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Comptroller Peter V.R. Franchot called on Gov. Larry Hogan and the General Assembly to refrain from major changes to state taxes or regulations for at least the next three years. (File photo)

Comptroller finds liquor distributor acted properly

The state’s largest liquor distributor was not involved in a scheme to fix prices in an attempt to damage county-run liquor stores in Worcester County, according to investigators with the Office of the Comptroller.

The determination comes a month after Worcester County officials lodged a complaint against Reliable Churchill, claiming the distributor was involved in fixing prices and other unfair business practices designed to financially damage the county’s government-operated liquor business.

Jeffrey A. Kelly, director of field enforcement, wrote in a two-page letter to Worcester County Attorney John E. Bloxom that the comptroller’s office “conducted a thorough and complete investigation. However, contrary to your allegations, we did not discover any evidence that Reliable acted in an illegal or improper manager.”

The determination drew sharp criticism from Robert L. “Bobby” Cowger Jr., director of the county’s Department of Liquor Control, who said the decision was political on the part of Comptroller Peter V. R. Franchot.

“He wants us out of the business,” said Cowger, who said he disagreed with the results of the state investigators. “I could go on all day disputing the findings in that letter.”

Worcester County had a monopoly on the distribution of liquor in the county for nearly 80 years. The three licensed distributors, including Reliable Churchill, were required sell to the county, which in turn sold to local bars and restaurants.

A new state law that took effect in July upended all that. Now, the more than 200 licensees in that county can purchase directly from distributors while at the same time reserving the right to buy from the county warehouses.

In September, Cowger and other county officials filed a complaint with the state, claiming that county purchased 400 cases of Captain Morgan Spiced Rum from the distributor in April and received a price sheet stating the price of $12.79 would be the lowest until October.

Cowger said the county stocked up on the product because it is very popular in Ocean City.

But three months later, the county learned the distributor was selling the same product for nearly $3 cheaper — a cost difference to the county of nearly $9,000.

The county further alleged that  Reliable Churchill also violated state regulations by limiting the $9.99 offer locally to the county and to Seacrets, a popular restaurant in Ocean City. Cowger, in September, said he and another employee spent the day driving the Route 40 corridor from Delaware to the Baltimore Beltway checking to see if Reliable Churchill offered the $9.99 price to them.

Kelly, in his letter, said the claims of “blind deals” offered to a select number of businesses “is wholy inaccurate.”

“Our investigation has show that 253 retailers in Maryland took advantage of the discount offer, including (Worcester County),” Kelly wrote.

Kelly wrote that his investigators traveled the same route attempting to recreate Cowger’s report but found that several retailers had, in fact, received the same deals.

Cowger, in an interview, said the conclusions in the state investigation were marred by politics.

Franchot, who is running for re-election, has been a vocal opponent of government controlled liquor distribution systems such as those  in Montgomery and Worcester Counties. As a result, he has drawn campaign donations from businesses such as Reliable Churchill as well as Maryland-based Total Wine and Spirits.

“He wants us out of business,” Cowger said of Franchot. “It’s all politics and when you get hung up in politics, and I know how that game is played, some of it’s good and some of it’s bad.”

Andrew Friedson, a spokesman for Franchot, rejected Cowger’s assertions that politics was a factor.

“The comptroller’s office conducted a fair and thorough investigation at the county’s request that found the complaint against Reliable Churchill to be wholly without merit,” Friedson said. “It’s unfortunate, but not altogether surprising, that Mr. Cowgher has resorted to using rhetoric and lodging accusations that are unbefitting of a public official. “