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Liquor lobbyists spent over $900,000 towards privatizing alcohol sales in Pennsylvania

July 8, 2013

So close and yet so far.

Last week, Gov. Tom Corbett’s dream of privatizing liquor sales in Pennsylvania went down in flames, as state senators couldn’t agree on a plan to get the commonwealth out of the booze business.

It was the fourth time privatization has come up in the Legislature, said G. Terry Madonna, director of Franklin & Marshall College’s Center for Public Affairs. But, he noted, when the House voted to privatize state stores in March, it marked the first time either chamber had passed a privatization proposal.

“This came a lot closer than it’s been in the past,” Madonna said.

The final push — and the goal-line stand — were both funded by prodigious amounts of money poured into the political process by those with a stake in the outcome.

According to records from the Pennsylvania Department of State’s Lobbying Disclosure database, $925,898 has been spent on alcoholic beverages lobbying so far in 2013. Corporations, unions, wineries, beer distributors and trade groups sought to make their voices heard above the din of what one newspaper called one of “the largest public flocks of lobbyists” in recent memory.

Stakeholders also poured thousands of dollars into the campaign coffers of influential legislators who helped to craft, or cripple, the legislative proposals.

Legislators insist the money can’t buy their votes.

“The notion that my vote is for sale is bull, frankly,” said state Rep. Mike Sturla, D-Lancaster, who got campaign contributions from several political action committees that opposed privatization.

But Barry Kauffman, executive director of Common Cause Pennsylvania, a good-government group, said if the Legislature takes up privatization when it returns in the fall, the gravy train can keep right on rolling.

“There are some fairly wealthy campaign contributors who, if you drag debate out to the fall or spring, will have more opportunities to give campaign contributions,” Kauffman said.

The big pockets dug deep in the first few months of the year.

Wegmans, the food market chain headquartered near Rochester, N.Y., with six outlets in Pennsylvania, spent $67,225 in the first three months of 2013, according to Pennsylvania Department of State records (information on spending from April-June was unavailable).

Wegmans sells beer at eat-in cafes at all its Pennsylvania locations. In May, Craig Hoffman, senior vice president for Wegmans Pennsylvania division, told a state Senate hearing that the chain wants to be able to sell wine and spirits in its stores.

In a statement last week, Wegmans spokeswoman Jo Natale said the firm supported privatization “because it would have provided consumers with greater convenience and more choice. We certainly hope it will be resurrected in the future.”

Sheetz, the Altoona-based convenience store chain, the United Food and Commercial Workers Local 1776, the union representing approximately 3,000 state store workers, and Pittsburgh-area food market chain Giant Eagle all spent more than $50,000 on lobbying between January and March, state records show.

Big beer also was part of the process; Anheuser-Busch spent $37,008 on lobbying, while MillerCoors LLC spent $21,961. In March, both firms objected to the House privatization bill, saying that by permitting hundreds of additional wine and spirits license, the legislation would harm beer distributors and tilt the playing field in favor of the wine industry.

Diageo — a multinational firm that owns Smirnoff, Johnny Walker, Captain Morgan, Gordon’s gin and other liquor brands, as well as Guinness beer and several wineries — spent $25,635 on lobbying, records show. Wal-Mart and Target spent $30,695 and $10,863, respectively. Officials with both organizations said the chains would sell liquor if privatization became law.

Trade groups were heavily represented among the organizations that spent the most. These included the Wine and Spirts Association of Pennsylvania, the Pennsylvania Licensed Beverage Association, representing the tavern industry, the Pennsylvania Restaurant & Lodging Association and the Malt Beverages Distributors Association of Pennsylvania.

Jay Weiderhold is president of the Pennsylvania Beer Alliance, which represents beer wholesalers. The group spent comparatively little on lobbying ($5,341), but has dispersed more than $44,000 in campaign contributions so far this year, according to state records.

“PBA represents local businesses that employ local people throughout the Commonwealth. … [and] should be no surprise that these businesses are interested in being a part of the political process,” Weiderhold said in a statement. “Contributions are part of being politically engaged. In the political realm you win some fights and you lose some fights, but being actively involved is part of the process.”

One of the biggest campaign contributors has been the 1776 PAC, the political action committee representing UFCW Local 1776, the union representing most Pennsylvania Liquor Control Board employees.

The PAC contributed $67,086.69 through June 10, according to state records, most of it to privatization foes like Senate Democratic Leader Jay Costa Jr., D-Allegheny County, who led opposition in the Senate to the Republican-backed plan. Costa’s campaign got $5,500 from the union PAC, state records show.

Last week, Mediatrackers, an online news site, reported that state Sen. Jay McIlhenny, R-Bucks, received at least $43,000 from privatization opponents in April. That same month, McIlhenney unveiled a plan to privatize liquor sales gradually, with the PLCB permitted to decide when to close unprofitable state stores, and beer distributors, taverns and restaurants and some supermarkets allowed to expand the type and quantity of alcohol they sell. The state would have retained ownership of the wholesale liquor distribution system.

The bill was widely seen as a retreat, with the Allentown Morning Call newspaper predicting, accurately, that it “could spell political doom for Corbett’s liquor privatization plans.”

A call to McIlhenny’s Harrisburg office last week was not immediately returned.

Senate Majority Leader Dominic Pileggi, R-Delaware County, got at least $6,500 in campaign contributions from those with a stake in the privatization outcome, including DisPAC, the Malt Beverage Distributors Association’s political action committee, the Pennsylvania Beer Alliance, Tavern PAC and Wine & Spirits Brokers. Pileggi had been consistently skeptical of privatization plans, though he did support McIlhenny’s bill, provided changes were included to provide beer distributors and restaurants and taverns more flexibility.

Locally, Sen. Mike Brubaker, R-Warwick Township, got two separate $500 contributions from political action committees representing liquor interests: Greenlee Partners, which represents the Distilled Spirits Council of the United States, Wal-Mart Stores and Brewers of Pennsylvania, among others, and Pugliese Associates, which represents the restaurant and hotel industry. He also got $500 from DisPAC, the political action committee of the Malt Beverage Distributors Association of Pennsylvania.

Those donations came before Brubaker announced he would not seek a third term in office.

Sturla’s campaign arm, Mike Sturla for State Representative, got $2,000 from the 1776PAC, $1,500 from the Pennsylvania Beer Alliance and $500 from the Tavern PAC.

Sturla’s opposition to privatization, he said, “had nothing to do with who gave money to me. I make decisions based on the best interests of my constituents.”

Sturla also suggested there was more money poured into the political process by those who favored privatization than could be definitively traced. Ideological backers of privatization, he said, are often represented by big firms that lobby on behalf of dozens of clients representing a plethora of different industries. Definitively tying the dollars spent to the privatization issue would be nearly impossible.

And some political action committees contribute on behalf of a number of causes. For example, the Pennsylvania Chamber of Business and Industry backed privatization, but its Chamber PAC supports many candidates for many different reasons.

Kauffman, of Common Cause, agreed.

“You’re probably only seeing the tip of the iceberg,” he said. “It’s almost impossible to get a good grasp of what’s really going on.”

Source: Lancaster online–900-000-towards-privatizing-alcohol-sales-in-Pa-.html#ixzz2YOxEfmHs