Op-ed: Utah liquor management is cleaning up a longtime problem

In August 2011, Gov. Gary Herbert asked me to serve as the interim director of the Department of Alcoholic Beverage Control, a role I fulfilled until Sal Petilos was appointed as permanent director in June 2012. During those 11 months I saw a great deal at the DABC that is relevant to the latest controversy involving the resignation of some DABC store managers who are unhappy with the implementation of the centralized ordering system.

When I first stepped into the DABC, I found a culture of dishonesty, self-dealing and accepting gifts at all levels of the operation, from individual stores to the administrative offices. Accountability and responsibility existed only in the employees who chose to practice those traits. They were an exception, not an expectation.

I could give many examples, but I will choose two that the recent controversy brings to mind. In 2011, a store manager allowed $37,000 of product to be shipped to a private event in Park City without the DABC having been paid for the product. Additionally, I soon discovered individual store managers and employees regularly accepted gifts from product manufacturers who were vying for shelf space in the stores. When I put an end to that unethical and illegal practice, I heard complaints from some of the same individuals I've read complaining about recent events.

The latest controversy centers around the newly implemented centralized ordering system. I wasn't involved in the DABC when the State Auditor's Office recommended the system, or when Petilos and Deputy Director Tom Zdunich made the decision to implement it. Some store managers are reportedly unhappy the new system decreases their decision-making authority.

I don't doubt that, but I also recognize the system eliminates the potential for store managers to cut side deals with individual manufacturers or business customers. That's good for the taxpayer. Ultimately, the proof is in the pudding. My understanding is the centralized ordering system has resulted in a significantly higher variety of products available in the store system accompanied by a much lower (less than 3 percent) rate of out-of-stock items.

At a more fundamental level, the recent controversy stems from the same challenge I faced at DABC in 2011 and 2012: state workers who don't want to be managed, who don't want to take instruction from their supervisors. That attitude doesn't fly in the private sector, and it shouldn't fly in state government.

Petilos and Zdunich are the final decision makers for issues such as the centralized ordering system. They — not individual store managers ­— are the ones whose necks are on the line if action (or inaction) leads to bad results. I admire those two for recognizing a problem, acting to correct it and continuing to monitor their implemented correction to see if it is working. I know both men well enough to know that they listen to input from across the DABC. They did their job and made a decision.

Ultimately, Petilos and Zdunich are responsible for the decision-making at DABC. Sometimes they have to make unpopular decisions. They have to answer to both the Alcoholic Beverage Control Commission and to the Utah Legislature. And they will have to deal with disgruntled employees. (Yes, DABC store employees are woefully underpaid. I tried to improve that situation while I was there, and I know the current leadership has fought every single year for better employee pay.) I am confident they are making the decisions they believe to be in the best interests of the state, and if they turn out to be wrong, the out-of-stock numbers will show that.

A handful of disgruntled employees and former employees does not equal a scandal; it means those whose necks are on the line are doing their jobs and making the tough choices.

Francine Giani is the executive director of the Utah Department of Commerce.