POWER AND GREED: 3 Pennsylvania LCB executives violated ethics rules

03/18/2014

Golf outings, lavish dinners and bottles of pricey wines from alcohol vendors bought access to three powerful state Liquor Control executives who broke the rules by accepting the gifts, according to the state Ethics Commission.

A painstakingly detailed commission report released on Monday offers a glimpse of a culture in which the three Liquor Control Board officials were wined, dined and handed trips and gifts from brokers to encourage sales of their products in Pennsylvania's 600 state-owned liquor stores.

But accepting the gifts, then failing to disclose them, violated ethics rules and the state's Liquor Code. The three were ordered to repay more than $23,000 and correct financial disclosure forms offering an incomplete view of favors they received, the commission ruled. The officials all stepped down from their LCB posts in the past 18 months.

• Former marketing director James H. Short Jr., 48, of Susquehanna Township, Dauphin County, was ordered to pay $13,582.92.

• Former board chairman Patrick “P.J.” Stapleton III, 57, of Malvern, Chester County, was ordered to pay $7,258.54.

• Former chief executive Joe Conti, 59, of Doylestown, Bucks County, was ordered to pay $2,388.51.

Stapleton's attorney, Henry Hockeimer, said his client “is glad to have this matter resolved and to move on.” Conti declined to comment on Monday through attorney Matthew Haverstick. Short did not return a call seeking comment, and it was unclear whether he had an attorney.

Whether any criminal charges will be lodged against the three remains uncertain.

The ethics commission can recommend charges, but agreed during talks with the former officials' attorneys to remain silent about the matter, commission Executive Director Rob Caruso said.

All ethics findings are reviewed by Attorney General Kathleen Kane's office, but Kane said she could not immediately comment about how her office would handle the findings. The matter could be complicated because Kane's husband, Chris, heads Kaneisable, a Scranton-based firm with a $12.4 million warehouse and trucking contract with the Liquor Control Board .

The ethics report paints a picture of three officials regularly taking advantage of the largesse of free-spending liquor vendors looking for their piece of the agency's $2.1 billion in annual sales.

Investigators found one event — the annual Alliance Golf Open, played in different Pennsylvania cities each year — was made specifically to let vendors “have face time with PLCB officials” while playing golf with them. A 2012 outing was canceled when sponsors learned of the ethics probe, according to the report.

The three didn't use personal leave time to attend the Alliance events. Short even submitted requests seeking reimbursement for mileage, lodging and food — despite lunch and dinner being provided. Conti approved the requests totaling $515, the report said.

One vendor invited Stapleton and Conti to play in AT&T Pro-Am golf tournaments at Aronimink Golf Club in Newtown Square, Pa. Both men paid small amounts to enter the tournaments, but nowhere near the $1,200 per person actual cost, the report showed.

Although it was not necessary to meet with vendors on the golf course, “it helped,” Stapleton told investigators.

The report showed Short received all-expense paid golfing trips to Pebble Beach, Calif., and two to Naples, Fla.

One wine and spirits vendor showered Short with gifts, including wine and liquor, more than $1,700 in gift cards to high-end stores and a shirt and cuff links valued at $418 from Neiman Marcus, according to the findings.

Another vendor gave Short a $500 iPad 2 and paid for dinner, drinks and a limousine to take officials to Harrisburg-area restaurants, investigators found.

Ethics officials said Stapleton solicited more than $3,000 in wine and spirits donations from vendors over several years for Keystone Weekend, annual multi-day panel discussions on state issues, that he established with his then-wife Kelly Beaudin Stapleton.

Conti accepted a $230 engraved bottle of Johnnie Walker Blue from a vendor in 2009 and took tickets to a Philadelphia Union soccer game from an agency doing more than $4 million a year in business with the LCB, the report states.

Caruso said the commission's probe was not intended to determine any wrongdoing on the part of vendors.

No sooner than the report on Monday was issued, critics of the LCB, some proponents of a move to privatize liquor sales in the state, spoke out about the probe.

Steve Miskin, spokesman for House Majority Leader Mike Turzai, R-Bradford Woods, said the findings bolster Turzai's push to privatize.

“It's just the latest rung in a very long ladder of abuses in this agency,” Miskin said. “If we were not in the business of selling booze to begin with, we would not have these potential conflicts.”

“The only way to end corruption and conflicts of interest at the PLCB is get government completely out of the liquor business,” said Matthew Brouillette, president and CEO of the Commonwealth Foundation, a Harrisburg think tank.

LCB officials said they are working on policies to guard against breaches.

“As an agency, we work closely with many vendors to ensure that consumers have access to a wide variety of products. It's extremely important that the integrity of the process is not compromised,” board Chairman Joseph “Skip” Brion said.

Caruso said the probe began in June 2012 but “people weren't knocking down our doors to cooperate.”

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