Lawmakers, Franchot Go to War Over Alcohol

The inevitable war between the Maryland General Assembly and state Comptroller Peter V.R. Franchot (D) broke out in spectacular fashion on Tuesday, after state Sen. Benjamin F. Kramer (D-Montgomery) introduced a bill to strip the comptroller’s office of its principal regulatory duties and Franchot called Kramer corrupt.

Franchot also said Kramer’s legislation is the byproduct of legislative leaders’ hostility to him and fealty to “big, out of state corporate beer interests” – and “an act of complete petty retaliation” for Franchot’s ongoing efforts to boost the state’s craft brewing industry. Left unsaid is that it perhaps could also be retribution for his chumminess with Gov. Lawrence J. Hogan Jr. (R).

It was only a matter of time before the two sides erupted over the issue of alcohol. Both Franchot and his critics in the legislature have been skirmishing over liquor policy for the past few years. And each side has tallied a long list of grievances against each other.

Kramer’s measure, Senate Bill 703, would strip the comptroller’s office of the authority to regulate the alcohol, tobacco and motor fuels industries and place the responsibility under a new commission to be appointed by the governor.

Kramer said the bill stems from the work of a legislative task force he served on in 2018 that studied how alcohol is regulated in the state. That task force was assembled after Franchot spent 2017 and 2018 torching Assembly leaders for their opposition to legislation he promoted easing restrictions on the state’s growing craft brewing industry.

Kramer said his legislation was based on more than 30 task force recommendations and had nothing to do with Franchot personally. He cast it as a public health and public safety measure.

“I know Peter wants to make himself out to be a martyr and say this is about him,” Kramer said.

The lawmaker has also introduced legislation banning the comptroller from raising money from the alcohol industry, which he regulates, and another measure that would crack down on parents who allow minors to drink alcohol in their homes. He said Del. Warren E. Miller (R-Howard and Carroll), who also served on the interim legislative task force, will introduce companion legislation in the House.

House Economic Matters Chairman Dereck E. Davis (D-Prince George’s), whose committee considers legislation affecting the alcohol industry, also dismissed the suggestion that the legislation targets Franchot.

“No one’s worrying about retaliating against the comptroller,” Davis said. “He’s not that important to us.”

But both sides pulled no punches Tuesday in the rhetorical war.

Franchot, who has made raging against “the Annapolis machine” a regular theme over the past several months, said Kramer’s legislation will be applauded by major industry players because it takes away his office’s oversight – and is a typical example of the legislature’s coziness with big business.

Franchot argued that there is no economic justification for taking the regulatory powers away from his office and putting them in the hands of unproven commissioners with no track record of regulating powerful industries.

“This is obviously going to make Exxon-Mobil very happy,” he said. “It’s going to make Budweiser very happy. It’s going to make Philip Morris very happy. But the citizens are going to get hosed because they’re going to get less enforcement of the state’s laws and they’re going to have to pay through the nose.”

Kramer said there should not be as much disruption as Franchot suggests. He said his legislation envisions moving the field enforcement division from the comptroller’s office and putting it under the purview of the proposed Alcohol, Tobacco and Motor Fuel Commission. The five-member commission, which would be appointed by the governor with legislative approval, would consist of one public health expert, one public safety expert, and executives with a fiduciary background.

Kramer said that moving the regulatory responsibility away from the comptroller’s office puts Maryland in sync with 47 other states where oversight of the alcohol industry does not rest with an elected official. And he said moving to prevent the comptroller from raising money from the liquor industry takes away potential conflicts of interest.

Sen. Benjamin F. Kramer (D-Montgomery)

But Franchot shot back that Kramer has a greater conflict of interest – and a strong incentive to defang the comptroller’s office – because his family rents property to a liquor store operated by the Montgomery County Department of Liquor Control. Franchot has railed against the government-owned alcohol distribution system in Montgomery County, and suggested Tuesday that Kramer’s income would be suffer if that system went away.

“This is someone who has alcohol money put in his pockets each month,” the comptroller said. “This is a little window into what I call the swamp in Annapolis.”

Kramer replied that it’s well known his family leases space to a county-owned liquor store and said he seeks guidance from the legislature’s ethics counsel whenever a vote takes place that could affect his family’s holdings.

“I would challenge the comptroller to show a connection between this legislation and the Department of Liquor Control in Montgomery County,” he said. “There is none.”

‘I don’t owe the comptroller a damn thing’

Franchot was also critical of Davis. He said the powerful committee chairman has refused to extend him the traditional Annapolis courtesy of introducing two liquor-related bills on his behalf – the measure to help the craft brewers, and another providing incentives to retailers who sell only Maryland alcohol products.

“It’s unprecedented,” Franchot complained.

House Economic Matters Chair Dereck E. Davis (D-Prince George’s) talks to reporters about alcohol legislation Tuesday. Photo by Bruce DePuyt

But Davis said Franchot had not earned the consideration. He urged the comptroller to contact another lawmaker to introduce his bills.

“How can I put this: I don’t owe the comptroller a damn thing,” Davis said, adding that while he had been willing to introduce Franchot’s bills as a courtesy in previous years, including the craft beer legislation last year, circumstances have changed.

“He didn’t show his ass last year the way he has this year,” he said.

Both Kramer and Davis said Franchot’s rhetoric and reliance on personal attacks is reminiscent of President Trump.

Meanwhile, the Senate Education, Health and Environmental Affairs Committee offered another rebuke to Franchot late Tuesday, passing a bill that would give local school districts the option of starting the school year before Labor Day. It would upend an executive order issued by Hogan – and championed by Franchot for years – that all school systems must start the year after Labor Day.

The bill, which the committee approved along party lines in a 7-4, moves to the Senate floor.

Hogan spokeswoman Amelia Chassé did not respond to a request for comment Tuesday on the legislation targeting Franchot’s regulatory powers.

But the governor and comptroller will be together in an Annapolis tavern Wednesday afternoon, as Hogan signs a proclamation declaring this month FeBREWary.

Danielle E. Gaines and Bruce DePuyt contributed to this report.

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