Liquor and corruption
Our view: Indictments call into question Md.’s system of alcohol regulation
The recent arrest of two officials involved in an alleged pay-to-play scheme at the Prince George’s County liquor board is being treated by County Executive Rushern L. Baker III, who has worked hard to improve the county’s reputation for good government, as something bordering on a personal embarrassment. In a statement, he fretted that after the arrests, “the perception of corruption will be directed at the county government setting us back in our war against unethical and illegal behavior” and vowed that he will “leave no stone unturned to root out any and all county employees or appointees that are involved in any nefarious activity.” In truth, though, Mr. Baker has nothing to be embarrassed about. He has nothing to do with the appointments to or operation of the county liquor board — and that’s just the beginning of the problems with the way liquor sales are regulated in Prince George’s and throughout Maryland.
Last week, U.S. Attorney for Maryland Rod J. Rosenstein announced the indictments of liquor board commissioner Anuj Sud and board director David Dae Sok Son, along with two license holders, Young Jung Paig and Shin Ja Lee. Subsequently, a former County Council member and state delegate, William A. Campos, pleaded guilty to accepting bribes in the scheme, and documents filed in the case suggest another delegate faces imminent indictment over alleged bribery related to legislation regulating Sunday liquor sales.
Mr. Sud has resigned his post, but it’s something of a mystery how he got the position in the first place. He was technically appointed by Gov. Larry Hogan, but Mr. Hogan isn’t really responsible. By law, governors select Prince George’s liquor board appointees from names submitted by the county party central committees, and by tradition, they name the person favored by the county’s Senate delegation. Mr. Sud’s previous claim to fame was as the attorney for Access Funding, a company being sued by Attorney General Brian Frosh for alleged fraud in its efforts to buy out the structured settlements of lead paint victims for pennies on the dollar. (Among the company’s previous clients, according to a Washington Post investigation, was Freddie Gray, who sold a structured lead paint settlement to the company for about 19 percent of its value.) Mr. Sud is now accused of taking $1,000 cash bribes from a lobbyist in exchange for favorable action on behalf of the lobbyist’s clients.
Both Mr. Baker and Mr. Hogan have suggested the need for reforms in the way liquor license commissioners are appointed, and certainly that would help. The present system is opaque and lacks accountability. In the last few years, both Baltimore city and county put liquor board appointments in the hands of local officials for that reason, and the legislature should spread similar reforms throughout the state.
But the indictments reflect much broader flaws than just the composition and functioning of liquor boards. Rather, they call into question the entire regulatory scheme.
Federal agents describe an alleged scheme in which Mr. Son conspired with various individuals including a liquor industry lobbyist to facilitate bribes from Messrs. Paig and Lee to one elected official in a successful effort to get legislation passed in 2015 allowing some Prince George’s County licensees to sell alcohol for consumption off-premises on Sundays. The men then allegedly offered even larger bribes to another elected official to sponsor legislation limiting the number of such licenses that could be issued, to prevent the issuance of such licenses to two businesses within a one-mile radius and/or to prevent the holders of additional classes of liquor licenses from benefiting from Sunday sales. The men allegedly were willing to pay $4,000 to get legislation passed allowing Sunday licenses and $4,000 to make sure they received them, but $50,000 to shut others out.
We can remove patronage from the liquor boards, but the bigger problem is a regulatory scheme tilted toward entrenched players who reinforce their position through generous contributions to politicians — usually legal ones given to campaigns but at least occasionally of the cash-in-an-envelope variety. Maryland’s alcohol laws date to the post-Prohibition era and are ostensibly designed to protect public health. But as this scandal shows, they have been transformed into a tool to protect individual economic and political interests. The whole system needs to be changed.