This is an archived article that was published on sltrib.com in 2011, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
It was not demon rum that corrupted the Utah Department of Alcoholic Beverage Control. 'Twas stretch wrap.
That's the takeaway from the blistering legislative audit on how the state's liquor monopoly was managed by former Executive Director Dennis Kellen.
A pattern of unscrupulous — and, says the Office of the Legislative Auditor General, possibly criminal — behavior involved playing fast and loose with state bidding practices. And much of that involved an improper and, again, apparently illegal relationship between the DABC and a company called Flexpak, run by Kellen's son Brian.
Gov. Gary Herbert forced the senior Kellen out over the summer and sent his own Commerce Department director, Francine Giani, to fill the spot on an interim basis. Other top officials have since been dismissed or have resigned.
The matter has been appropriately referred to the office of Attorney General Mark Shurtleff, who requires no further prompting from us to get to the bottom of it all.
Giani told a legislative committee this week that the system was at fault, specifically an oversight board that seldom met and provided precious little oversight. The question is whether to empower that board, and expect it to do its job, or do away with it and put the whole thing under the governor.
The audit found that DABC workers often bought materials for their stores and warehouses and took bids afterwards, cooking the books along the way. They submitted invoices for purchases to make it appear that they were buying two cheaper items rather than one more-expensive shipment, because that way they appeared to be making deals too small to come under state bidding practices.
Flexpak, which sells stretch wrap, pallets and other items necessary to the operation of liquor stores and warehouses, was the recipient of some $370,000 in DABC business going back to 2003, when Dennis Kellen was deputy director. Kellen denied the relationship to his superiors and the audit strongly suggests that he bullied his own staff into silence.
All this at a time when the agency was responding to budget-cutting pressure by closing stores and laying off staff.
A long history of bad DABC audits followed by zero reforms suggests that lawmakers have been too busy demonizing the consumption of alcohol to take seriously the state's role in marketing it. But this audit makes clear that the problems at the liquor department were not alcohol-related.
An outfit selling cupcakes would be just as wrong to do what the DABC staff stands accused of doing. And, given a long history of lax oversight, no less likely to fall into it.