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March 18, 2014 | By | Posted in General News

Gifts galore in PLCB ethics scandal, but some say punishment lacking

By Andrew Staub | PA Independent

Violating the state’s ethics law will leave three former high-ranking officials with the Pennsylvania Liquor Control Board with diminished bank accounts.

Some say that’s not enough to deter future bad behavior.

Good-government advocates took issue with the State Ethics Commission’s agreement not to refer the violations to outside legal agencies, instead agreeing to allow the officials to pay restitution to the state and file proper disclosures after accepting gifts from wine and spirit companies doing business with the PLCB.

Eric Epstein, director of the government reform group Rock The Capital, said he believes the U.S. Attorney’s Office should have the case.

“The punishment is worse than a slap on the wrist. It’s a pat on the back that will serve to encourage corruption and cronyism,” Epstein said.

The best way to combat white-collar crime is to “have these suits serve blue-collar time,” he said.

CONTI: The former PLCB CEO accepted free golf outings and other gifts. Now he and two other former officials have to pay up.

CONTI: The former PLCB CEO accepted free golf outings and other gifts. Now he and two other former officials have to pay up.

Former PLCB CEO Joe Conti agreed to pay $2,388.51 in restitution to the state; former board Chairman P.J. Stapleton III, $7,258.54; and former marketing and merchandising director James H. Short Jr., $13,586.92, according to the commission.

Three separate reports describe a culture in which Conti and the two other officials routinely accepted gifts from vendors and failed to disclose the perks, as state law requires.

Barry Kauffman, executive director of Common Cause Pennsylvania, a good-government group, lamented the punishments. Simply paying restitution isn’t enough and could encourage others to break the law, Kauffman said.

“Ethics laws need to have some teeth to them,” he said. “There has to be disincentive for bad behavior.”

The commission disclosed its findings a little under two years after the Philadelphia Inquirer reported Conti and others were under scrutiny for accepting gifts and favors.

Vendor gifts included several golf outings, including a pro-am by Tiger Woods, and trips to Florida and California. Other gifts included expensive dinners, alcohol and tickets to sporting events.

PLCB Chairman Joseph Brion said in a statement he board takes the reports “very seriously.”

“We are currently reviewing the documents closely and will look to see if there are any steps we can take as a Board to make sure this situation does not occur again,” Brion said. “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.”

Ethics Commission Chairman John Bolger could not be reached for comment.

Conti, Stapleton and Short did not return messages seeking comment. All three have 30 days to pay restitution and file proper statements of financial interest. They cannot ask for reimbursement from the PLCB.

Conti played at the prestigious Aronimink Golf Club near Philadelphia after Capital Wine & Spirits invited him to join the 2010 Pro-Am Tournament, held as part of the AT&T National Golf Tournament.

The deal included a photo book, shirts and food and beverages, among other perks. All told, the gifts were worth $1,000, with the ticket provided by liquor giant Bacardi. Capital served as a Bacardi broker, and at the time had an ongoing business relationship with the PLCB.

Some gifts, though lavish, did not need meet the threshold for reporting. In one case, a PLCB broker gave Conti a bottle of Johnnie Walker Blue whiskey — valued at $229.99 and engraved with a message to the “Super CEO.”

It’s another black mark for Conti, who, as a former state lawmaker, voted for a pension increase in 2001 and then the midnight pay raise in 2005.

After taking over as PLCB CEO in 2006, he presided over the disastrous rollout of wine vending machines, an expensive decision to send employees to “charm school” and an ad campaign urging children to buy their mom’s vodka for Mother’s Day.

Conti retired from his more than $150,000-a-year-CEO gig in 2013, but he collected another $67,000 over six months working as a part-time PLCB consultant — all while collecting a state pension.

“If you talk about impaired judgment, look at the career of Joe Conti,” Epstein said.

Each year Stapleton’s nonprofit, Keystone Weekend, hosts a resort getaway billed as a networking opportunity for leaders from across the state.

The event featured celebrity chefs, horseback riding and speakers that included members of Congress, industry leaders and filmmaker M. Night Shyamalan.

By virtue of Stapleton’s role with the PLCB, the Keystone Weekend also featured booze courtesy of PLCB vendors. Though the exact amounts of the donations couldn’t be determined, the commission estimated the alcohol was worth more than $3,000 in 2011 and 2012 combined.

Besides that benefit, Stapleton played in the pro-am golf events in 2010 and 2011, racking up $2,400 in perks. He also played in four other golf outings paid for by vendors and received gifts, including a picture frame.

A lawyer, Stapleton resigned from the PLCB in October 2012, after the Inquirer reported he was among those under scrutiny. He was first appointed to the board in 1997 and served as chairman from 2007 through most of 2011.

Short began working for the PLCB in 1984 as a part-time seasonal clerk, eventually became store manager and later director of marketing and merchandising in 2003.

That meant serving as the chief adviser to the CEO when it came to the purchase and marketing of alcohol across more than 600 stores. Short resigned just two weeks before the commission released its report.

Like Conti and Stapleton, Short joined in several golf outings, including an August 2010 trip to Pebble Beach in California worth about $2,000. W.J. Deutsch, a wine and spirit marketer, footed the bill. In another instance, Short accepted a round of golf from Southern Wine and Spirits while on state time.

In addition to the hitting the links, other gifts included meals, a golf flag autographed by golfing legend Arnold Palmer and an iPad. One vendor, Capital Wine & Spirits, even arranged for Short to receive six bottles of wine and a bottle of bourbon while vacationing in Hilton Head Island in June 2011.

“You are the best!” Short wrote in an email to the vendor’s director of marketing and business analytics after she arranged for the gift.

Without the virtue of his job with the PLCB, Short would not have been in a position to receive the gifts, the commission found.

While the gifts were expensive, Kauffman said vendors received something more valuable in return: Face time with key PLCB officials.

The favors show the need to reform state’s lobbying laws, Kauffman said, by either prohibiting public officials from accepting gifts at all or by requiring reporting from the first penny received. State law requires all gifts valued at more than $250 to be reported in annual statements of financial interest.

“There’s really nothing a lobbyist or contractor can’t do or say that they can’t simply do in a meeting at the public official’s office or by presenting documents,” Kauffman said. “When you start getting into the business of giving gifts, it’s done for one reason only.”

That’s to gain a preferential relationship, Kauffman said.

Epstein said the light punishment from the Ethics Commission sends a message that some officials are above the law.

“It just makes me wonder if we have changed anything in the political culture since the pay raise (scandal of 2005). That’s what’s so frustrating,” Epstein said. “I mean, you have to have been on another planet not to recognize that the public’s outraged with political cronyism.”

Andrew Staub is a reporter for PA Independent and can be reached at Andrew@PAIndependent.com. Follow @PAIndependent on Twitter for more.

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