Time to clean house at the OLCC

After investigating the Oregon Liquor Control Commission's Bend office last year, the state Department of Justice issued a highly unflattering report. The DOJ found, among other things, that local decision-making "appeared abrupt and punitive in nature or over-zealous." The then-regional manager, meanwhile, engaged in behavior "that is not acceptable nor even consistent with OLCC policy guidance."

None of this was news to local licensees. But OLCC Executive Director Steve Pharo sure seemed surprised that such problems existed in his agency. After all, he wrote in his response to the audit, the "OLCC is charged with supporting economic viability for Oregonians. Business people applying for new or renewed licenses often have their livelihoods at stake."

That's the OLCC's public position, anyway. But privately, the OLCC doesn't seem to care about business people whose livelihoods hinge upon the timely processing of license applications. So suggests a 2009 internal audit of the OLCC's licensing function. (That audit, by the way, was released just weeks before Bend officials sent a letter to Gov. Ted Kulongoski complaining about the regional office's hostility to local licensees.)

According to the audit, the OLCC's Portland regional office — one of five such offices statewide — had a backlog of 415 license applications as of April 1, 2009. New license applications took more than three times as long to process in Portland than they did in Bend and a whopping 20 times as long as in Salem. One application was still open after 18 months.

You'd think such dismal performance would have shocked agency officials into action. After all, livelihoods were at stake. But, no.

In fact, officials in the Portland office weren't even interested in gauging their office's performance. Managers had tools at their disposal to monitor the license process, according to the audit, but they simply chose not to use them. One of these is known as the Annual Pending Application Audit, but the official who oversees the Portland office said he didn't even look at the 2008 edition "because he was busy with other things." As a result, "no one in Portland has been held accountable for ensuring that licenses are investigated and issued in a timely manner."

Maybe they didn't get Pharo's protecting-livelihoods memo.

Ignoring the applications-pending audit, however, was far from the only accountability problem in the Portland office. Another was simple absence of supervision. In theory, the agency's licensing servicing manager supervised the Portland office's license investigators. But in reality, he "does not assign cases or monitor the case load of investigators," who "are self-managed and can select their own cases from the queue of backlogged applications." No wonder the Portland office was the only one with an application backlog.

Why in the world would supervisors allow inspectors in a barely functional office to manage themselves? The auditor of the 2009 report asked this very question, according to a Sunday Bulletin story by reporter Nick Budnick. Licensing Manager Dan McNeal told the auditor that they "used to do this but stopped a year ago because there was a near revolt with the investigators ... The investigators did not like having someone give them assignments or have them report weekly to."

In other words, the OLCC failed miserably to do its job because its employees persuaded their managers to quit managing them.

The 2009 audit — titled "Oregon Liquor Control Commission's Licensing Function Lacks Accountability and Effective Oversight" — confirms many unflattering government stereotypes. The agency is ineffective and inefficient. Worse, its managers come across as uninterested in discovering, much less correcting, glaring problems. And, really, should a public agency of the OLCC's stature need an auditor to suggest that inspectors from other field offices pitch in to reduce the Portland backlog?

The Legislature will be under incredible pressure next year to cut costs and increase efficiency. It cannot ignore the OLCC. Allowing the agency to stumble along as if the past couple of years hadn't happened would be, in effect, to condone the agency's mismanagement. Sending this message would be particularly damaging, as the OLCC embodies the sort of self-serving arrogance that an increasingly angry public suspects may be widespread in state government.

At the very least, a thorough house-cleaning is in order. The OLCC must be staffed by people who recognize without being told that their actions — and their inaction — affect people's livelihoods and the state's economy.

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