Corruption Case Makes Clear: Prince George’s County Must Do Away With Competitive Liquor Licensing Process

I just finished reading the plea agreement regarding a liquor licensing attorney in Prince George’s County who pleaded guilty to bribery on Friday. The underlying facts were that this attorney made payments to a public official to secure his assistance in influencing liquor licensing decisions. The statement of facts contains verbatim quotes, demonstrating that either someone was cooperating or that phones were tapped. In any case, this statement from the lawyer jumped off the page at me:

            “Two Gs is nothing man … for what they got.”

What the lawyer was referring to was the $2000.00 payment made to the public official to help this business get a liquor license.

As noted by the statement of facts, “[l]iquor licenses in Prince George’s County are extremely valuable.” The statement notes that they can sell for “$5000.00 or more.” Try five or six times that and you have a more accurate statement.  This might explain why this attorney and his client were happy to pay $2000.00 to obtain a liquor license.

Which all brings up a fundamental issue as it relates to the liquor licensing process in Prince George’s County: namely, that licenses are awarded on a competitive basis. That is to say, the Board will announce that it is awarding a certain type of license (e.g. a beer, wine, and liquor license) on a certain date, and that it will accept applications for that license up to a certain deadline. Then, at the hearing, each applicant will present its best case to the Board and the Board will choose which applicant gets the license. How they make that decision is left almost entirely to the discretion of the Board.

There could be 3, 4, or 5 applicants – but only one goes home with the license.  Only one business gets not only the right to make much more money at its restaurant by selling alcohol, but also is awarded an asset valued at tens of thousands of dollars. Is it any wonder that a business (or unscrupulous advocate) might be tempted to try to find a way to influence the decision of the Board – either directly or indirectly?  And here its worth noting that other businesses (via this same attorney it appears) allegedly paid bribes directly to a member of the Board himself, who also has been indicted and is facing trial next year.

That is why the statement of this attorney was so jarring, but also so unsurprising, because it was undeniably true: “two Gs is nothing man … for what they got.”

It certainly will not fix everything, but it should be clear from this case (if it was not already self-evident) that the competitive liquor licensing process invites corruption. And even where there is no corruption or improper influence (which is the vast majority of cases), the possibility of the process being fixed in some way puts the County Liquor Board in the unenviable position of having its own motives — almost certainly unfairly — questioned.

And making matters worse, this suspicion of unfairness or corruption is invited for no compelling public policy reason. There is not a glut of restaurants in Prince George’s County such that they must be artificially limited. In fact, it is quite the opposite – business and governmental leaders are trying to attract development and investment, and the County’s affluent population is clamoring for more dining choices. One need look no further than the success of National Harbor (which is exempt from the competitive process) to see this is the truth. The competitive liquor licensing process that exists elsewhere throughout the County, and the expense and uncertainty it imposes, only drives would-be restaurant owners to other jurisdictions, most often Montgomery County, where there is no such limitation on liquor licenses and which enjoys a much more varied and vibrant restaurant scene.  So the policy is self-defeating on every level.

There is a new legislative session starting in a few months. Prince George’s County’s leaders and representatives should strongly consider doing away with the competitive liquor licensing system. Such a move would allow the Board do its important job without the specter of suspicion and unfairness that hangs over the current process, and would make Prince George’s County a much more welcoming place for restaurants to do business.