An internal investigation into problems related to deliveries from the warehouse of the county’s Department of Liquor Control is expanding, DLC Director George Griffin said Wednesday.
Griffin’s comments came a couple of weeks after a televised report by the local NBC affiliate, Channel 4, found that some DLC delivery crews were skimming cases of beer from their trucks and then seeking to sell them on the side at discounted prices.
“We have expanded our investigation to include some other drivers,” Griffin said in reviewing the situation during a regularly scheduled meeting of the county government’s senior management staff. “We’re doing that in conjunction with the IG,” he added, referring to the county’s Office of Inspector General.
Griffin also indicated he had been aware of problems in the DLC delivery system prior to the NBC4 report earlier this month, saying, “We had been working on it for some time; the IG has been working with me and the DLC for most of this year.” He said the IG’s office had initially focused on the DLC’s operation of its own retail stores and its procedures for licensing of county establishments authorized to sell alcoholic beverages, and had then moved on to scrutinize management controls at the DLC’s Gaithersburg warehouse operation.
“So we were already conducting an investigation on this before Channel 4 got involved – in fact, it was a DLC employee who called Channel 4 and told them there was an investigation and an issue here,” Griffin said.
However, Griffin acknowledged his department had not been previously aware of another problem — an instance of a delivery crew drinking on the job — until a separate report aired by NBC4. “We did not know that these two individuals were drinking on the job,” Griffin said Wednesday, while adding, “I’m happy to say that those two individuals are no longer working for the county at this point.”
The NBC4 disclosures – which prompted one member of the County Council, Hans Riemer, to call for a criminal investigation – come at a time of increasing debate about whether the county’s unique public control system for the distribution and sale of liquor, wine and beer should remain in place.
Maryland Comptroller Peter Franchot, who in recent years successfully forced Worcester County (Ocean City) to abandon a public control structure, has vowed to turn his attention in the coming months to Montgomery County – whose public control system dates back to the repeal of Prohibition in 1933. However, a number of county officials are reluctant to risk losing the roughly $30 million in annual profit that the DLC now produces for the county’s coffers.
Franchot’s office declined a request from Bethesda Beat to discuss the NBC4 allegations after they broke last week.
“It’s always unfortunate, but these types of things happen once in a while if you have a large organization – a few people do bad and stupid things,” Griffin said of the recent problems involving the DLC. “Fortunately, it’s very rare.”
In its report on skimming, the NBC4 investigative team reviewed six months of department credit reports, which the DLC uses to keep track of what it delivers to stores. It found some delivery crews were skimming cases of beer from their deliveries and labeling them as “short,” meaning they were reported as never placed on the truck. This then could open the way for the skimmed cases to be sold on the side.
NBC4 found that two-thirds of businesses expecting deliveries were “shorted” over the six months and that the same three delivery crews had as many as three times the amount of “shorts” as other crews.
Griffin said several management changes have been implemented in an effort to limit such problems in the future, such as rotating the routes that particular delivery crews serve – as well as regularly changing the makeup of the crews, so that the same individuals are not always working together. “That does hurt efficiency, and it does generate some complaints from the licensees [receiving the deliveries], but, nevertheless, we’re doing that now,” he said. Crews are now also required to call into the warehouse if shortages are discovered, he added.
At the same time, Griffin contended that the overall incidence of shorted deliveries is a “very small isolated problem.”
Said Griffin: “If you take all the legit and perhaps illegit shortages on the trucks, they total 2/10 of 1 percent of the deliveries we’re making in the course of a year. We’re successfully making deliveries at a better than 99.8 percent accuracy rate – which would be the envy of any wholesaler or distributor.” He noted that 3.8 million cases of the beer are delivered annually from the DLC warehouse.
He asserted that “most” of the shortages are “completely legit” and stem from an outside contracting firm that loads the DLC trucks each night in advance of the next day’s deliveries. “When there are shortages of product that should be on the truck that are not on the truck, we charge the contractor for the mistake they made – and they have paid for those charges,” Griffin said.
According to the NBC4 report, the DLC now tracks the short deliveries on paper rather than using a computer-based system, and that no one had been tracking which trucks had the highest number of short deliveries. The department has been moving to install an electronic inventory and tracking system, which Griffin indicated will go into operation early next year. The system will scan all products coming into the warehouse and out onto the trucks, according to Griffin.
“That eliminates a lot of the paperwork – and a lot of the problems,” he said.
