Bev Perdue, NC Officials Have Their Eyes On Charlotte's ABC Board

Tightening The Reins On North Carolina's ABC Boards



North Carolina's patchwork system for selling liquor grew out of the days after prohibition, when the powers that be worried about controlling who could buy liquor.

Today's state leaders, from Gov. Bev Perdue to top legislators, say that what's needed now is tighter control over who is selling booze.

Local Alcoholic Beverage Control boards, which run the liquor stores across North Carolina, find themselves under state officials' magnifying glass because of embarrassing episodes involving boards on opposite sides of the state: a lavish dinner for local ABC board members in Charlotte paid for by a liquor company and eye-popping salaries for top ABC administrators in Wilmington.

n the most immediate response, Perdue plans to ask the 163 local boards to agree to the ban on gifts and tighter ethics rules that she has imposed on state agencies under her control. She has also commissioned a special budget reform task force that is looking at more fundamental changes in the system and installed a new alcohol chief at the state level with directions to rein in the local boards.

The local boards that don't comply with the gift ban, she said, will get star billing on a state Web site that will list the boards and whether they have signed on to the new rules.

"We're going to know who has agreed to come along on transparency and accountability," Perdue said last week. "I'm going to go forward with the belief that every board will come along."

Joe Wall, executive director of the N.C. Association of ABC Boards, said he didn't expect many objections.

"In general, the boards are willing to accept a strengthening of the rules in that area," Wall said.

Perdue's efforts to provide more transparency and accountability follow the liquor company Diageo's bankrolling a $9,000 dinner in November for the Mecklenburg ABC board's chairman and a variety of employees and the disclosure of New Hanover County's ABC board parceling out more than $330,000 in salaries and $50,000 in bonuses to the father and son serving as top administrators.

"Something is not working in the system," said Perdue, herself a former member of the Craven County ABC Board. "And though many of us for years have believed in local control and local ABC boards, who would have thought this kind of stuff is going on?"

North Carolina has a conservative history with spirits. The state banned liquor even before national Prohibition and didn't allow public bars and restaurants to sell mixed drinks until the 1970s. Local communities, from the tiniest hamlets to urban hubs, decided for themselves whether and in what form to sell alcohol. It's a legacy that leaves a byzantine mix of liquor stores, rules and availability from one county to the next that frustrates newcomers to the state.

The state ABC Commission operates the warehouse through which local boards buy liquor and adjudicates liquor law violations, but it has little authority over the local stores. A 2008 legislative report described the system as lacking a clearly defined mission and needing more muscular state control.





Next steps

Perdue's pressure is only the latest steps in her administration's effort to reshape the commission.

Perdue plans to ask her state budget director, Charles Perusse, to examine salary data for the local boards that is being compiled by the state ABC Commission. Perusse will report on how those paychecks stack up against comparable private sector jobs.

ABC boards, which runliquor stores in North Carolina, are local government agencies, giving the state limited authority over them. The staff works for the local board, not the state. Perdue, however, said that if she needs to get directly involved to straighten up the system, she will.

"If I find out I need the authority to let people go," she said, "I will ask the General Assembly for that authority, and I have every reason to believe the people of the House and Senate will go along."

Change may be slow

Senate President Pro Tem Marc Basnight, who said he is looking at a range of proposals that include privatization, highlighted problems such as counties with multiple ABC boards - Brunswick County has nine - and the low bar of 500 signatures to get a proposal on the ballot to create another ABC board. He said the system needs fundamental change.

"It's obvious that has to occur," Basnight said, referring to the Mecklenburg and New Hanover incidents. "We've seen and read about the mismanagement of certain districts."

Basnight and Rep. Pryor Gibson, an Anson County Democrat and vice chairman of the House ABC committee, cautioned that change will be made incrementally. Gibson said this year's "short" legislative session, which starts in May and likely ends during the summer, will allow little time to address such a complex issue.

"We will probably try," Gibson said, "but it's so complex. I'm not sure we can get a solution that's completely logical in a 45-day session."

Wall, at the North Carolina ABC boards association, said the Mecklenburg and New Hanover cases are aberrations. The association favors increasing the oversight by the county boards and city councils that appoint them but also stands by the state's record as one of the highest in liquor tax revenue but lowest in liquor consumption.

"That's a good indication," Wall said, "that the current system is sound and doing what the citizenry of the state wants it to do."

Perdue has been pushing for reforms of the ABC system for several months, though it has not been a top priority for an administration consumed by a constant budget crisis. She is using her Budget Reform and Accountability Commission as a vehicle for proposing broad changes, such as strengthening the state ABC Commission's ability to enforce minimum standards for stores and consolidating competing, unprofitable boards.

Norris Tolson, who heads the budget reform commission, would not predict recommendations but made clear that the commission sees problems that need fixing in the ABC system.

"It has been run with a sort of laissez faire attitude, just let it go. You get into the sort of problems that manifested themselves [recently]," said Tolson, president of the N.C. Biotechnology Center. "One has to ask oneself, why do you need that much bureaucracy to run a system of selling liquor?"

Perdue's other major step was to appoint Jon Williams, a former deputy secretary for the state Department of Crime Control and Public Safety, as the new chairman of the state ABC Commission.

"She made clear that she wanted some fresh eyes here in this office," Williams said, noting the last major ABC law changes were in the 1970s. "We've not had a thorough discussion of the system in 30 years."

He wasn't slow on the draw. After news reports that New Hanover's ABC board refused to release their managers' salaries, Williams asked all boards to supply salary data for their top staff, and he then released it to the public. After the Mecklenburg dinner paid for by international distiller Diageo, Williams asked the state Alcohol Law Enforcement Division to investigate. Both steps sent clear signals to other boards about accountability to the public.

"It's clear to everybody, including the boards, that Chairman Williams is going to enforce the rules, whatever the rules may be," Wall said. "The boards want clarity on what the rules are."



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Sources: McClatchy Newspapers, Newsobserver, Charlotte Observer, WCNC, Google Maps