To halt PLCB corruption, end Pa. liquor monopoly
The most recent ethics investigation involving a Pennsylvania Liquor Control Board official uncovered more than the usual examples of corrupt behavior.
In November, the state Ethics Commission ordered former PLCB Chairman Patrick Stapleton III, former CEO Joe Conti and former marketing director James Short to pay the state more than $23,000, the approximate value of gifts they received from prospective PLCB vendors.
Last week, another former PLCB executive testified about an elaborate culture of unethical conduct that was condoned and even encouraged at the highest levels of the state liquor monopoly.
Timothy Fringer, former PLCB chief of product selection and category management, “routinely accepted meals, tickets for entertainment functions, and gifts from PLCB vendors,” according to an investigation adjudication released Friday by the Ethics Commission.
“Fringer asserts that he received explicit and implicit direction from the (LCB) director of marketing and merchandising, as well as from the director of product selection, to accept items from vendors including alcohol, dinners and the like,” the adjudication report reads, adding, “he was told that the director of marketing and merchandising, and/or the director of product selection, were aware that PLCB employees received gifts from vendors, but so long as no one complains or talks about it, ‘it never happened’.”
The Ethics Commission’s ultimate finding is that Fringer’s contention of widespread acceptance of gifts by LCB employees — with the knowledge and approval of supervisors — is essentially valid.
While the findings are disappointing, they can be explained, but never condoned, in light of the nature and mission of the PLCB.
Founded in 1933 at the repeal of Prohibition, the LCB has pursued two distinct missions:
n To control the legal purchase and consumption of alcoholic beverages through licensing and enforcement of liquor laws.
n To market alcohol sales and sustain a profit through its more than 600 retail stores.
Therein lies the conflict: The LCB not only regulates the monopoly; it is the monopoly — tasked with promoting optimum sales of the product which it’s also tasked to control.
This condition apparently makes it irresistible for wine, beer and liquor producers and distributors to offer gifts as part of their sales strategy.
The practice of giving and receiving gifts is a routine part of the private sector. If a vendor wants to take a retailer out for dinner, that’s nobody’s business but their own. However, when the retailer is also the government regulator, gifts are forbidden.
It’s compelling to note here that the PLCB has had a “white line” policy since 2006. The policy expressly forbids PLCB employees from accepting anything from vendors. The marketing director at the time, James Short, never implemented the no-gifts policy in his purchasing department.
This is a double standard which never should have existed. Indeed it would not exist if the state were to sell off its liquor monopoly.
The Liquor Control Board is an archaic, 82-year-old bureaucracy that has outlived whatever usefulness it once had. It obstructs free enterprise and is failing in its role of regulatory agency. And the state Ethics Commission reports that it is rife with corruption.
Sure, it’s making money — name a monopoly that can’t make money. But it also wastes a lot of money.
Sale of the liquor system has been discussed in Harrisburg for years. Now is a better time than ever to achieve that goal.
