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March 17, 2010

Wine almost at your doorstep

The contentious idea of lifting the ban on the direct shipment of wine to Maryland house nearly received a vote on the Senate floor this morning – by accident.

Sen. Jamie Raskin, a Montgomery County Democrat, was considering attaching one of two different amendments to an unrelated wine bill during this morning's session.

  • Amendment A: Lifted state ban on direct wine shipping to residences.
  • Amendment B: Directed Comptroller Peter Franchot to study how other state have implemented direct shipping.

Raskin consulted with his colleague Sen. Joan Carter Conway, who chairs the committee overseeing the wine debate, and pledged to offer the weaker Amendment B. Critical in his thinking were the pleas from the state’s wineries who worried his idea would kill the underlying bill which they’ve long wanted. (The underlying bill allows vineyards to sell their wine a farmers' markets, that bill was delayed for one day).

However, Raskin accidently handed out the stronger Amendment A, a mistake that caused Senate President Thomas V. Mike Miller to nickname the two-time Harvard graduate “Absent Minded Professor.”

Raskin swapped the amendments and later told us that he’s “been frustrated” with the lack of action on the direct shipping issue. He says the years of delay on the issue show an example of “the public interest being ignored because of the pleasure of a special interest.” (The Washington Post recently wrote about the power of Maryland liquor lobby; The Sun tackled the issue a few years ago - read it after the jump.)

Raskin predicts that next year will be the year for direct shipping – otherwise he says he’ll “bring a sleeping bag” and filibuster in the Senate.

Across the hall in the House Del. Dereck Davis, a Prince George’s County Democrat who chairs the Economic Matters Committee, said he plans to talk with his committee members today about Raskin’s amendment. He said he would not be surprised if it is offered in the House Thursday when that body is set to debate a similar underlying bill allowing wine sales at farmer’s markets.

Liquor lobby holds strong
Bloc with money, muscle scores many legislative feats

Bradley Olson and Gadi Dechter

Maryland's powerful liquor lobby is on track to achieve virtually all of its legislative priorities during this General Assembly session - despite opposition from the attorney general, the comptroller, public health advocates and hundreds of consumers.

    Legislators shot down Internet wine sales, which are legal in most of the country. They are poised to expand the definition of beer to include such items as Jack Daniel's Country Cocktail, allowing wider distribution and lower taxes for such drinks. When they crafted a bill to outlaw slot machine-like devices, they left out the kind that proliferates in Baltimore bars. And despite the state's budget problems, they are likely to leave the liquor tax rate right where it has been since 1955.Such decisions have a big impact on Marylanders, who can't join a wine-of-the-month club or, in most cases, pick up a six-pack at the grocery store because of industry lobbying to maintain a strict set of regulations. The result: limited competition and limited choice, consumer advocates say.

    "It's enormously frustrating," Del. William A. Bronrott, a Montgomery County Democrat who supports raising alcohol taxes, said of the industry's power. "We're talking pure greed versus the public interest."

    Legislators who have supported positions backed by the liquor lobby say they decide each issue on its merits. But critics say it is no coincidence that the industry is among the most openhanded political donors, contributing nearly $3 million in the past decade.

    "When you're dealing with this issue, particularly in Annapolis - which has created state-protected, regulated monopolies - you have a very long list of state legislators who will go to any length to protect that system," said Christopher Summers, president of the Maryland Public Policy Institute, a libertarian-oriented think tank. "Ultimately the end loser is the consumer because they're not given the benefits of a fair and free marketplace."

    Liquor industry officials disagree. They say Maryland's regulations are needed to ensure proper tax collection, to protect jobs and to prevent sales to minors. Allowing wine sales over the Internet, for example, might provide easier access for teens. And state regulation of flavored drinks such as the Jack Daniel's cocktail should follow established federal rules, they say.

    Still, it's clear that those positions are backed by plenty of money. Since 2002, alcohol interests have paid lobbyists about $2 million.

    And more than 80 percent of state legislators have received campaign contributions from the liquor lobby, records show. In the past decade, liquor license holders, wholesalers, distributors, manufacturers and their political action committees have contributed an average of nearly $350,000 annually to hundreds of candidates. Donations range from as little as $100 to the state maximum: $4,000 per candidate per election cycle, according to a Sun analysis of data on alcohol-related interest groups and more than 7,000 liquor license holders.

    To put that in context, watchdog groups decrying the energy industry's influence over Maryland's 1999 utility deregulation plan said this year that industry donations to state candidates and committees totaled $1 million since 1998.

    In the same period, alcohol interests gave about $2.8 million to preserve the current system of regulation.

    Many legislators say the money does not give the liquor lobby undue influence. Even Bronrott says donations might ease access to legislators but do not guarantee favorable votes.

    Del. Mary Ann Love, who chairs the House subcommittee that deals with alcohol regulation, said her positions are not influenced by the $15,000 in donations she has received from the industry over the past decade. "I take money from a lot of people," said Love, an Anne Arundel Democrat. "My positions aren't going to change."

   
Industry's might

    The industry's strength has been displayed on several seemingly disparate issues during the General Assembly session.

    Early this month, panel after panel of wine lovers pleaded with state senators to allow consumers to buy their favorite merlot and pinot noir online, as is allowed in 34 other states, including Pennsylvania, and in Washington, D.C.

    Although Gov. Martin O'Malley has collected more from the liquor lobby than any Maryland politician in office - more than $230,000, mainly from seven years as Baltimore mayor - he was inclined to support the wine bill, said spokesman Rick Abbruzzese.

    But just as the bill's sponsor, Sen. Jamie Raskin of Montgomery County, was exhorting a Senate committee to "free the grapes," a House panel voted down the measure, 17-3, effectively killing it.

    Ultimately, both chambers were persuaded by arguments made by Bruce C. Bereano, a lobbyist for the Licensed Beverage Distributors of Maryland - among the most generous donors to state politicians. He said the bill would reduce distribution-related jobs and hurt state wineries, even though the association that represents them endorsed the bill.

    A similar scene played out several times in recent weeks. For example, Attorney General Douglas F. Gansler asked lawmakers to reject a bill classifying Mike's Hard Lemonade and other sugary alcohol products as "beer."

    A number of lawmakers and county public health directors also opposed the measure, saying the products are marketed to teens and should not be afforded the wide distribution or lower taxes of beer. Supporters noted that most other states allowed this classification and that the products had roughly the same percentage of alcohol as beer.

    The bill passed in the Senate, 36-10, and is scheduled to be heard Tuesday by a House committee.

    Bronrott said he also expects that his proposal to raise alcohol taxes will fail.

    More than a dozen people - including students, recovering alcoholics and addiction experts - testified before a House committee considering the tax increases, which would have amounted to pennies per drink.

    Lawmakers seemed moved by the emotional testimony, but there appears to be little chance that the increases will pass. State taxes on alcohol haven't gone up since 1955 for liquor and 1972 for beer and wine. The rates are among the lowest in the nation.

    Bar owners also scored a big victory when a bill banning slot-like video gambling machines was amended to exempt thousands of machines reportedly used for illegal payouts in Baltimore City and Baltimore County taverns. Lawmakers who crafted the amendment say there was no need for the provision, because the alleged payouts are already illegal.

    "It's a pretty amazing accomplishment for special interests," Comptroller Peter Franchot said. "These video poker machines are magnets for corruption, for tax evasion and for vice, and you have an opportunity to get rid of them and the liquor industry and the gambling industry are blocking it."

   
Bigger recipients

    Lawmakers who lead the House and Senate, or sit on committees that handle liquor laws, tend to receive the most campaign money from the industry.

    For Love, contributions from alcohol interests made up 12 percent of the total she raised in the last election cycle.

    Two delegates who sit on her subcommittee - Anne Arundel County Republican James King and Baltimore County Democrat Joseph J. "Sonny" Minnick - own bars, although both men said that doesn't pose a conflict of interest.

    "We have a citizens' legislature," said King, who owns the Rockfish restaurant and bar in Eastport. "Doctors deal with health care issues, lawyers deal with the law and some people like myself who own small businesses handle those issues."

    Many who have supported bills favored by the liquor industry say they sought to protect Maryland's "three-tier" alcohol distribution system. Here, as in some other states, alcohol is regulated in much the same way it was when Prohibition was repealed in 1933.

    In general, alcohol manufacturers must sell their product to distributors, who then sell it to retailers such as bars, restaurants and liquor stores.

    House Speaker Michael E. Busch defends the three-tier system, saying it has stopped giant corporations from taking over local bars and breweries, and has helped generate competition.

    Busch - an Anne Arundel Democrat who has received about $23,000 in contributions from the industry since 1998, 1.4 percent of the total he has received during that period - says the liquor lobby does not hold undue influence in the legislature.

    Still, many lawmakers who have frequently sided with the alcohol lobby say the Byzantine regulations governing the industry should be re-examined.

    "I think anybody will tell you Article 2B is a mess," Del. Dereck E. Davis, who chairs a House committee that oversees alcohol regulations, said, referring to the more than 300 pages in Maryland law books that deal with alcohol.

    The Prince George's Democrat has said he would introduce a bill creating a task force to study the issue. This week, he backed off that proposal, saying an informal study might be sufficient.

 

Posted by Annie Linskey at 3:32 PM | | Comments (4)
Categories: General Assembly 2010
        

Comments

Good job reporting what is going on regarding efforts to legalize direct wine shipping and related issues. Too bad you didn't mention what happened at the Senate Hearing in the EHEA on Wed. Mar. 17th. Readers might be interested in the events.

Excellent reporting!

Excellent article. We receive several phone calls a day here at Wine of the Month Club from Maryland residents who are often dismayed to learn that we cannot ship to them. I look forward to learning about updates relating to this very sensitive matter.

Paul Kalemkiarian
President, Wine of the Month Club

Excellent reporting, though it doesn't seem to change anything as these issues continue to come to light. I'm astonished by the percentage of campaign contributions from the liquor lobby for Del. Mary Ann Love, who's just being disingenuous claiming that she's not influenced by 12 percent of her money coming from the industry she oversees. I'd love to see the breakdown of campaign contributions across these committees to see which interest groups are buying the most influence. And I'd really like to see a study correlating contributions to voting records. Keep up the good work, and don't let this story die.

--Rob Garretson
Gaithersburg, MD

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About the bloggers
Annie Linskey covers state politics and government for The Baltimore Sun. Previously, as a City Hall reporter, she wrote about the corruption trial of Mayor Sheila Dixon and kept a close eye on city spending. Originally from Connecticut, Annie has also lived in Phnom Penh, Cambodia, where she reported on war crimes tribunals and landmines. She lives in Canton.

John Fritze has covered politics and government at the local, state and federal levels for more than a decade and is now The Baltimore Sun’s Washington correspondent. He previously wrote about Congress for USA TODAY, where he led coverage of the health care overhaul debate and the 2010 election. A native of Albany, N.Y., he currently lives in Montgomery County.

Julie Scharper covers City Hall and Baltimore politics. A native of Baltimore County, she graduated from The Johns Hopkins University in 2001 and spent two years teaching in Honduras before joining The Baltimore Sun. She has followed the Amish community of Nickel Mines, Pa., in the year after a schoolhouse massacre, reported on courts and crime in Anne Arundel County, and chronicled the unique personalities and places of Baltimore City and its surrounding counties.
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