Comptroller Presents Findings in Worcester County Liquor Board Investigation

Evidence of Price Discrimination, Illegal Sales and Purchases, Trade Violations

Ocean City, MD (December 8, 2010) –Comptroller Peter Franchot today announced the results of his agency’s extensive investigation of the Worcester County Liquor Control Board (LCB). During the seven-month inquiry, law enforcement agents for the agency found significant evidence of price discrimination, below cost sales, illegal purchasing and illegally providing some retailers with items of value. Comptroller Franchot is the chief regulator of alcoholic products in the state of Maryland.

“These are very serious issues and cut right to the heart of Worcester County’s hard-earned reputation as a good place to invest and do business. Left unaddressed, I believe they would severely jeopardize the public’s confidence in their state and local governments,” said Comptroller Franchot.

The investigation stemmed from numerous complaints of improper actions by the LCB from the public. Additionally, Senator-Elect James Mathias called for a review of the LCB’s activities.

Enforcement agents from the Comptroller’s Office conducted more than 50-in person interviews with a wide range of stakeholders, including retail business owners, former and current LCB employees, members of the Liquor Control Board and any other individual who had information pertaining to the investigation. Additionally, agents examined invoices, receipts, newsletters, promotional materials and Websites to determine what products were sold for, when they were sold, who they were sold to and where they were purchased.

Investigators determined clear evidence of violations including selling the same product on the same day at different prices; selling products to some retailers below the cost allowable under the law; purchasing alcohol from a Washington-DC based retailer in direct violation of state law and providing select retailers with equipment at no cost. These charges are statutory and regulatory violations of Article 2B of state law and the Code of Maryland Regulations respectively.

In response to investigation’s findings, the comptroller is initiating a formal administrative hearing to be held within 30-45 days.

Contact: Christine Feldmann, 443-336-0212 (cell)