Beverage panel bill returns to House
NASHVILLE — A Senate-passed bill that would dilute Gov. Bill Haslam’s control over membership on the Alcoholic Beverage Commission moves to the House this week amid an evolving controversy over the panel’s competence and some internal ABC turmoil in the recent past.
The bill would expand the ABC board from three to five members. All three positions are now filled by gubernatorial appointment. Under the legislation, one new member would be appointed by House Speaker Beth Harwell; the other by Lt. Gov. Randy McNally.
The measure (SB556) is similar to a bill last year that was advancing without opposition in the Senate when it was killed in a House subcommittee. Senate Republican Caucus Chairman Bill Ketron of Murfreesboro, sponsor of the legislation both last year and this year, explained to colleagues during a committee hearing that “politics got involved over in the House” in 2016.
One new provision in this year’s version: The $6,000 annual salary paid to ABC commissioners would be eliminated and a commissioner missing more than two monthly meetings in a year would be removed from office. The bill passed the Senate 33-0 on Feb. 27 and is scheduled for a vote Wednesday in the House State Government Subcommittee, the panel that killed it last year. This year, the bill has a different sponsor — Rep. Bill Sanderson, R-Kenton, chairman of the subcommittee.
Death of the bill in the subcommittee in a March 2016 meeting coincided with the abrupt resignation of Keith Bell as ABC executive director without explanation. Ketron said in an interview that Bell, “comfortable with the way things were” with the sitting commissioners, had been working for defeat of the bill. Bell could not be reached for comment.
ABC Commissioner John Jones of Johnson City said in a telephone interview Bell’s resignation was tied to “internal issues in the ABC that left us [commissioners] thinking it was time to make a change.” Jones said he was basically neutral on the bill — then and now — as a matter left to legislative discretion. He indicated Bell’s resignation involved other considerations, though declining to elaborate.
Jones, former editor of the Johnson City Press-Chronicle (now known as the Johnson City Press), was appointed to the ABC in 1990 by then-Gov. Ned McWherter after the death of his father, Carl A. Jones, who had been an ABC commissioner since the agency was created in 1963.
Jones’ lengthy service on the panel has been critically cited by Senate Government Operations Committee Chairman Mike Bell, R-Riceville, (no relation to the former ABC director) and some other legislators. In a committee meeting last week, Bell said the ABC “has been a mess,” though he praised current Executive Director Clayton Byrd for “what you’re doing to clean things up.”
Rep. John Ragan, R-Oak Ridge, recently wrote a letter to Haslam at the urging of Bell and other members of the joint House-Senate Government Operations urging the governor to consider appointing new members of the ABC. Bell and Ragan have cited a comptroller’s audit of the ABC that declared some problems within the agency — lack of control over confiscated liquor, for example — which were first cited in a 2007 audit and remained unresolved in 2016.
Jones said the 2007 problems were “completely addressed and taken care of” shortly after the comptroller’s report at the time, but the changes “fell through the cracks” during executive director Bell’s tenure and similar problems developed again prior to the latter audit. He said the trouble with keeping track of seized liquor was related to computer problems and a lack of storage space — at times involving entire moonshine stills.
Jones defended the ABC’s overall performance in the past, noting there has been a huge increase in licensed retailers overseen by the commission — especially with legalization of selling wine in grocery stores — and little increase in staffing for the agency. The ABC’s operations are funded by licensing fees and fines collected for violation of liquor and wine laws, but Jones noted that much of the money has been diverted by the administration and legislature to other purposes.
“I will say that we have functioned well and successfully, in the days when my dad served and in the time I have served, with a three-member commission,” Jones said when discussing the pending legislation.
Under current law, ABC commissioner terms coincide with the governor’s tenure. Haslam reappointed Jones and named Bryan Kaegi, whose primary occupation is fundraising and who helped the governor in raising money for his political campaign, and Mary McDaniel of Memphis, to the other two positions. McDaniel resigned from the ABC in January, leaving the panel with just two commissioners.
The governor said last week he has “three or four finalists” under consideration as McDaniel’s replacement and is undecided on whether to go along with Ketron’s bill.
“There are certain boards that, I feel like, there is a need for consistency in the appointment process,” the governor said when asked about the bill after a Murfreesboro speech last week. “I’m not sure that’s one of them.”
Haslam said he planned to discuss the measure with Harwell and McNally.
The current payment to ABC members is predicated on commissioners attending 12 meetings per year at $500 per meeting, though they are paid the same whether they actually attend the meetings or not, said Ketron, who also contends Jones has missed more meetings than that in recent years.
“If $500 a meeting is the reason somebody wants to serve, they don’t need to be serving,” Ketron said.
Last week’s Government Operations Committee hearing was on Sen. Bell’s bill to continue the ABC’s existence, as required under the state’s “sunset law” requiring periodic renewal of state agencies by the General Assembly. The panel approved continuing the ABC’s existence until June 30, 2021, but included a provision requiring ABC officials to report to legislators by Dec. 31, on the success of efforts to eliminate problems cited in the comptroller’s audit.