From the Archives: Attorney General Cuccinelli calls Charlottesville ABC sting operation 'overkill'

Attorney General Cuccinelli calls Charlottesville ABC sting operation 'overkill'
July 3, 2013 4:17 PM MST

Virginia Attorney General Ken Cuccinelli characterized as “overkill” an ABC sting operation in Charlottesville that resulted in a University of Virginia coed spending a night in jail and being charged with three felonies.

Cuccinelli, who is also the 2013 Republican nominee for governor, made his remarks during a July 3 interview with afternoon radio host Coy Barefoot on WCHV-FM.

The April 11th incident has received national attention since the charges against Elizabeth Daly were dropped by Charlottesville Commonwealth's Attorney Dave Chapman on June 27. Change.org is currently circulating a petition demanding that the Department of Alcoholic Beverage Control apologize to Daly and her two companions and to discipline the officers involved.

Late in the evening of April 11, Daly and two friends purchased cookie dough, ice cream, and canned sparkling water at the Harris Teeter store in Barracks Road Shopping Center. A group of six ABC agents, mistaking the water for beer, approached them.

The women did not recognize the agents as law enforcement personnel, called 911 to report their fears, panicked, and drove away. Daly was subsequently charged with striking two of the agents with her car and evading arrest, charges that brought with them the threat of up to 15 years in prison.

Well-placed concern

“I think your concern for overkill is well-placed,” Cuccinelli told Barefoot. “Mind you, I have not spoken to the agency about this,” he explained, so his knowledge of the situation has been based upon press reports.

However, Cuccinelli added, “these folks have a job to do, but do you really need a half dozen of them? Let's say this was hard liquor” that Daly allegedly bought. “So what?”

Based on the descriptions he had seen, the Attorney General said, “it seems to me that frankly – even if she bought beer or something – she got more than enough punishment in jail.”

Cuccinelli said, putting himself in the shoes of the women that night, “if I see a bunch of men surrounding me, that's going to instill a lot of fear in me.”

'Extreme measures'

Noting that, as an undergraduate at UVA, he had helped start a sexual assault prevention group on campus, Cuccinelli explained that he is “glad it didn't turn out worse than it did. It would have turned out worse for the agents. If I'm defending myself and I'm in my car, and I'm a young woman worried about sexual assault, I'm going to use extreme measures to keep myself safe.”

Why, he asked, “do we have six ABC agents staking out one store? It doesn't seem particularly wise. You end up with confrontations like this that could turn out a lot worse.”

Asked by Barefoot if he would teach his daughters to behave with the same sort of caution that Daly and her companions displayed that night, Cuccinelli exclaimed: “Absoflippinlutely!”

“I would never suggest to my daughters that they just trust what they've been told,” by people who might or might not be law enforcement officers. Those women, he said, “did exactly the right thing” by calling 911 and attempting to drive to the nearest police station.

“The important thing for us on the law enforcement side is we need to learn from this,” Cuccinelli said. “We need to be more concerned about the perspective of the person on the street.”

He pointed out that “the average person buying alcohol, even if they're buying it illegally, does not have the idea of escalating [the act] violently to complete the crime.”

Cuccinelli expressed confidence that higher-level officials at the ABC had already “had some serious conversations with [the agents] about their tactics.”

Looking forward, the gubernatorial candidate concluded, “what the rest of us need to do is [to ensure] the likelihood of this ever happening again gets as close to zero as we can make it.”

Publisher's note: This article was originally published on Examiner.com on July 3, 2013. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: Delegate Steve Landes is 'keeping an open mind' on Governor McDonnell's ABC privatization plan

Delegate Steve Landes is 'keeping an open mind' on Governor McDonnell's ABC privatization plan
August 29, 2010 12:08 PM MST

Governor Bob McDonnell’s proposal to privatize Virginia’s state-owned liquor stores “has some possibilities,” said Delegate Steve Landes (R-25) after a town-hall meeting on government reform in Harrisonburg on August 26.

Landes, whose district includes parts of Albemarle, Augusta, and Rockingham counties, as well as the city of Waynesboro, added that “at this point” he is “keeping an open mind.” He wants to talk to his constituents to find out what they like and don’t like about the plan.

Delegate Landes spoke to the Charlottesville Libertarian Examiner on the campus of James Madison University as the crowd dispersed from the governor's town hall. State Senator Mark Obenshain and Delegate Dickie Bell were also interviewed that night.

‘Public safety concerns’
The governor, he said, had “addressed a lot of the public safety concerns” but as a member of the House Appropriations Committee, one of his main concerns is “how is the revenue going to work, where would that go, how are we going to offset what could be a reduction” in the money the state takes in from liquor sales. Landes also expressed concern about what would happen to the portion of ABC profits that goes to local governments.

Asked if he has a sense of what his colleagues in the legislature are thinking about ABC privatization, Landes replied:

“Most of the people I’ve talked to are just like I am, trying to get information, trying to find out what the proposals are, [and] what the governor may be proposing.”

Once the government releases “his formal proposal,” Landes said, “we’ll all be looking at that.”

‘Devil’s in the details’
As a member of the General Assembly for the last 16 years, Landes explained, he has “found that the devil’s always in the details, so you need to see the bill, you need to see what it says, and where the dollars are going to go, how the franchise sales would be, who would be eligible, whether you’re talking about small business people or just larger corporations, chain stores, and the like. All those details would have to be looked at before I could say whether I’m in favor or against it.”

Regarding the question of whether privatization of the ABC system is a “matter of principle,” Landes pointed to his support of the private sector and free enterprise over the years, adding that “there is a good argument from the standpoint of, ‘we don’t control beer and wine [so] why is the state in the business of’” selling distilled spirits?

Noting the current economic climate, Landes went on, “If the economy was really good, it would be an easier decision for me, because we’re not looking at what the revenue picture is, where the dollars are coming from, where they’re going to go.”

The issue would be easier for him to decide, he said, because as a member of the Appropriations Committee, “I think you have to look at making sure that the dollars are going to match up and that projections would be there to offset what the state might lose from the standpoint of sales and what we might obtain from the standpoint of tax revenue.”

Publisher's note: This article was originally published on Examiner.com on August 29, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: Delegate Dickie Bell is 'on the fence' with regard to ABC privatization

Delegate Dickie Bell is 'on the fence' with regard to ABC privatization
August 28, 2010 7:42 PM MST

When Virginia Governor Bob McDonnell hosted a town hall meeting on the topic of government reform in Harrisonburg last Thursday, several state legislators from the area were in the audience.

One was Delegate Dickie Bell (R-20), who represents a district that includes Highland County, parts of Augusta and Rockingham counties, and the city of Staunton. He spoke to the Charlottesville Libertarian Examiner about Governor McDonnell’s proposals to privatize ABC stores and the state government’s monopoly on liquor sales.

‘Not as committed’
“The governor is very committed to privatizing ABC stores,” Bell said. “At this point, I have to say, I’m not as committed.”

Bell explained, however, that he is “a big believer in private enterprise and in using our private enterprise structure when we can.

“In most cases,” he said, “it’s a better way to go than having government do some of the things that we can do commercially.”

With regard to ABC privatization, however, Bell said “there are some questions that I need to have answered before I can get on board and fully support it.” He noted that he had spoken to Governor McDonnell before the town hall meeting and “he understands my concerns, I think.”

Bell also pointed out that his “concerns are not unique. They’re the same concerns that a lot of people have at this point.”

‘Social impact’
He is primarily concerned “about the social impact” but also worries “that a lot of the smaller retailers in the [Shenandoah] Valley seem to think that this will squeeze them out and, instead of helping their business, will actually put a squeeze on them.

“If only the bigger, larger, the major retailers have this opportunity,” Bell suggested, “it’ll never trickle down to smaller guys.”

The motivation for this particular concern, he said, is because “I’m a strong advocate for small business. We have to level the playing field. If we’re going to privatize, we’ve got to make sure that every size business out there has the same opportunity.”

Bell said he is also concerned about the effects on Virginia’s “very clean system” of selling distilled spirits.

“There’s no way we can privatize and not increase sales and not increase alcohol consumptions,” he said.

‘Based on my feeling’
When asked, “Is that based on empirical data that you have?,” Bell paused briefly before replying:

“No, it’s based on my feeling” that competition and more stores and expanded distribution will result in “increased sales.”

Summarizing his thoughts on privatization, Bell said, “Mostly, I’m just concerned that we have a system now that’s not corrupt, it’s very clean, it’s very efficient, one of the most efficient things that the state of Virginia does. I’d hate for us to lose that.”

He concluded: “I would say that I’m on the fence right now,” and acknowledged that he needs to be convinced that privatization is the right thing to do.



Publisher's note: This article was originally published on Examiner.com on August 28, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: State Senator Mark Obenshain on Virginia liquor privatization: 'I was for it before it was cool'

State Senator Mark Obenshain on Virginia liquor privatization: 'I was for it before it was cool'
August 27, 2010 10:37 AM MST

A member of Governor Bob McDonnell’s Commission on Government Reform and Restructuring, state Senator Mark Obenshain of Harrisonburg says “I was for it before it was cool” when asked what he thinks about the governor’s proposals to privatize the Commonwealth’s monopoly on the sale of distilled spirits.

ABC privatization was a central topic of discussion when Governor McDonnell held a town hall meeting on the campus of James Madison University on August 26, and Senator Obenshain took a few minutes with the Charlottesville Libertarian Examiner to explain his support for the proposals.

“I’ve been pushing ABC privatization for several years,” said Obenshain, “and I was delighted last year when the Governor announced that he was going to include that as part of his transportation agenda. I’ve been working very closely with the administration, I’m fully on board as a member of the team, and I look forward to seeing it pushed through to fruition.”

‘Government’s essential mission’
Obenshain became involved in this issue, he said, because “I’ve always been a free-market guy. I believe in reform. I believe in prioritizing and figuring out what government’s essential mission is, and what it’s not.”

Speaking “frankly,” Obenshain added, “running a monopoly [and] running a statewide retail operation is something that state government really has no business being in. They’ve got to get out. We’re now 76 years post-Prohibition. Notwithstanding the fact that Virginia is a tradition-bound state -- which I love about Virginia -- it is about time for us to enter the post-Prohibition era.”

Asked what his colleagues in the state Senate are thinking about ABC privatization, Obenshain replied:

“I think a lot of them are keeping their powder dry,” because they have two major concerns.

“Number one, can it be done in an economically responsible way, and number two, can it be done in a socially responsible way?”

‘Crafting his proposal’
Obenshain explained that “the governor is crafting his proposal in a way that both of those questions can be answered in the affirmative. We can do it without losing the revenue stream that’s generated through our public ABC store operation and we can do it in a way that doesn’t endanger the public health [or] public safety.”

Addressing the worries of many who question the ABC privatization idea, Obenshain offered these assurances:

“It doesn’t put a liquor store on every corner. It preserves the right of localities and local governments and community organizations to express their support or opposition to proposed locations for licensees.”

He added that privatization “can be done in a way that satisfies the concerns of those who are on the fence.”

Obenshain conceded that there will be “people who are going to stake out a position in opposition to it,” including some “motivated by social reasons.”

‘Good idea for Virginia’
Identifying another set of opponents, the Harrisonburg senator suggested that some “are going to be opposed to it because it represents an infusion of capital into the transportation system. Their vision for solving the transportation problem is to raise taxes. As a consequence, anything that gets in the way of their effort to raise taxes is going to be something that they’re going to oppose.”

Obenshain summed up his views on ABC privatization by saying the governor’s proposals will “make good sense for Virginians.

“I would not support it if it was going to result in increased incidence of alcohol abuse,” he said, “or liquor stores on every corner or [become] a drain on the resources of the Commonwealth. I believe it can be done without any of that and I believe it’s a good idea for Virginia.”


Publisher's note: This article was originally published on Examiner.com on August 27, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives - Privatizing ABC: Virginia Institute's John Taylor wants 'a small government I can easily monitor'

Privatizing ABC: Virginia Institute's John Taylor wants 'a small government I can easily monitor'
August 26, 2010 12:26 PM MST

Tonight in Harrisonburg, Governor Bob McDonnell will be holding the sixth in his series of eight town hall meetings on the topic of reforming Virginia’s government. As always, the centerpiece of the governor’s presentation will be his proposals to privatize the state’s monopoly on the wholesale and retail sale of distilled spirits, which dates to 1934 and the end of alcohol Prohibition.

Earlier this month, the Virginia Institute for Public Policy, a state-level think tank based in Gainesville, published a study called Impaired Judgment: The Failure of Control States to Reduce Alcohol-Related Problems, written by George Mason University economist Donald Boudreaux and Julia Williams, a consultant with the Regulatory Economics Group, LLC.

‘No statistically significant difference’
A few days after the study was released, the Charlottesville Libertarian Examiner caught up with Institute president John Taylor in Richmond, who summarized its findings.

“We looked at the public health and safety aspects of privatizing the state-owned liquor stores,” Taylor explained, comparing “the control stores that have monopolies over the sale of distilled spirits vs. the license states where the state government will sell licenses to private vendors to sell distilled spirits.”

These findings closely match those found by Duquesne University economist Antony Davies in research he did for a Pennsylvania think tank.

The three areas examined in the study, he said, “were alcohol-related deaths, binge drinking, and drunk-driving fatalities. In those three areas, what we found was there’s no statistically significant difference between the control states and the license states. There just isn’t.”

If one argues that “we have to control distilled spirit sales and give the government a monopoly,” Taylor said, “then public health and public safety [are] not really the excuse,” repeating for emphasis: “In those three areas, there is really not a need or an excuse for the government to be involved.”

With regard to the revenue that could be gained (or lost) through privatization, Taylor said that he understands the governor has claimed privatization will result in a windfall of $500 million that will be applied to transportation program.

‘Moral hazard’
However, he added, “To me, the revenue argument is not a good argument to begin with, because I don’t believe selling liquor is a core function of government. If you can say, ‘well, yeah, but the state makes a lot of money off of it,’ [then] the state might make a lot of money off a lot of things that should be private industries.”

Turning sardonic, Taylor added with a smile:

“I mean, if we allow them to have a monopoly to sell liquor, before you know it, they’ll take over car companies, insurance companies, banks – oh, sorry, they already do that.”

Having government involved in one consumer business, like liquor, Taylor argued, is the start of “a slippery slope and it’s a moral hazard. I just don’t want our government involved in this. I want a small government that I can easily monitor to make sure I know what they’re doing so that I can bash them when they overstep their bounds.”

Asked what he has heard from members of the General Assembly, who will have to vote to approve any privatization program, Taylor noted that “there are some that have expressed views that they don’t want to give up the ABC stores simply because they think it would be a loss of revenue.”

‘Not a core function’
At the same time, however, he pointed out that “the more conservative members of the General Assembly would agree that this is really not a core function of government and the government should get out of it.”

Following tonight’s town hall in Harrisonburg, Governor McDonnell will meet with voters and taxpayers in Danville on August 30 and in Bristol on August 31. Press reports indicate that he will officially release his ABC privatization proposals on September 8, for the consideration of the Government Reform Commission.

Publisher's note: This article was originally published on Examiner.com on August 26, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: Fifth District congressional candidate Jeffrey Clark endorses idea of liquor sale privatization

Fifth District congressional candidate Jeffrey Clark endorses idea of liquor sale privatization
August 13, 2010 7:07 PM MST

Just prior to his debate with incumbent Representative Tom Perriello (D-Ivy) at Charlottesville’s Senior Center on August 11, independent congressional candidate Jeffrey Clark gave his opinion on a current statewide issue.

When asked by the Charlottesville Libertarian Examiner what he thinks of Governor Bob McDonnell’s proposals to privatize the state’s monopoly on wholesale and retail sales of distilled spirits, Clark readily replied, “I like it.” It is, he said, “a win for everybody.”

‘A great model’
Pointing out that in “many places” elsewhere in the United States, liquor is sold through private outlets, Clark asked, “If it’s working effectively in other areas of the country and it’s a great model, why not move in that direction here as well?”

Clark explained that he doesn’t see “any reason that would prevent us from” privatizing ABC sales.

“We can get away from the bureaucracy,” he added, noting that “small businesses like restaurants and things like that would welcome the idea of the privatization of the ABC stores.”

Drawing on his own business experience, Clark remarked: “Trust me, I’ve been in restaurant-hotel management for a very long time, and I understand the red tape that can go along with that.

End the red tape
“Listen,” he continued, “just trying to get an opportunity to be able to have the privilege of selling alcohol in your business can be a huge issue of red tape and then you’ve got to go deal with this government bureaucracy that is the ABC stores of Virginia.”

McDonnell’s idea is “a way overdue proposal,” Clark said, wondering “why so long here?” when 32 other states have had private systems for decades.

Like the governor, Clark suggested that ABC privatization is part of a broad-based approach to government reform.

“We really need to look at every program, no matter what it is, even if it seems small, even if it seems like” people are dismissing the idea by saying things like “Oh, the ABC stores, it’s just alcohol, no big deal, we’ll leave it” the way it is, Clark argued.

‘Save a dollar, save a billion’
“Any area where we can look, where we can focus on the small things” the state should consider a change. “If it’s saving [just] a dollar, who cares? If we look to save a dollar, we can eventually save a million, two million, a billion.”

By looking for savings and efficiencies, Clark asserted, “we can start to bring these things back into some type of financial control and better serve the people.”

Clark, who lives in Danville in Southside Virginia, where it is believed much of the opposition to McDonnell’s proposals originates, does not see a downside.

“I don’t think anybody believes that somehow the ABC stores won’t be able to serve the public as well if they’re somehow not under government control,” he said.

“As a matter of fact, I think that most independent businesspeople probably act more responsible in their day to day lives than do government bureaucracies.”

Add Jeffrey Clark’s name to the list of supporters of Bob McDonnell’s ABC privatization efforts.

Publisher's note: This article was originally published on Examiner.com on August 13, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: State Senator Ralph Smith 'keeping his powder dry' on ABC privatization proposals

State Senator Ralph Smith 'keeping his powder dry' on ABC privatization proposals
August 9, 2010 2:25 AM MST

Governor Bob McDonnell’s first town hall meeting on government reform was held in the chambers of the Roanoke County Board of Supervisors, in the backyard of state Senator Ralph Smith (R-22), a former mayor of Roanoke whose district encompasses all of Botetourt County, parts of Montgomery and Roanoke counties, and the cities of Radford and Salem. (The city of Roanoke is represented in the state senate by Democrat John Edwards.)

Smith introduced McDonnell at the start of the meeting. After the event ended, he spent a few minutes answering questions from the Charlottesville Libertarian Examiner.

Smith’s assessment of the town hall was positive.

Learning from the public
“I think we all learned by it,” he said. “I feel sure the Governor’s learned new angles by this. I certainly did.”

The senator was particularly impressed by the way Governor McDonnell handled difficult – if not hostile – questions from the audience.

On occasions like this, he said, “no one’s going to like everything you do.” McDonnell “did an excellent job of dealing with those issues which are pretty much in opposition from the direction he wants to go.” For that, Smith concluded, “he gets good credit.”

With regard to the specific question of McDonnell’s proposals for privatization of the sales and distribution of distilled spirits, Smith put on a positive face but was nonetheless noncommittal.

Wait and see on ABC
“I’m like probably a majority of the members of the General Assembly,” he explained, who want to “see more detail and expect to learn a little bit more in the next couple of days.”

Smith said of himself that “I’m a private-enterprise guy, so that kicks in, but I also realize that this is not a product like shoes and razor blades and everything else, when you’re dealing with alcohol,” suggesting that alcohol sales should be treated differently under the law than other consumer products.

Asked if he has a sense of what the General Assembly is thinking, Smith replied:

“Most everyone’s keeping their powder dry,” but he added that the opposition party – the Democrats, who have a majority in the state Senate – are unlikely to be supportive.

Still, Smith does not think support or opposition to these proposals will be driven entirely by partisanship.

“It’ll be back and forth,” he said, although “I think the partisanship will handicap it, somewhat.”

Rural-suburban split
What’s more likely is a rural-suburban split among legislators, depending on the constituencies they represent.

“You’re going to see some of that, clearly, yes,” he noted, pointing out that “Southwest Virginia is going to be the most conservative part of it.”

On the other hand, he said, “there are pockets around the Commonwealth,” which he identified as “the heavily populated areas, without naming the specifics,” where the transition will be welcomed by those who have seen free-market sales in other parts of the country.

At the same time, he expressed some concern that those other states serve as examples of where they “have one [liquor store] essentially on every corner.” In his own visits to other states he has seen “gaudiness” and thinks those stores are “pretty tacky visually.”

Still, he added, “I can’t imagine that it doesn’t encourage more alcohol consumption,” an assertion contradicted by studies such as one released last week by the Virginia Institute of Public Policy, and by some of the research done by economist Antony Davies, who was interviewed by the Charlottesville Libertarian Examiner last Thursday.

Publisher's note: This article was originally published on Examiner.com on August 9, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: Interview with Virginia Governor Bob McDonnell on ABC privatization - Part 2

Examiner.com exclusive: Interview with Virginia Governor Bob McDonnell on ABC privatization - Part 2
August 8, 2010 2:45 AM MST

Just before the first of eight town hall meetings he is hosting around the state, Virginia Governor Bob McDonnell sat down in Roanoke with the Charlottesville Libertarian Examiner for an exclusive interview.

As a Republican candidate for governor in 2009, McDonnell had promised to privatize the state’s system of alcoholic beverage control (ABC), which includes government ownership of liquor wholesale and retail operations. The system dates to 1934, after the passage of the 21st Amendment to the U.S. Constitution, which ended alcohol Prohibition.

Unlike distilled spirits, beer and wine are sold privately, through both wholesalers and retailers, in Virginia.

Answering Opponents
In continuing the conversation about ABC reform, McDonnell was asked about opponents of privatization, which may include beer wholesalers and others who fear competition in a free-market environment.

“Once the proposal is announced,” he said, adding “on exactly what the right mechanics are, it will then go to my government reform commission.”

After getting input from the commission and from citizens, the administration “will address some of the concerns that people have,” such as fears that money will be taken from the state’s general fund and that there might be an increase in crime in the absence of direct government control of liquor sales.

Privatization, McDonnell said, “maximizes the competition to reduce price, increase quality, [and] increase convenience. I think everybody will have a fair shake at getting a distribution license. We’ll still have strong enforcement of the rules; it will just be done by a private vendor, not by a government monopoly.”

Addressing the concerns of beer wholesalers and others who fear competition, he said, “at the end of the day, if people think that somehow this privatization might not be good for their business, then maybe they’ll still be opposed to it. But we’re going to knock down most of the opposition”

Creating and Retaining Jobs
McDonnell believes strongly that privatizing the ABC system will create jobs, but he also believes a new system will accommodate current ABC workers.

“We have 2,500 employees right now that work in the state system for ABC. We think they’re good employees,” he asserted. New, private-sector vendors “will have every incentive to try to hire the government workers.”

Rick Sincere interviews Bob McDonnell

McDonnell said, “it’s obvious” why the new owners will want to retain most of the current workers. “They’re trained, they know the system.”

Beyond job creation, however, the emphasis on McDonnell’s mind is what he calls privatization’s “biggest benefit”: an immediate windfall of “$500 million or more for transportation.”

Over the past several years, he said, “there’s been a lot of discussion about transportation and many proposals have failed.”

Unlike those, this proposal, McDonnell said, “is one that uses the free market, gets the government out of business, [creates] smaller government [and] more competition, and generates a half a billion for transportation.

“To me,” he concluded, “that’s a win-win and I think it’s one of the biggest reasons we’ll have public support for this idea.”

Part 1 of Governor McDonnell’s interview with the Charlottesville Libertarian Examiner is available on Examiner.com. See the attached video for a complete recording of the conversation.

Publisher's note: This article was originally published on Examiner.com on August 8, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: Interview with Virginia Governor Bob McDonnell on ABC privatization - Part 1

Examiner.com exclusive: Interview with Virginia Governor Bob McDonnell on ABC privatization - Part 1
August 8, 2010 2:34 AM MST

Virginia Governor Bob McDonnell proposed during his 2009 election campaign that the Commonwealth should end the government’s monopoly on the wholesale and retail sales of distilled spirits, with the intention of raising millions of dollars that would be applied to transportation needs.

While this proposal was not acted upon during the 2010 session of the General Assembly, this summer the governor began floating ideas about how privatization of the ABC system could be implemented. McDonnell sees privatizing liquor sales as part of a broad-based government reform program.

Town Hall Meetings
McDonnell hosted the first of eight town hall meetings on government reform in Roanoke on August 4. Prior to the meeting, McDonnell sat down with the Charlottesville Libertarian Examiner for a one-on-one, exclusive interview on the topic of ABC privatization.

Bob McDonnell

The first question posed to McDonnell referred to the fact that other so-called “control” states – states where liquor, and sometimes beer and wine as well, is sold through state-owned stores and wholesale operations – are considering a transition to a free market system. These include Georgia, Pennsylvania, New Hampshire, and Washington.

What has the McDonnell administration learned from government leaders from these other states?

“Our team has been working for four or five months,” McDonnell said, “talking to legislators, talking to people in the industry, looking at the best practices from other states, to try to find out what’s the best model for us to use in Virginia.”

Citing the historical context, McDonnell noted that “since Prohibition was repealed almost 80 years ago, 32 states have adopted a private system of distribution of alcohol. Only 18 states,” he said, including Virginia, are left with the control system.

Learning ‘what’s right for Virginia’
He said specifically that while “we’ve got some things we’ve learned about from other states,” he has “not talked to other governors,” instead looking at other states’ “experience and trying to find what’s right for Virginia.”

Returning to his theme about general government reform, McDonnell insisted that ABC privatization “is one of hundreds of issues that we hope to address in a government reform special session” of the General Assembly.

The ABC question, he admitted, “is one that’s got a little bit more of a profile because it’s a fairly significant, systematic change we think will generate maybe half a billion dollars for transportation, which is something we need.”

‘A win-win’
Moreover, he added, “it’s getting the government out of the business of alcohol distribution, which I don’t think it needs to be in. We’ve [sold] beer and wine [privately] for 70 years; we can certainly do distilled spirits” in the same way.

McDonnell argued that privatization is “a win-win,” because it gets “the private sector making economies of scale and, I think, it’s the right thing to do.”

Governor McDonnell’s interview with the Charlottesville Libertarian Examiner will be continued in Part 2. See the attached video for a complete recording of the conversation.

Publisher's note: This article was originally published on Examiner.com on August 8, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: Economist Antony Davies debunks arguments against liquor sale privatization

Economist Antony Davies debunks arguments against liquor sale privatization
August 5, 2010 5:12 PM MST

Based on studies he has done regarding the privatization of alcoholic beverage sales in other states, Duquesne University economist Antony Davies concludes that “the major opposition surrounds the social impact of privatizing alcohol. The conventional wisdom would say if you privatize alcohol, the state loses control, and you will see more social problems associated with drinking.”

Empirically, however, this is not true, Davies told the Charlottesville Libertarian Examiner in a telephone interview on August 5. He distinguished between levels of “control,” from the free-market systems that exist in most states, to moderate control (such as in Virginia, where beer and wine are sold by private businesses) to full control (such as Pennsylvania, where even beer and wine are sold by a state-owned monopoly).

No Substantial Difference
A 2009 study he wrote for the Commonwealth Foundation for Public Policy Alternatives (a Pennsylvania think tank) with fellow Duquesne economist John Pulito, resulted in these findings, based on statistics from 1970 through 2006:

“….advocates claim that the social goals of reducing alcohol consumption, underage drinking, and alcohol-related traffic deaths justify controlling wholesale and retail alcohol markets.

“Evidence from 48 states over time shows no link between market controls and these social goals.”

Dr. Davies said in the interview that “we’re not seeing any evidence that greater control leads to better social outcomes.”

There is an exception, however, that Davies pointed out over the telephone: “DUI fatalities are significantly higher in states with more control than states with less control.”

Other factors, however, are different, he said. “If you look at per capita alcohol consumption, there’s no difference as you move from full to moderate to light control.”

Underage Drinking
As to claims that state-owned liquor stores are a better protection against selling alcohol to minors and underage drinking, Davies explained that people think “at a gut level” that private businesses “have an incentive to sell to minors. We see that’s not the case.”

Why not? “If alcohol is sold in the private market, the owner of the store has a profit incentive not to sell to minors, because if he gets caught, he loses his license. He wants to protect his business.”

Davies, who is also a visiting scholar at the Mercatus Center at George Mason University in Northern Virginia, concludes: “If you look at the data, there’s no clear pattern [that emerges showing] that imposing more control reduces underage drinking.”

Financial Arguments
In addition to the “social outcome” arguments against privatization, Davies said that “there are some financial arguments but they tend not to hold too much water.”

Those arguments, he said, “are pretty easily knocked down when you realize the state can continue to tax alcohol regardless of whether it’s sold publicly or privately.”

Davies pointed to legislation currently under consideration by Pennsylvania, which proposes to sell that state’s alcoholic beverage stores. “What’s pushing this [proposal] is the budget crunch. Selling the state store system would immediately raise the $2 billion necessary to close the budget gap.”

From the state’s perspective, Davies continued, “this is a win-win situation financially. The state can sell off its ABC system for a lump sum of cash and then continue to collect alcohol taxes and fees.”

As for Virginia, Professor Davies said he did a “back of the envelope calculation” after “looking at latest ABC statement of revenues.” Superficially, he said, “Virginia would lose about 30 percent of what it’s taking in” in operating profits.

What that doesn’t take into account, however, is lost revenue from Virginia customers who do their shopping in the District of Columbia, Maryland, West Virginia, and North Carolina. Nor does it account for the revenue increases that will result from private operation of liquor stores.

“Here’s why it may be revenue-positive,” he explained. “You achieve all these things – more convenient locations, more convenient hours, better customer service, so sales will increase. Plus auctioning off licenses” will result in previously unavailable revenue for the state.

Rent Seekers
Davies also addressed why one of the primary opponents of ABC privatization would be groups like the beer wholesalers, whose products are already sold in privately owned stores.

“Beer wholesalers,” he said, “are most against privatization of wine and spirits because it increases their competition.” By making comparable products more easily available to the same customers, “that’s going to eat into the profits of the beer distributors.”

In that regard, Davies offered some advice for voters and taxpayers who are paying attention to the privatization debate in Virginia:

“Generally speaking, the economists’ mantra is ‘follow the money.’ If you find someone arguing for or against a regulation, ask where he gets his money from.”

That seems to be a simple explanation of the motivation of some opponents of ABC privatization.

Publisher's note: This article was originally published on Examiner.com on August 5, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.