State Public Hearing Sought On LCB Allegations

OCEAN CITY — Alleged
accusations and state investigations have now led to a petition calling for a
public hearing on the Liquor Control Board for Worcester County by the state
Comptroller’s Office.

Area liquor licensees
have acquired more than 400 names since last Friday hoping to capitalize on an
obscure section in Article 2-B in state law that would call for the comptroller
to hold a public hearing to address allegations against the LCB.

The petition, which
alludes to section 10-403 of Article 2B of the Maryland Code reads, “We, the
undersigned, support filing a complaint with the Comptroller of Maryland to
conduct a hearing regarding alleged violations of Maryland law by the Worcester
County Liquor Control Board and its dispensary officials.”

Later in the petition,
it alludes to the specific section in Article 2B reading, “The Comptroller …
upon written complaint of ten or more citizens, residents, real estate owners
and voters of the precinct in which any licensed place of business is situated
… after a hearing … upon the complaint, notice of which shall be given to the
licensee at least ten days before the hearing, revoke or suspend any license
issued under the provisions of this article.”

The petition also
outlines eight specific allegations that those who sign said petition would
like the comptroller to investigate and address at the hearing.

“We needed only 10 names
and we have more than 400 in just a few days of passing these petitions out,”
said Chris Denny, who owns Cheers! in Berlin and is a ranking member of the
Worcester County Licensed Beverage Association (WCLBA). “There needs to be a
hearing in addition to the ongoing investigations and audits so we can get some
answers on all of these allegations that continue to come forward concerning
the practices of the LCB in this county.”

Some of the allegations
have been brought forward in a public forum, including the March $5 Stoli vodka
promotion that allegedly sparked the state’s ongoing investigation for selling
liquor at a different price to different licensees on the same day, as well as
the accusation that the LCB sold the liquor below cost, which would also be a

In both of these
instances, LCB officials claim that they offered the promotion to all licensees
at the same price, and they used depletion allowances to acquire the bottles
for less than the $5 charged per bottle during the promotion.

In addition, LCB board
members claim that the $5 a bottle promotion, which has gotten so much
attention and proverbially raised so many eyebrows to their alleged business
practices, is not an uncommon promotion in the business, citing a 2009 Reliable
Churchill promotion that offered Stoli at $6.99 (1 liter) and $4.79 (750mL) a bottle.

Other allegations listed
on the petition include “improperly revising county dispensary records”, which
is thought to stem from reports from former employees of the LCB who claimed
that inventory records were either overstated or understated, and “improperly
providing goods to licensees”, which according to licensees has to do with
Hamilton Beach orange crush machines being given to several local licensees by
the LCB.

Licensees claim that
there is a monetary limit to what the LCB can giveaway to a licensee and they
claim that the Hamilton Beach machines, which allegedly retail for $50, exceed
the allowable limit by law.

The petition also claims
that the LCB, “exceeded its authority by banning the sale of competitive
goods”, which is presumably referencing the two-week ban on Absolut vodka that
the LCB instituted in July of 2009, and it also cites “illegally storing
products in an unlicensed warehouse.”

Licensees say that there
have been rumors and reports that the state’s investigators are looking into
usage of unlicensed space by the LCB to store liquor. Accusations have ranged
from personal garage space to the West Ocean City retail store as places the
dispensary has stored liquor illegally.

However, the same laws
that a licensee is held to as far as storing alcohol, is a bit different when
compared to what the four LCB’s in the state can do. In the case of Worcester
County, (as well as Wicomico, Somerset, and Montgomery counties), the LCB’s
retail stores are considered extensions of their main warehouse, thus making
the claim about the West Ocean City location null and void, according to
state’s officials.

The final two
accusations on the petition pertained to comments LCB officials made concerning
huge revenue losses in the last three years, as well as “untruthful public
statements in its official capacity regarding bonuses and directives from the
County Commissioners.”

“One of their many big
lies is that they said no bonuses had been paid while their net profits were
dropping off, but the truth is that in 2009, there were $30,000 in bonuses
while their revenue dropped $460,000,” Denny said.

WCLBA President Doug
Buxbaum said that the petition is comprised of more that just a few angry
licensees, which he says shoots down what the LCB has claimed has been going on
all along.

“There are licensees and
those in the industry on this list, but there are also teachers, and mothers,
and former politicians, and voters on both sides of the political coin on this
list,” said Buxbaum, “and if the LCB claims that they want to be transparent to
the people of Worcester County and be vindicated by the truth as they claim
they will be, then they should sign this petition, too.”

LCB spokesman and board
member Larry Wilkinson said via email this week that he had been informed of
the circulating petition and that he was not opposed to a public conversation
concerning the quasi-governmental monopoly.

“We are aware of the
petition being circulated thanks to several licensees
who were kind enough to call and tell us they refused to sign the petition,”
said Wilkinson. “It has always been our intent to request being put on the
County Commissioners agenda for an open meeting when our annual audit and the
State audit are complete. Our plans haven’t changed.”