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.