County Believes Politics Causing Comptroller To Stall Wholesale Liquor Distributor Probe

County Believes Politics Causing Comptroller To Stall Wholesale Liquor Distributor Probe

SNOW HILL — Word is still out on whether a complaint lodged by the Worcester County Department of Liquor Control (DLC) against liquor wholesaler Reliable-Churchill has triggered an investigation by the state Comptroller’s Office.

The state is only willing to acknowledge it receive the letter at this point and would not confirm nor deny an investigation. It’s been a little over a month since the county filed an official complaint with the Comptroller’s Field Enforcement Division asking for an investigation into a transaction made between the DLC and Reliable-Churchill.

DLC Director Bobby Cowger said this week there has been no response so far from either Reliable-Churchill or the Comptroller’s Office to the county complaints and no signs of an investigation.

The Comptroller’s Office confirmed Monday it received the letter of complaint but is not in a position to comment. The county didn’t even know that much, said Cowger, since the state has had no contact with Worcester over the letter.

The alleged lack of forward motion with any kind of investigation is a far cry from how the Comptroller’s Office relentlessly chased complaints against the former Liquor Control Board (LCB), the DLC’s pseudo-governmental predecessor, Cowger asserted. The complaint that the county has made against Reliable for alleged price manipulation was a major issue for the now dissolved LCB.

“What’s aggravating is that the old LCB did this same thing and they were crucified and the Comptroller more or less stopped everything that they were doing,” said Cowger, “and got down here to investigate and spent months investigating it.”

Cowger suspects that Comptroller Peter Franchot and his office may be dragging their feet or choosing to sweep everything under the rug due to politics. Franchot has made no secret of his opposition to certain government-run liquor operations, similar to the Worcester DLC, in Montgomery County and does have some ties to spirits companies such as Reliable.

Last month, Franchot pushed for an end to Montgomery County’s own Department of Liquor Control, one of the few besides Worcester’s to still exist in Maryland. Franchot called the Montgomery County system the “last bastion of a medieval state system where the county, if you can believe it, sells all the spirits, alcohol, and we’re not just talking retail, we’re talking wholesale,” as reported by Bethesda Magazine.

As for ties to private alcohol wholesalers, it’s fair to note that Franchot has received a few small or modest campaign donations from such entities, including a $4,000 donation from Reliable in December of 2011.

“He’s well-funded from the wholesalers. In an election year like this, he’s not going to do anything to jeopardize or stir-up anything against them,” suggested Cowger.

The $4,000 donation was a veritable drop in the bucket for Franchot’s overall campaign but does make him Reliable’s most heavily donated to public official in Maryland.

The DLC lodged its official complaint and request for investigation by the Comptroller’s Office on Aug. 27. The nature of the complaint was that the county purchased 400 cases of Captain Morgan spiced rum at an advertised sale price of $12.79 per bottle back in April. The county made the purchase due to alleged representation from Reliable that the price per bottle would be locked until October.

But the price per bottle of Captain Morgan was dropped in July to $9.99. Had the county bought in at that price, it would have saved about $8,300 over the 400 cases purchased.

Worcester officials repeatedly attempted to contact Reliable over the perceived price manipulation and when the wholesaler failed to respond, the county sent a letter to the comptroller requesting a state investigation.

“Because of Reliable’s false and/or misleading April advertisement, DLC overpaid $8,310.40 for Captain Morgan Spiced Rum and is now unable to be competitive in selling that item,” read a letter written by county attorney Sonny Bloxom. “DLC contacted Reliable about the issue demanding an explanation and a refund, but to date, Reliable hasn’t responded and apparently is not going to do so.”

The county’s position is that the price drop on the product was a deliberate maneuver made by Reliable to mislead the DLC into buying a large amount of product at a higher price “therefore putting the county in an uncompetitive market position vis-à-vis Reliable.” It’s a deliberate knock on the head to the DLC, claimed Cowger, who confirmed that the county’s wholesale revenue is down about 35 percent since the private wholesale market was opened by the Sunset Provision in July.

But initial expectations that Franchot’s office would intervene were low and after a month without contact now nearly extinct.

“I don’t feel optimistic at all … Our only recourse is to go to them and when they ignore us there’s nothing we can do,” said Cowger.

If the case was extreme enough, the DLC could pursue the issue in court but Cowger said that the time, effort and legal fees would almost certainly outweigh the $8,300 lost.

The county’s case isn’t entirely a slam-dunk, either. The original advertisement flyer that was issued by Reliable stated that the $12.79 per bottle was a “projected price” until October. The county’s letter does not include the word “projected” when discussing the flier and instead simply reads that the advertisement promised that “this deep price will not return until October.”

Whether the lack of the “projected” modifier was an oversight or intentional, Cowger argued that it is irrelevant. Since first starting to deal with the DLC in November of 2012, Cowger claimed that Reliable has always “stood behind their price” even when it was marked as “projected” and that this incident is the first time in two years when the county has bought into what it assumed to be a locked price only to have the cost drop.