Gov. Tina Kotek selects corrections watchdog to take over Oregon liquor commission amid rare bourbon scandal

A watchdog who examines complaints within the Oregon Department of Corrections is Gov. Tina Kotek’s pick to lead the state’s scandal-bitten liquor agency.

Craig Prins, inspector general for the Corrections Department, will be put forward as an interim head of the Oregon Liquor and Cannabis Commission at a meeting Wednesday morning, the governor’s office confirmed. If he is approved by the agency’s seven-member board, Prins will take the place of outgoing Director Steve Marks, who is resigning under pressure.

“Craig Prins brings the necessary experience in change management to correct the course of the commission and support the employees doing the work every day,” Kotek said in a statement. “He shares my commitment to accountability and transparency, and his appointment will create an opportunity to strengthen oversight, improve customer service, and begin to rebuild the public’s trust.”

A former prosecutor and head of the state’s Criminal Justice Commission, Prins has served as an internal watchdog within the DOC since 2016. It’s not the first time he’s been considered to lead a troubled agency recently. Prins was among those considered to take the helm of the Office of Public Defense Services when its director was fired last year. Willamette Week first reported Kotek’s decision to hire Prins to run OLCC.

If confirmed, Prins will lead an important agency that is in major flux.

The OLCC distributes all liquor sold within the state and brings in a lot of money doing so. The agency is Oregon’s third-largest source of revenue, after income taxes and the lottery.

But Marks and five top OLCC managers have now been implicated in a scandal. According to an internal agency investigation last year, they all used their position to reserve bottles of hard-to-find bourbons, which they purchased for themselves or saved for others. The Oregon Department of Justice has launched a criminal investigation into the matter.

Kotek had already called for Marks to step down before the bourbon-hoarding practice came to light last week. His resignation becomes effective at 5 p.m. Wednesday.

Kotek has also signaled she will look to fire other top managers involved: Deputy Director Will Higlin, Budget Manager Bill Schuette, Distilled Spirits Director Chris Mayton, Chief Information Officer Boba Subasic and Information Services Director Kai Nakashima.

Such personnel decisions are typically left to an agency head, and Prins is expected to follow Kotek’s lead in cleaning house.

“If appointed, I will implement the changes in leadership requested by the Governor, fully cooperate with the Department of Justice, and work collaboratively with OLCC’s dedicated workforce,” Prins said in a statement.

An unusual system

Wholesale change at the top of the OLCC raises concerns for some observers.

“This is an exceptionally important business for the state of Oregon,” Danelle Romain, who lobbies on behalf of beer and wine distributors, said Monday. “After Wednesday you’re probably going to have an entire change of the executive leadership team including the people who know how to do the daily operations of the business. That’s a major threat. What needs to happen now is to get competent people.”

State liquor retailers in recent days have also credited Marks and his team with fostering positive change.

For about 20 years, Saleem Noorani has owned several liquor stores in the state. It wasn’t until Marks’ tenure, Noorani said, that he felt like retailers had an advocate at OLCC. Marks worked with liquor agents to lobby state legislators to update the contracts between liquor stores and the state to increase the percentage liquor agents get to keep on their sales.

“In the past, we felt unheard,” Noorani, president of the Associated Liquor Stores of Oregon, told members of the OLCC board of commissioners last year.

But others believe the bourbon scandal shows it’s time to rethink Oregon’s state-controlled liquor distribution model entirely.

In the fall of 2021, Scott Nelson won one of the OLCC lotteries. His prize was the right to buy a bottle of Old Forester Birthday Bourbon, which can retail for upwards of $1,000. Nelson’s price: $149.

Nelson, a former business editor at The Oregonian, tweeted about his victory, but wound up feeling conflicted about the lottery system, believing the process highlights how hard it is to actually obtain certain rare bottles. Oregon, he said, sets artificially low prices.

“That, by default, creates a black market and an opportunity for corruption,” he wrote to OPB. “It happens at all levels, from top OLCC administrators to store clerks, on bottles worth more than the OLCC-designated prices. As a result, most sought-after bottles don’t reach store shelves for ordinary consumers.”

Nelson said there is an entire spectrum of ways different states can control liquor distribution and believes Oregon is extreme in its control and monopoly.

“That has its consequences,” he said.

Mike Marshall, director of the group Oregon Recovers, said Tuesday it is time to scrap the state’s business-oriented approach to selling liquor.

“The original mission of the OLCC was to regulate alcohol sales to protect consumers,” Marshall said in a text message. “The alcohol industry, with Steve Marks and the current commission’s tacit support, shifted the narrative to suggest the purpose of the OLCC is to promote alcohol sales and Oregon’s alcohol industry.”

Marshall and his allies are planning to push an increase of alcohol taxes in this year’s legislative session, a move they say will help deter drinking.

Oregon voters are likely to be confronted with the question of whether to keep a state-run liquor distribution system in the near future. Large grocers, who want the right to sell hard liquor themselves alongside beer and wine, have repeatedly signaled they will look to do away with the model via a ballot measure.

Beyond day-to-day business, the OLCC is also in the middle of a major undertaking: building a new headquarters and warehouse in which to store the liquor it distributes statewide. That project has garnered criticism, after the expected price tag rose by 133% between 2019 and 2022 — from an estimated $62.5 million to $145.7 million.

Agency leaders have explained the increase as a mixture of costly land prices and soaring construction costs, and have defended what critics say was a disastrously expensive land deal. Those same leaders now appear to be on their way out as the project creeps forward.