A PLCB Mystery - The Case (or Ten) Of The Missing Four Roses

Ever watchful, our intrepid sleuth is always on the lookout for ways the PLCB pays lip service to taking care of the citizens. 

On August 21st, Four Roses sent out a press release listing what this year's Four Roses Limited  Edition Small Batch will be, and more importantly, how MANY they planned to make. There was to be a release of about 12,600 bottles total. From what I have learned over the years, about 80% stay in the U.S., and the remainder are for the rest of the world. Can I prove it? No, allocation is a very closely-held card by the distillers and distributors, since there is always somebody who will take issue with it. Needless to say, like any other business, good customers usually will do better than ones that are more difficult (I bet you can see where this is going).

So about 10,000 bottles of this year's Limited Edition were destined for U.S. customers. Dividing up by state would yield 200 bottles per state. Great for North Dakota and Rhode Island; not so good for the rest of us. Allocating by population is a more fair way to guess, and with 4% of the U.S. population, Pennsylvania would get about 400 bottles.

So how many did we actually get? 24 bottles were announced to be sold in a lottery; registration ran from 8 a.m. Oct 26th to 11 p.m. Oct 31st. (No surprise that it didn't actually open until about 8:30 a.m.) But wait!  There's more! Right after the lottery was announced, I wrote a letter to the PLCB asking where all their buying power was and why they had such a poor relationship with the distributor that we got well below what we normally would have. Imagine my surprise when 3 days later, the PLCB announced they had gotten another 42 bottles to raffle off, for a grand total of 66, of which 16 would go to licensees.

No. This is not for you 
silly PA consumer.

Is that fair?  We'll never really know, because we won't know how many bottles the PLCB really had, since they had it listed as an SLO item in August, weeks before the lottery announcement. However, if you called and tried to order it you were told it was a "licensee only" item. So how many were sold to the bars and restaurants the first time, before they got ANOTHER chance? Why did the state get so few to begin with? Is this an indication of what is really thought of the PLCB? Or did the public just get screwed by the PLCB because a normal amount was allocated and they sold it to licensees first?

Also, who is watching all these lotteries?  The PA lottery is certified by outside public firms, the PLCB lottery is...what? I haven't seen or heard about any safeguards in place. Who checks to make sure this is all on the up and up? Are we just supposed to believe them? I'm not saying it isn't legitimate, but I am saying it is hard to believe, when the transparency at this agency is like looking in the Susquehanna after a rainstorm. They certainly haven't done anything to earn my trust so far.

Get rid of the state store system and move Pennsylvania back to normal.



P.S. For those keeping track we reached a small milestone. This is the 400th post of the blog.  It took us seven and a half years to get to this point.  Here is hoping that our job will be done long before we reach 500.

Any of this sound familiar?

Has it been 30 years already?

In 1985 it was recommended that the PLCB implement a paperless licensee image filing system, in 1992 the PLCB said it was in the process of doing so. In 2014, 30 years later, the process isn't finished yet: every store has paper files for the licensees that regularly use them.

In 1985 the PLCB was tasked with developing alternative pricing strategies that fit within the liquor code. This was done but never implemented, and here we are in 2014 hearing that as part of "modernization," they want to develop alternate pricing strategies.

Again in 1985 the PLCB was told to "Improve marketing of PLCB products by responding to customer demand and properly handling wine and spirits." In 1992 the PLCB said that "Store customers were surveyed and customer service training for store personnel has been enhanced." I'm not sure I believe that.

This one is too funny to be anything but true coming from the PLCB.  In 1985 they were asked to "Establish accepted business practices for commercial licensees e.g. credit privileges and product delivery." Now they did eventually let licensees pay with credit cards, but said "The delivery option was tested but not implemented due to lack of interest." They must mean the PLCB's lack of interest since you won't find a bar or restaurant that doesn't want liquor delivery.

You might have thought that TableLeaf and the others were new ideas thought up, as Joe Conti lied about, because there was a glut of California wine. But in the late 80's the PLCB established a wine advisory panel to help with its private label wine program.

After it was recommended that the PLCB "Eliminate the requirement that permanent part-time employees be certified by the Civil Sevice Commission," the PLCB said they were working to improve the process. 30 years later, they are still working on it.

If anybody tells you what a great job our state system does just remind them that: The PLCB -- through the spun-off enforcement arm called the BLCE (Bureau of Liquor Code Enforcement) -- isn't doing their job. Between 1989 and 1992 there were 300 arrests for bringing in untaxed liquor from out of state. Last year there were two and this year just one so far out of literally millions if not 10's of millions of violations.

All of the above was taken from the May 1992 Legislative Budget and Finance Committee performance audit of the 1985 Audit recommendations. The more things change, the more they stay the same.

Seriously? This is the agency that wants us to believe that this time they really really are going to do what they said they would. Just trust them this time.

I got a better idea: privatize.

Gypsies, tramps, and thieves.

By now, you have heard that the leadership of the PLCB is full of crooks. We already knew that it was full of incompetence: just look at date-rape ads, buying mom vodka for mother's day, the born-to-fail wine kiosks, computer systems 158% over budget, and who knows how much more that hasn't even been exposed yet. Meanwhile, the CEO, Chairman, and Marketing Director were out having a good time when they should have been working (The board only works 22 partial days a year as it is), taking gifts and then conveniently forgetting to report them. Maybe "conveniently" isn't the right word, since we all know the PLCB isn't convenient. How about we say "on purpose" instead....yeah they forgot about $2000 golf trips on purpose, or forgot about a few thousand in free booze on purpose. That sounds more like it.

While the ethics committee has no teeth itself, they apparently thought that these good ol' boys were just  playfully forgetful....after all, what PA legislator hasn't taken a favor or two or two or eight thousand? So they got caught; just fill out the paperwork and pay what you should have paid -- nudge nudge wink wink -- and everything will be fine.

I'm not sure if our AG saw a chance to make a point, or if she really felt these people should pay more than restitution, or if it made her skin crawl that a so-called public servant would disrespect the citizens as they did, but she at least refereed the case to the Dauphin County DA, recusing herself... since her husband has a $12 million contract with the PLCB.  Nepotism isn't new in Harrisburg but this was a bit to high profile to not be noticed.

As reported in the Intelligencer:

Unfortunately, this type of corruption is a symptom of a much larger problem: the government’s complete control of the sale and distribution of wine and spirits in Pennsylvania. If government bureaucrats did not have the sole authority to determine what alcohol is sold in all the state’s liquor stores, businesses would have no incentive to bribe them with golf outings, fancy dinners and free liquor.

Hopefully the DA can give the people what they want:

And...now turn left, convicts!

On Hold

So, before the "PLCB is the bestest we won!!!!" crowd starts to wonder where I am... I'm really busy. I know, my anonymous "friends" have been telling me I'm obsessed about this, but the truth is, I spent the weekend with my family, celebrated a birthday, and went to the Jazz Festival in Rochester, NY (Trombone Shorty, GREAT show). And I'm in deadline mode on a whiskey book AND wrapping up an issue of Whisky Advocate. Got a lot on my plate.

To be brief, then: we ran out of time, for which I say, WELL DONE, SENATOR CHUCK MCILHINNEY, your plan worked! Your hearings really wasted time, and made it impossible to get a liquor privatization bill passed before the June 30 deadline. So you're down as having tried, but you're not on the hook with your beer and union donors for having actually passed a bill. Be careful that fence doesn't split you right in half, now. And Senator Tomlinson? One word for you, fella: primary.

And it's not over. Things don't usually get done in the Fall session, but there IS a Fall session, and that Transportation bill needs to be passed. Let's push on this. Liquor privatization has never come this far before; don't let it fall on the floor.

Details...Why So Late, Senator?

In the wake of yesterday's endorsement of SB100 (such as it is; I'm just a blogger, fergodssake), I have to bring up this: why did it take so stinking long?

Here we are, shoved up against the legislative deadline, with only 10 days to get this bill out of committee (which is apparently achieved but not voted), passed in the Senate (and we've already been told that the votes are not in place yet), reconciled in the House (where Rep. Turzai is not happy with the loss of wholesale privatization, and who would be?), and then signed by the Governor (which should be a slamdunk; he's not going to veto a privatization bill, and I assume he's going to have input before it gets to his desk). Now, the Gov has already said he was prepared to stick around for as long as it takes to get a budget passed, so the session may not actually be OVER on July 1...but let's stick to the official calendar for now. Why did it take so long?

I can tell you in one word: McIlhinney. Senator Charles T. "Chuck" McIlhinney is the majority chair of the Senate Law & Justice Committee, the committee that oversees the PLCB in the Senate, and he got House Bill 790, the liquor privatization bill, way back in mid-March...when he promptly -- promptly -- announced that he was going to hold hearings on the bill. Hearings that the House Republicans were excoriated for not holding...by the Democrats and the union, who knew that hearings would delay, delay, delay, and do nothing to change ANY Democratic votes -- their party discipline on this has been impressive, stoked by the hopes of a Corbett defeat and continuing union-donated campaign cash -- and likely not change any Republican votes. 

Why not? Let's face it: this issue has been around for 40 years. If you're a Pennsylvania legislator and you don't know about this issue and have an opinion, you're incompetent and should be voted out. The hearings would be an opportunity for two things: delay and bloviating. McIlhinney supplied the delay -- spreading the hearings out over six weeks -- and the Democrats, led by Senator Jim Ferlo and the UFCW's jeering yellow-shirted shlock troops, supplied the bloviation, which McIlhinney was all too ready to allow.

Meanwhile, the hearings were blatantly stacked. The first hearing was all "beware the harms of alcohol" people, who could be guaranteed to be against any kind of liberalization of alcohol policy, regardless of facts. Well, okay, we thought, that's out of the way. 

But then the second hearing was almost as bad! Representatives from Wegmans and Redner's supermarkets appeared to ask for beer in the markets (the guy from Redner's made an excellent point that the cafe requirement was slanted against smaller stores), the main desire of the citizens who only want normalcy (don't hold your breath: you ain't getting it). But after Senator Williams asked them about their "diversity plan" (sure, be good to have, but what's it got to do with the issue? And how many beer distributors have one?) and McIlhinney had brushed them aside (essentially saying, yeah, that's what you'd like, but that's not how it's going to be), it was the Pro-PLCB Express again, with the MBDA saying 'You will utterly destroy 1,400 small family businesses if you don't leave things exactly the way they are!' (paraphrasing) and the president of Philly-based Charles Jacquin Liquor Co., who said "We love the PLCB!" (actual quote, and of course he does: they sell most of their bargain-style booze here and never have to spend a dime on sales because the PLCB carries all of it at cheap prices. A marriage made in Purgatory (though mind you, I don't mind a dose of Rock 'n' Rye occasionally in the winter...)), the tavern owners (who essentially said the same thing the MBDA did: don't rock the boat, we're making good money here), and a Pennsylvania winery that's managed to get in the State Stores and...you guessed it, doesn't want to rock the boat.

The third hearing lost control. The beer wholesalers got a chance to plea for no boat-rocking. There was a moment of opposition, beautifully presented by the Wine and Spirits Wholesalers and DISCUS, and they held their ground well against Senator Ferlo and his minions. But then we got three hours of straight "The PLCB is the most amazing thing since fire!" from direct stakeholders like the unions, one of the three companies that gets paid to haul the PLCB's wholesale business (not the one that's owned by Attorney General Kane's husband, oddly enough...), and the PLCB themselves (classic moment: McIlhinney says to them, the guy from DISCUS says you can't handle wholesale for 14,000 businesses (when everyone knows they can barely handle wholesale for their own 596 stores). Can you? Oh, you bet, says the PLCB guy, with a straight face. Wonder what the tavern owners had to say about that?).

Then the Lieutenant-Governor finally gets to speak, with almost no time left, and Ferlo heaps derision on him, and the State Police commissioner, while the yellow-shirted union reps cheered, booed, and cackled. It was, as veteran political reporter Brad Bumsted put it, "unlike any committee hearing I've seen in more than three decades." And in case you think I'm exaggerating about Ferlo and the union, he also said: "Cawley and his panel, including Col. Frank Noonan, commissioner of the state police, and Secretary of Health Michael Wolf, were verbally thrashed by Sen. Jim Ferlo" and "[the state store clerks] cheered wildly for Ferlo and, not surprisingly, hooted and jeered at Cawley."He then described McIlhinney's belated call for order as "laughable."

It was a terribly cynical exercise, but do you know what the worst thing was? Not one single consumer was heard from. Not one of the people who actually have to deal with this system. The Legislature didn't want to hear from the civilians, the citizens...the voters. Why start now? They haven't wanted to hear what we've had to say about the State Stores for over 40 years!

If McIlhinney was going to schedule such a circus, a pro-PLCB parade, he could have done it in a week. All these people gave what are stock speeches; the slavishly pro-labor academic Dr. Ron Zullo delivered essentially the same speech he did at last year's hearing. There's no excuse for taking six weeks...unless you wanted to delay a vote, to jam this up against the deadline so hard that it didn't really matter what you came out with, it would be too late to get it through.

Don't believe me? Then tell me why, if the last non-meaningful hearing was over two weeks ago, McIlhinney only announced his "plan" on Tuesday...and still has not actually released a bill for examination? More delay. We read today that his committee won't be considering the bill till next week. The last week of the session.

Because of McIlhinney's delaying tactics, we now have this lump of a bill. I'll support it, and urge its passage, because it's all we have time for. We won't be able to get a good law, because the Senator successfully wasted the time he had. 

Would HB790 have passed the Senate? Probably not. And McIlhinney's deliberate delays ensured that we would get this mishmosh instead. But if we don't pass this, it's going to be ten years till we get another chance to get this ludicrous relic off our backs. Thanks, Senator. I sure do hope the Republican Party remembers what you did to them when election time comes around.

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.

Republicans Selling Privatization Down the River

I hate to say this, but privatization may be dead...again. And to my deep disappointment, it's the Republicans in the state Legislature who are killing it. Check out this action in committee this week:

o HB 260 (Rep. John Taylor, R-Philadelphia): Allows the Pennsylvania Liquor Control Board to implement customer relations marketing programs to offer incentives to customers, extends the Sunday closing time from 5 p.m. to 9 p.m., removes the limit on the number of stores allowed to operate on Sundays, increases the range of fines for minor violations of the Liquor Code from between $50-$1,000 to between $100-$2,000, and increases the range of fines for major violations of the Liquor Code from between $1,000-$5,000 to between $2,000-$10,000.
o HB 1356 (Rep. Scott Petri, R-Bucks): Allows the Pennsylvania Liquor Control Board (PLCB) to hire employees outside of the Civil Service Act, allows the PLCB to establish a classification and compensation for these employees that shall not be subject to the Administrative Code, and allows the PLCB to purchase all goods and services deemed necessary at its sole discretion.

Let me translate that for you. HB 260 will let the PLCB offer coupons and 'membership' programs, open all their stores till 9 PM on Sundays, and dump more money into the PLCB's budget through fines (fines that are, I'd remind you, imposed by what amounts to an independent system of courts and police). HB 1356 will allow the PLCB to become a total patronage pesthole, hiring whoever they see fit -- under the guise of hiring wine and spirits "experts," experts along the line of Joe Da CEO, I assume -- and buying whatever they want -- more kiosks? more crap vodka brands? more 7' tall bumblebee costumes? -- without any oversight.

I can make it simpler: the Republicans in the Legislature are lining up to give the PLCB bureaucrats everything they asked for to stave off privatization. Why? Cui bono might be a better question. Who got to these guys? Why are they not listening to the voters and citizens of Pennsylvania, who have been consistently polling at over 2/3 in favor of flat-out privatization?


Do you give a damn about privatization? Write your legislator, ask them why they're preparing to ignore the will of the people on this. If privatization goes away this time, it's going to be 20 years before we get another shot at it.