For decades, a seat on the Illinois Liquor Control Commission was little more than a perk for the politically connected. The five commissioners cashed annual checks worth $15,000 to $20,000 for attending regular meetings and making such decisions as whether to fine taverns for failing to clean their beer taps.
But Wednesday, the commissioners found themselves wrestling with a controversial new law designed to promote the “fair, efficient and competitive” distribution of alcohol in Illinois. In a drab Loop hearing room, dozens of lawyers representing international liquor conglomerates and politically connected Illinois distributors descended on the commission, hoping to learn just how the agency will enforce the state’s new Wine and Spirits Fair Dealing Act, which freezes existing relationships between liquor producers and distributors.
The answers were slow in coming.
“This whole Fair Dealing Act has taken an awful lot of time and concentration,” complained commissioner Don “Doc” Adams, 63, a Springfield businessman and former chairman of the Illinois Republican Party. Asked how he’s been spending his free time lately, Adams replied: “Reading liquor law.”
The new law, signed in late May, granted near-monopolistic powers to the state’s liquor distributors, who had planned to take advantage of the situation by increasing their prices far beyond what was called for in a new state liquor tax that takes effect Thursday.
Under pressure from an embarrassed Gov. George Ryan, who had signed the new law, most big distributors have promised to scale back the increases.
But the law has thrown the liquor commission into tumult. The agency has been bombarded with requests from distributors demanding that it enforce the new law, which prevents distillers, brewers and winemakers from dumping their Illinois distributors without showing “good cause”–a provision that appears to be nearly impossible to meet.
Since the bill was signed into law, the commission has received eight complaints from distributors–about 1,000 pages of documents. Staffers have worked overtime and weekends to wade through the paperwork and begin drafting an enforcement policy.
The workload isn’t expected to subside soon. On Wednesday, Illinois House Minority Leader Lee Daniels (R-Elmhurst) sent a letter to the commission asking it to investigate the recent price-increase controversy.
On hearing of the new assignment, one liquor commission staff member sighed and muttered, “Oh, great.”
The commission also is defending itself in U.S. District Court against two lawsuits filed by Kendall-Jackson Winery Ltd. and Jim Beam Brands seeking to overturn the new law as unconstitutional.
Besides Adams, the other commissioners are Chairman Leonard L. Branson, 51, chairman of the accounting department at the University of Illinois at Springfield; James M. Hogan, 58, a top official of the Chicago Teamsters Local 714; Myrna Pedersen, 51, a Chicago media consultant; and Irving J. Koppel, 79, a Skokie lawyer.
Branson, Adams and Pedersen are Republicans. Hogan and Koppel are Democrats. All five were appointed or re-appointed to their six-year terms by former Gov. Jim Edgar.
Only Adams appears in state records as a regular campaign contributor to various Republican candidates.
The commission’s executive director, who is in charge of day-to-day enforcement duties, is Sam Panayotovich, 52, a former state representative from Chicago’s Southeast Side who a decade ago switched from the Democratic to the Republican Party. Since then, Republicans have rewarded him with a series of state contracts and jobs.
Panayotovich, now of Lansing, also ran unsuccessfully for Congress. But he is perhaps best known in state political circles as the former owner of Play It Again, Sam’s, a popular Springfield tavern for lawmakers, lobbyists and state workers.
Until it closed in 1994, the bar occupied the first floor of a state office building that also was home to the Illinois Department of Alcoholism and Substance Abuse.
Until recently, the Liquor Control Commission dealt almost exclusively with the mechanics of granting the licenses of liquor stores, bars, restaurants, distributors and manufacturers, and enforcing laws that date back to Prohibition.
In recent years, the commission’s oversight duties expanded to tobacco. And it is grappling with new headaches such as direct marketing of alcoholic beverages over the Internet–a case of technology leapfrogging laws that require producers to sell only to distributors, which then sell to retailers.
But nothing has compared to the heat of controversy generated by the Wine and Spirits Fair Dealing Act, commonly called the Wirtz law after Blackhawks owner William Wirtz, the powerbroker who helped push the measure through the legislature.
“This is brand new ground,” said the commission’s chief lawyer, John Stanton. “We’re kind of foundering. We’re kind of inundated.”
The commission’s uneasy new role was on display at Wednesday’s hearing as panel members delved into the eight complaints that have landed on their doorstep. Some involve little more than simple business disputes over unpaid bills–issues that a month ago never would have warranted the attention of state government.
In one case, the lawyer for a Chicago wine importer accused its distributor of failing to pay $80,000. The distributor had complained to the commission, demanding that the panel use the new law to force the importer to continue delivering wine.
At one point in the arguments, commission member Koppel slumped in his chair and propped his head in a hand.
“Why don’t you sit down and figure it out?” he sighed.
But before diving into the controversy generated by the new law, the commission took some time at the start of its Wednesday meeting to clear up some more traditional business.
Commissioners debated whether an Indian restaurant in Arlington Heights had failed to properly display its state license or whether a Southwest Side chili restaurant should be fined for failing to clean its taps.
Given that pace in years past, Adams said, it’s been difficult for the commission to adjust to its new role.
“The responsibilities are considerably larger now,” he said.
