State’s LCB Probe Extended As Allegations Continue

SNOW HILL — The official
audit has begun, but the investigation is scheduled to continue far longer than
was originally expected.

Auditors from the State
Comptroller’s Office descended on the Liquor Control Board for Worcester
County’s (LCB) Snow Hill headquarters this week to conduct the official audit
of the quasi-governmental monopoly, but the investigation concerning
allegations against unfair practices and procedures has been extended,
according to state officials.

“Based on the number of
allegations that continue to come to the surface, as well as things that we are
finding, the investigation is definitely going much longer than we originally
thought,” said Comptroller’s Office spokesperson Christine Feldman. “The
findings from the audit should take a few weeks, and I’m not sure how long the
investigation will take at this point.”

Feldman said that the
state’s investigators must look into any and all accusations against the LCB,
but the office is staying tightlipped about what it is finding, and Feldman
said results from the official audit that is currently underway might not
become public knowledge.

“The audit is looking at
numbers and tax collections and those numbers won’t be made public unless legal
action is filed against the LCB,” said Feldman. “However, if the investigation
that is ongoing finds a reason for suspension or revocation of their license,
the LCB would be notified of a public hearing in Annapolis and that would be

On Wednesday, at the
LCB’s weekly meeting in Snow Hill, Board member Larry Wilkinson, who serves as
spokesman for the organization, said the group would no longer be addressing
any allegations against the 75-year-old county monopoly now that the state has
gotten involved.

“Since the state has
gotten involved, we feel that it is in everyone’s best interests not to comment
on any allegations until the state’s audit and our official audit are
complete,” said Wilkinson.

LCB officials say that
there has always been accusations of wrongdoing and a desire from the licensees
to have the dispensary go away, but they believe that the most recent campaign
of sorts to have the LCB abolished is because of the depleting revenues that
they’ve turned into Worcester County in recent years, most notably, the
$110,000 it submitted this year, as compared to more than $400,000 the previous
year and almost $900,000 back in 2003.

“There’s so much dust in
the air right now about alleged wrongdoing by us,” said LCB Executive Director
Brian Sturgeon, “but we believe that when these audits are completed it will
show that we have cut back our expenses contrary to belief, and the fact that
we tried over the last three years to give the licensees of Worcester County
the best prices around is what brought our revenues down. Not any wrongdoing by
anyone here.”
There has been a heightened interest in the official audited fiscal year 2010
LCB reports in recent months from licensees, and political officials throughout
the county, who are once again asking the question, “should Worcester County be
in the liquor business?”
Wilkinson said that the LCB expects the internal audit to be completed in
upcoming weeks, but did concede that the monopoly has changed its business
model (making money for the county rather than saving money for the licensees)
based on the record low payout given to the county this year.

“The people who are
asking where has the money gone on our end, should ask the businesses around
town where their money has gone,” said Wilkinson. “I would be very surprised if
there were many businesses in Worcester County that have showed an increase in
their bottom line over the last three years.”

In 1998, the people of
Worcester County voted in a referendum to keep the LCB in power, rather than
abolish it, after the group allegedly spent a substantial sum of money to
advertise that abolishing the LCB would mean, amongst other things, a
proverbial liquor store on every corner, or at the very least, a proliferation
of more liquor licenses to make up for the revenue that the board put back into
the county’s pocket.

The LCB also got former
Ocean City Mayor Roland “Fish” Powell on its side to convince voters of the
merits of the LCB’s role in the county, which according to those on the other
side of the vote was a deciding factor in 1998.

The LCB claims that
those business owners who were part of the 1998 campaign to abolish the group
are once again spearheading this current campaign of sorts, and all members
feel as though they will be vindicated at the completion of the audits.

It should be noted, that
liquor license distribution is handled by a totally different entity in
Worcester County, the Board of License Commissioners, and not the LCB, whose
only role is to dispense alcohol.

Tom Coates, legal
counsel for the Board of License Commissioners, said that the board has had “no
discussions” concerning allegations or ongoing investigations of the LCB, and
would not put any plan in place for how it would handle life in Worcester
County without an LCB until after that decision is made by state legislators.

“We follow Article 2-B,
and until it’s written into law, we will make no plan or comment about the LCB
or how we will handle future liquor licenses until that happens,” said Coates.

As the investigation
continues in Snow Hill, licensees in Ocean City are allegedly making plans to
figure out how to replace the revenue that the LCB gives back to the
county.  Reportedly, an impact study is
being considered by the Worcester County Licensed Beverage Association in order
to find the best way to replace the revenue if the LCB were to be abolished.

Even with a new plan in
place however, primed to give more money back to the county, rather than save
money for the licensees who had been struggling with the economic times, the
LCB remains unsure if the changes will be enough.

“We are up so far this
year (6.6% for wholesale, 2% retail), and we are making up the money we lost by
trying to help the licensees,” said LCB Board member Joe Jackson, “but our next
year’s numbers won’t be available until next June, so I’m not even sure if it’s
going to matter at this point.”

Added Wilkinson, “we
feel like we’ve done what we could do to right the ship, but the General
Assembly reconvenes in January, and our next set of numbers won’t come out
until June, so who knows what could happen, because it seems like everyone
wants to see us abolished.”