OLCC: Clean house, or tear the house down?


The schoolmarms on the O's editorial board rose from their tuffets the other day to deliver a stern lecture about the Bourbongate scandal at the Oregon liquor board. It seems the O, which broke the scandal (its first in a while), wants everybody down there fired, and the board of directors replaced. The editors are so peeved that they even called out by name the six managers who hogged the Old Pappy hooch. Ouch,! Now, that's not Portland Polite™.

While hoarding premium alcohol may not seem to be the most dastardly of scandals, it’s important to consider how this could occur. [Agency CEO Steve] Marks and the five others found to have engaged in the scheme – deputy director Will Higlin, budget manager Bill Schuette, distilled spirits program manager Chris Mayton, chief information officer Boba Subasic and information services office director Kai Nakashima – were able to get such special access only because of the unique role that OLCC holds.

Well, bully for the O. But I'd go a step further and suggest that this might be a good time to get the state out of the business of selling alcohol altogether. Most states let the grocery stores do it, subject to regulation. The idea of state stores is a throwback to the 1930s, when the world of getting a buzz on was far different from what it is today. This is Oregon 2023. We have essentially legalized heroin, meth, coke, you name it. In that light, it's beyond absurd to think that the state has to be the one selling Grandpa his pint of Old Crow.

But while we're on the subject of the OLCC board, an alert reader has asked who they are. The current commissioners are shown here. They are Paul Rosenbaum (chair), Jennifer Currin, Dennis Doherty, Kiauna Floyd, Fay Gyapong-Porter, Matt Maletis, and Marvin Révoal. A couple are lawyers, one's a dentist, a couple are in the restaurant industry, a couple are insurance guys. Two of them have been on the board of the De Paul rehab outfit. (Now that Oregon has a new congressional district, eventually another commissioner is likely to be added at some point.)

You have to wonder if any of the commissioners have ever gotten preferential treatment at a liquor store themselves. Naw, that can never happen. Human nature doesn't apply in the Beaver State, right, kids?

Can the governor remove them? Yes, but she needs a reason:

The Governor may remove any commissioner for inefficiency, neglect of duty, or misconduct in office, giving to the commissioner a copy of the charges made and an opportunity of being publicly heard in person or by counsel, in the commissioner’s own defense, upon not less than 10 days’ notice. If such commissioner is removed, the Governor shall file in the office of the Secretary of State a complete statement of all charges made against such commissioner, the findings thereon, and a complete record of the proceedings. [ORS 471.710(1)]

Could "neglect of duty" by the commissioners be made out in this case? Surely the flap that's now been caused is going to lead to "inefficiency." Even more than usual.

In any event, the board has its monthly meeting this Wednesday at 9 a.m. That could be an interesting session. Then again, they may all act like there's nothing going on, which would be more typical board bobblehead behavior. Or give it the old "We can't say anything because it's under criminal investigation." How convenient.

Like many people, I'm having a good time following this story. The guys who elbowed their way in to get the good stuff need some serious punishment, but you have to admit, it is kind of funny. Maybe it will lead to the downfall of the state liquor stores around here. Lord knows, it's long overdue.

Comments

  1. Aren't the Maletis family beer distributors? How is that not a five-alarm conflict of interest?

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    Replies
    1. Probably wanted someone on the board the knew a little about the subject

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    2. The state statute creating the OLCC requires a certain minimum amount of food and beverage industry representation on the board.

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  2. Do the OLCC commissioners get paid?
    Or just preferential treatment to buy rare booze?

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  3. Will they be able to keep their PERS?

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  4. I'd stick with what we've got, but not because I like the OLCC, but rather the alternatives. Two states to compare to:

    California: Private all the way. Many, many distributors. You can easily get your Grey Goose and Jose Cuervo cheaply and conveniently (that's good!). For harder to find bottles, prepare to pay astronomical prices (things like Blanton's, Weller, Springbank or Octomore scotch). By the time this gets from one of the many distributors all competing with one another to your local liquor mart, you're looking at $300-$600 for something the distributor bought for $40-$75. How do I know it's $40? OLCC has a very light markup on these, so that's why we have Blanton's bourbon for $60 and it sells for $200 all day long in California.

    Washington: Private, but taxed to all bejeezus due to the ridiculous privatization law that Costco ghostwrote in 2012. People didn't realize or chose to ignore that the bill was like "sure, go nuts. We're still gonna take the same tax money as if it were private." So unless Costco is selling entire warehouses of something, you're paying the highest prices in the nation. Absolute best case: You're paying the same price as any Oregon store. There's a reason you see Costco make a run at this in Oregon every year, and of course we'll gladly sign up for the Washington tax bomb version.

    Personally I'd rather be able to get a shot at harder to find stuff at normal markup than slightly cheaper vodka from Costco or Winco. Us mortals will never see a bottle of Pappy unless we win the allocation lottery, own or know someone who owns a liquor store, or happen to be an OLCC employee (RIP 2023).

    But I often find bottles of whiskey that are $300 down in CA and by virtue of OLCC's markup restriction, I'm out the door for $50. I'll take the single state-controlled distributor over an uncontrolled gang of them.

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    Replies
    1. This comment nails it.

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    2. You are spot on. It's absurd that liquor is highly regulated and controlled in Oregon whereas hard street drugs are not. And I'd bet that most of the homeless people who are addicted are hooked on hard drugs, not alcohol.

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    3. People forget that the operative word in the old title was control.

      The pencil necks won’t give up control without a fierce fight.

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  5. Jettison the OLCC and its absurd mark up system. The state basically assigns a 100% mark up (tax) to the wholesale price of liquor and then pockets the difference when they sell it to us (after expenses).

    This operates as a luxury tax on premium spirits, while subsidizing the social cost of swill. The only reason to tax booze is to make up for the government's cost of addressing irresponsible users (addicts and the bad choices of people under the influence). But under the current system one $600 bottle of top shelf bourbon is taxed more than 60 bottles of $9 swill (e.g., Potters vodka). Which $600 purchase produces more DUI's and Domestic violence calls?

    They should be taxing alcohol by volume - similar taxes for similar levels of intoxication. The price of swill will go up, but the price of decent booze will fall. We could afford a better class of booze without the OLCCs luxury taxes.

    ReplyDelete

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