies tickets, and concerts. Only time I've ever been in a Phillies box is when I was hired to do a beer tasting in one; only free tickets I've ever accepted were from the Red Cross as a thank-you for platelet donations. I don't do that. I keep it to stuff that will actually, honestly help me do my job by getting me into relevant facilities and areas that I wouldn't otherwise be able to visit. And when I do, I make a point of noting that it was paid for, and I try to write about it as honestly as possible.

The difference is, by the rules these guys acknowledged when they took the jobs, all of that kind of thing is illegal and unethical. They are government officials, in charge of a retail monopoly, and therefore have to play by different rules. Apparently they forgot that, and yes, that does make you wonder about the "culture" at the rest of the agency...especially an agency that's been the subject of multiple special audits in the past few years for possible ethics violations (that found that while the agency had met the letter of the law, the spirit of the law was bent or broken).

Does all this have anything to do with privatization? Does it say anything about the agency and its mission? Or is it, as one State Store clerk and union rep told me, simply an ad hominem attack on the people at the top, and has nothing to do with the State Stores? Stepping aside from his misunderstanding of the ad hominem fallacy, I would argue that even so, there is a direct relationship between the agency and the behavior of its leaders...particularly given that the same kind of ethical violations took place at another, very similar agency (the North Carolina ABC, see below), and that, as I mentioned above, this isn't the first ethical question that has come up at the agency.

This is an independent agency. It answers to no one directly. The Governor can't fire Joe Da CEO, he can only ask the Board to do so, and has made it clear that the Board has defied him on that (something they did to Ed Rendell fairly regularly). The Legislature can't make the PLCB do anything without changing the Liquor Code, something they've shown very little stomach for -- at least, any effective change. The PLCB has its own judges (lazy though they apparently are), its own police agency (yes, under the State Police, but at the PLCB's beck and call; it's called the Bureau of Liquor Control Enforcement, after all), and most importantly, its own budget. The Legislature can't even cut off their funds, the usual method of reining in a rogue agency.

The PLCB has grown to be lazy, arrogant, and wasteful. The administrative costs of the retail operation are out of control; there are fewer stores and more employees than there were in 1999, for example. It is a patronage pit; Conti's job alone proves that. Privatization will cure that. The regulatory functions will run cleaner without the contradictory retail function, or they could easily be assigned to other agencies (as suggested here and here), which would save even more money.

We'll have to take it to the Capitol before this is over.

The Legislature may have dropped the ball...again. Doesn't mean we have to. I'm working on a plan of action, and hope to have it up here shortly. This is opportunity, people: Turzai's shit plan HB11 has failed. We need to press our desires home to the Governor's office, but they won't give a damn if we don't give a damn.

Read that quote up to the right, the one that's been here since the day I started this blog. It's the truth, and it's the only way we'll get this done.

"...there was [in 1997] no overarching passion within the General Assembly, or in the public at large, for privatization. Unless and until there is a general hue and cry, it is very unlikely there will be a privatization initiative that succeeds." -- John E. Jones III, former PLCB chairman

Will Corbett Give Conti The Axe?

Check this out, from John Micek's Morning Call politics blog "Capitol Ideas." 

"Absolutely," Corbett told reporters this morning when he was asked whether he wanted to scrap the six-figure position now held by Joe [Da CEO] Conti, a former Republican state senator from Bucks County. Conti, who is paid $156,000 a year, was appointed to the job by ex-Gov. Ed Rendell.
"I have never saw the reason for the initial appointment for the CEO. I still don't see the reason for the appointment of the CEO," Corbett said. "But I need two votes. I need two votes on the board to change that."

"Absolutely." And with the ethics issues that came out today, I'm guessing that the board member he's looking to replace to get those two votes...is PJ "PJ" Stapleton. That will shake things up.

"Shit! We all just got fired!"

This is a great solution. I've been concerned about Conti's gaffes and screw-ups. They're great for privatization, the man is The Gift That Keeps On Giving, but...he's been delivering too much lately. I was afraid that he was finally going to get canned, and then they might replace him with someone who's actually got the chops for the job. That would give us The Newman Problem: a PLCB that's just good enough to lull people to sleep and keep stumbling along, when we could get rid of the thing and get the good booze access other Americans enjoy -- at least, that some of our neighbors do.

But dump Conti and the whole CEO position? Brilliant, why the hell didn't I think of that? It's because governments rarely allow any position to go away, but we might get lucky. If Corbett started cutting a top manager from the PLCB every month...well, it would be a start!

Postponed II...and a modest proposal

Privatization is on hold till the fall, according to KYW (and an interview with Rep. Turzai), and I'm thinking that's not a bad thing. HB11 as it stood was not good enough, and was pissing off people who had to be in it to make it work. And it sounds like Rep. Turzai was pissing some people off as well; maybe the Governor's involvement will help.

In the meantime...we should help too. Take a look at my earlier suggestions for a clean bill, and discuss them with your representatives and senators. We don't want a repeat of the Washington bill, we want one that will give us normalcy.

Or if you want to make it really simple...check out this 1987 proposal for privatization that would cut through the whole Gordian shebang.  How about it:

The plan shall provide for the transfer of all the property, inventory records and employes of the State Store system and the liquor wholesale distribution system to the Department of General Services on or before June 30, 1987, for appropriate disposition as provided by §  7.343 (relating to divestment of State Stores and initial private licensing). 

That's right, check out 7.343, because it's a doozy, a brutally simple way to get the damned job done.

(3)  Termination of State Store operations. The Department of General Services shall develop a plan for the disposition of the State Store system which provides for the continued operation of each State-owned liquor store for up to 90 days following the auction of the right to purchase the property of the store. The Department shall further provide for the continued operation of liquor wholesale distribution for a maximum period of twelve months to the extent necessary to provide an adequate supply of consumer products and services during the phase-in of operations of private retail outlets and wholesale distributors. Each State-owned liquor store may remain in operation for not more than 45 days, but not later than June 30, 1988, following the opening of the substitute privately licensed wine and liquor store in order to assure adequate continuity of services to the public. 

Hear that sound? That's a clean break with the State Stores. Tell your representatives to have a look at this...because they LOVE pre-written laws that they don't have to work on.

Another Ethics Investigation at the PLCB: this time at the top

The Philadelphia Inquirer reporter who's been covering the PLCB, Angela Couloumbis, dropped a bomb in this morning's edition. The headline:

Top LCB officials said to take gifts, favors from vendors 

That got my attention. The article (citing a leaked report from the Inspector General that was supposed to have been delivered to Governor Corbett in late March) detailed how Joe "Da CEO" Conti, PJ "I Used to Matter" Stapleton, and PLCB marketing director James Short have been found to have "accepted gifts and favors from vendors and other businesses with an interest in liquor," according the Inspector General's office. The IG, Kenya Mann Faulkner

wrote that her agency's watchdog role was limited because the liquor board is an independent agency [a situation I've pointed out before, and one that leads to the agency's incredible arrogance] and its officials could not be compelled to cooperate. As a result, she wrote, investigators did not interview LCB employees or vendors. But they did review e-mails sent on state computers and concluded that the Ethics Act had been breached.

What are the unethical actions that the IG's investigation turned up?

Joe Conti allegedly accepted Phillies and Union tickets from companies doing business with the LCB and "lobbied a vendor and pressed others inside and outside the agency - including Philadelphia restaurateur Stephen Starr - for jobs for his brother and daughter."

PJ Stapleton? "...one LCB vendor secured a round of golf with a pro for Stapleton during a tournament at Aronimink - and sent two employees to serve as Stapleton's caddies." Stapleton also

accepted several gifts from an LCB vendor, North Wales-based Capital Wine & Spirits. The gifts included about $1,700 worth of alcohol for an event at the Hotel Hershey last year that Stapleton and his ex-wife organized - the annual Keystone Weekend, billed as a forum for business, civic, sports, and entertainment leaders to exchange ideas on current issues. Stapleton solicited the alcohol and the LCB vendor donated 60 bottles, the report said. It quoted an e-mail sent to him last Sept. 12 by a Capital executive: "The wine and spirits for Keystone weekend is taken care of."

And James Short? I almost feel sorry for the poor bastard: all he did was take Conti's freebie Union tickets one night when Conti couldn't be bothered to accept one more gift.

According to the article, the report has also been forwarded to the state Ethics Commission. What did the accused have to say for themselves? 

Conti, Stapleton, and Short declined through LCB spokeswoman Stacey Witalec to be interviewed for this article. Witalec said, "The board has never been presented with the report, or notified of any formal investigation. We will be prepared to discuss any details when formally notified."

You know, when I saw that headline, the first thing that flashed through my mind, even before "Ah-HA!", was this. Three years ago, there was a scandal in North Carolina about one of their county ABC Boards (their control is even more byzantine than ours) accepting a sumptuous meal from Diageo reps, a Del Frisco's steakhouse meal for 28 ABC officials and their spouses. This was part of a string of scandals involving the ABC, which included gross nepotism and $20,000 of missing inventory at one store. Now, I'm not saying that the PLCB is the NCABC, it's not like there's been a string of scandals at the PLCB...

No, wait a minute. There is a whole list of truly questionable decisions that have been made by the PLCB: you can find it here. There's the wine kiosk single-bidder fiasco (which triggered a special audit by the Auditor General's office), the questionably-awarded 'courtesy contract' misstep (another audit...), the inventory software screwup (wow, another audit?!), and, of course, the still unexplained incident involving "widespread financial irregularities at the PLCB's Philadelphia warehouse where over 20 employees were suspended.

And before anyone accuses me of dredging up the past, re-hashing old issues...there was this little beauty just two days ago: another Angela Couloumbis article on the lax work habits of the PLCB's stable of private judges. This paragraph pretty much sums it up:

Investigators found that LCB judges rarely stuck to normal workdays, often arriving hours late, leaving the office for hours at a time without taking appropriate leave, and going home early, according to the report. Sometimes, the report said, they didn't show up at all.

Guess we know why it's so hard to get a nuisance bar closed.

These stories are like Christmas morning for me. This is exactly the kind of malfeasance that government monopoly retail breeds, and I was pretty sure it was there...and thanks to Angela Couloumbis, now we know it is. It's very satisfying to see how her stories have changed from slightly pro-PLCB to a more adversarial relationship. After all, as Mencken put it, the only way a journalist should look at a politician is down.

Does this mean anything for privatization? You bet it does; it makes it a LOT harder for the PLCB to claim the moral high ground. Time to press the advantage. Tell your legislator you don't want want a monopoly in the hands of arrogant people with questionable ethics who are clearly out of touch with what Pennsylvanians expect. Break the monopoly; privatize. We have a bill on the floor...fix it, pass it, and let it happen.

Ugliness - What Happened to Privatization

I got a copy of the Capitolwire report on what happened to HB11, the privatization bill. It's a subscription service, so I can't/won't reprint the whole thing here, but here are some pertinent points...

Beer distributors matter to Republican lawmakers. The one who mattered most in this particular fracas is the King of SEPTA and Lord of the Turnpike, Pat Deon. In addition to those two big-ticket, patronage-filled jobs, Deon owns beer distributorships in Bucks County.
It is not clear how many of the seven Bucks GOP votes Deon withheld from Turzai. Personally, I think Reps. Frank Farry, Gene DiGirolamo and Scott Petri, all Bucks County Republicans, vote no if Mr. Deon did not exist. All have a pro-union voting history, although Gene and Scott boast a longer and fuller one than Farry.

It really sounds like the bill sank because Turzai screwed up by pushing too hard -- without listening to other legislators -- and by ham-handedly adding beer to the bill without proper thought about what 'beer' might actually want.

Turzai's bill is hated by beer distributors who think it does too little for them, costs them too much, makes them change their business too much, and gives too much to two of their rivals: restaurants/bars and supermarkets.

As Daniel Rubin pointed out in the Inquirer yesterday, most Pennsylvanians want to get rid of the State Stores, but it doesn't happen because the people who are happy with the way it is are more vocal and effective.

I asked them why it was taking so long to blow up a Prohibition-era system so many people loathe.
"For many parties, the system wasn't that broken," Waldfogel said. "And there were some parties for whom the system was wonderful."

The beer distributors and the union very much like it the way it is, and it is so important to them that they are putting the smack-dab on the legislators. As long as we're "only voters," we're screwed, and stuck with this worthless, stupid system that treats us like teenagers and tells us what we're allowed to buy.

What happens next? Probably nothing, though Turzai claims he'll bring it up again. The chances that he will have changed his leadership style sufficiently to pull it off are slim. So we have a bill on the floor that no one seems to want enough to pass, and...

The bill would have been sent back to committee Monday had not Taylor literally run down the aisle yelling, "I don't want it! I don't want it!"That was the only area of agreement between Taylor and Turzai regarding the bill: Turzai didn't want to have to get it out of committee again and Taylor didn't want it back.

Sounds like we're boned. As I've said before, this is not a good bill, and it infuriates me that now "privatization" is associated with it. We had a lot of good people and effort involved in this push, and it looks like it's been pissed away. I hope the Governor puts a bill forward.

Postponed

The vote on HB11 was called off yesterday, debate suspended before it came to a vote, actually. There's been a bit of spin on this, but what that almost certainly means is that they knew they didn't have the votes. I understand it was close, within three or four votes. You can get some of the details here: Morning Call Harrisburg reporter John Micek and Union president Wendell W. Young IV were on WHYY's Radio Times show this morning. Pretty plain talk.

So...once again, although 60-70% of Pennsylvanians continue to say they're in favor of privatization, the Legislature continues to balk it. On the other hand...it's not dead. Talk to your reps, let them know that you want privatization. Let them know you expect a real response from them as well.

Until then...postponed.

Easy way to get your representative's attention

The Commonwealth Foundation (which has been solidly behind liquor store privatization for several years now) has put up a form letter generator so you can easily contact your reps and the Governor to ask for their support on privatization. We have to show them we're in support of this!

Please use it, and remember to put a new opening sentence on your letter so it doesn't get tossed immediately as a form letter. Make it simple and personal: "I need your support on liquor privatization," or "I hope you're in favor of privatizing the state liquor stores," something like that. Let's do this: it's very close!

Crunch Time -- A Bill is in Debate

I don't have time to explain why I've been silent here for over six months -- a lot of it was work, and some of it was that I did a lot of talking on Facebook, which I now realize was wasted -- but that's not important right now. What is important is that HB 11, a privatization bill, is being debated in the Pennsylvania House today. Debate began last night, and continues this morning. That's exciting, but...the bill needs a LOT of work.

I've got some suggestions. Oddly enough, I got into an email discussion with Jon Geeting, who's involved with the Keystone Politics blog, "Pennsylvania's source for liberal political news and commentary." Jon's an example of why this is not your typical privatization battle, which usually lines up as liberal vs. conservative, free marketer vs. union supporter. Jon recognizes that the system we have is not as it should be, and while we don't see eye-to-eye on the taxes -- though we're not 180 degrees opposed -- we agree on a lot about the state's dysfunctional liquor code.

As I said, we got into a discussion recently, and came to six points that we agreed on, and think should be in any Pennsylvania booze privatization bill. Note that there is nothing in here about the actual end of the State Stores -- except that point 1 covers that effectively; they won't survive the competition -- or the union, because that's up to the legislators. Jon posted them yesterday at Keystone Politics, and I realized that it was time to blow off the cobwebs here and get back in the game. Here are the six points. They're somewhat controversial...in Pennsylvania. In other states, they're ho-hum standard.

1. Let supermarkets sell beer, wine and liquor, effective immediately. -- In Portugal, they sell bottles of whiskey in coffee shops; you can buy beer in supermarkets in most of the states that border PA, you can buy champagne at convenience stores in Virginia...and yet, no one's rioting in the streets. What's the big deal?

2. Charge a flat fee to any business that wants to sell booze – no cap on licenses. -- Pennsylvania's licensing system is broken, it makes no sense for the state, and the artificial limits on licenses penalize areas that are experiencing growth. Liquor licenses sell for upward of $300,000 in some counties...and the State sees only a puny annual fee from that. Get smarter: charge what a license is worth, and charge it every year.

3. Tax volume, not value. -- Pennsylvania's hated Johnstown Flood Emergency Tax is not going away; the State gets revenue from that tax, and booze taxes are an unfortunate reality. But most other states have a gallonage tax, that is placed equally on wine and spirits by the "proof gallon," a measure of volume of alcohol, rather than the way Pennsylvania does it, which is by a percentage of the price. What Pennsylvania's tax does -- unintended consequences -- is make blotto booze (cheap wine, cheap vodka) even cheaper, while making better booze even more expensive. If we're taxing alcohol for some health or moral reason, the gallonage tax is more honest; if it's just about raising revenue...well, why not put an excise tax on everything and share the pain?

4. Allow Pennsylvanians to buy wine, spirits, or beer in other states, or through the mail/Internet from anywhere, without penalty. -- End the police-enforced monopoly. This is pretty simple. The only reason this unAmerican, anti-federal "stop you at the borders" law is even allowed is because of an overactive interpretation of the 21st Amendment. After all, I'm allowed to buy gas, food, books, clothing, whatever I want in New Jersey or Ohio; why not booze? We're American adults; we deserve to be treated that way.

5. Allow any authorized retailer to sell beer in any volume they desire, without fake restrictions. -- End the case law. Now. End all artificial restrictions on how little beer someone can buy in a single purchase, as well as how much. The case law and its tavern corollary, the "two sixpack" law, make no sense. They are there as a favor to business, not for any kind of health reason, and certainly not for the Pennsylvania consumer. Or the Pennsylvania voter. The Legislature has fiddled around for years over this simple change. Shut up and do it.

6. Open up the wholesale market to more competition. -- More wholesalers means more competition, which means better prices and service. Charging $100 million for a wholesaler license is not a way to get more wholesalers. End state-required exclusivity contracts for products; if a wholesaler and producer/importer want to enter into an exclusivity contract, that's up to them and their lawyers, but the State has no interest in mandating it. Another law that was written by the industry...and it's about time we got laws written for the consumers.

These six points will make me no friends in the industry. They completely upset the apple cart, and may ruin long-established family businesses. But they will create new businesses, and the solid family businesses will thrive and succeed...as long as big businesses, chain retailers, aren't allowed to write this privatization bill.

We get one shot at this. Get in touch with your Representative now, today! Tell them you want a better privatization bill. You want a fair privatization bill. You want them to work for you.