Oregon Republican leaders on Tuesday asked Gov. Tina Kotek to launch an independent investigation into the Oregon Liquor and Cannabis Commission’s controversial acquisition of land for a new distribution warehouse and the agency’s practice of diverting bottles of high-end liquor for employees.
An internal agency investigation first obtained by The Oregonian/OregonLive last month revealed that six agency managers, including the executive director, had for years set aside some of the most sought-after bourbons imported into the state to be purchased for their personal use. One of those managers also told investigators he helped secure liquor for state lawmakers.
The Oregon Department of Justice launched a criminal investigation into ethics violations after the matter became public. That inquiry is ongoing.
“We understand that in certain instances, investigations are being conducted by the Department of Justice. This is not sufficient,” said a letter to Kotek from Senate Republican Leader Tim Knopp of Bend, House Republican Leader Vikki Breese-Iverson of Prineville, and Senate Independent Leader Brian Boquist, who represents parts of rural Yamhill and Polk counties .
Reminding Kotek, a Democrat, that on multiple occasions she had committed to increasing accountability and oversight in state government, the lawmakers requested that independent nonpartisan lawyers be used for investigations, and that OLCC and the attorney general immediately release the names of all lawmakers who “used their position for personal gain, an action which Oregon government ethics laws clearly prohibit.”
“To preserve public trust,” they added, “it is imperative the names be released.”
The governor’s office and OLCC did not reply to emails requesting comment Tuesday afternoon.
Last month, the agency’s executive director, Steve Marks, and the chair of the agency’s policy board, Paul Rosenbaum, resigned at the governor’s request.
Three other employees — Deputy Director Will Higlin, Chief Information Officer Boba Subasic and Distilled Spirits Program Manager Chris Mayton — were fired on March 9, according to a source briefed on their status but not authorized to speak on behalf of the agency. Two other employees remained on paid administrative leave at that time.
Each of the six employees told an internal investigator that he had secured rare liquor. They said they had it sent to liquor stores, where they purchased it and that they kept it for themselves or gave it as gifts. All denied reselling the bottles, which are in-demand on the secondary market.
The liquor scandal also cast a new spotlight on the agency’s 2021 acquisition of 33.75 acres of land in Canby where it plans to build a new headquarters and distribution warehouse. The OLCC has been pursuing the expansion for years. It says its current facility is undersized and outdated, undercutting liquor sales volumes and reducing potential tax revenues for the state.
In April 2021, in a deal first reported by Willamette Week, the agency agreed to pay $40.8 million for the parcel, an extravagant price given that it was subsequently appraised for $22 million and had been assembled by a commercial real estate firm for a fraction of that price not long before.
In an advisory decision, the state’s Public Land’s Advisory Committee rejected the deal, but the state went ahead with the purchase anyway. The estimated cost for the overall project – $146 million in 2022 – has more than doubled from the agency’s original estimate.
“On the outset, this suggests a negligent breach of the agency’s fiduciary duty,” the lawmakers said in their letter to Kotek. “In the spirit of government transparency, working Oregonians deserve assurance they can trust the Legislature and State Agencies with their tax dollars.”
– Ted Sickinger; tsickinger@oregonian.com; 503-221-8505; @tedsickinger
