A CEO Is Born Puzzlement at the LCB

Posted: January 05, 2007

The resignation of Jonathan Newman as chairman of the Pennsylvania Liquor Control Board is a loss for Pennsylvanians, and an unnecessary one at that.

Newman has done a commendable job in bringing better service and variety to the state-store monopoly. He announced Wednesday that he was quitting over Gov. Rendell's hiring of former state Sen. Joe Conti to become CEO of the agency.

The governor and a majority of the LCB rammed through Conti's appointment with only two days' notice last month. Newman said he could no longer justify taking his $65,000 salary.

It's still unclear why the LCB needs this new $150,000-a-year position, and what particular expertise Conti brings to run a $1.6 billion-a-year operation with 4,500 employees. Nothing against Conti's service as a legislator, but this appointment looks more like another taxpayer-funded soft landing than a smart business move.

It is hoped that hearings planned by state Sen. John Rafferty (R., Bucks), chairman of the Law and Justice Committee, which oversees the LCB, will clear up lingering questions. Among them are why the governor felt it was necessary to install Conti with such haste and without making the case of the need for the post, and whether the LCB was wasting money.

And if the LCB needs to be run more like a business, as the governor contends, shouldn't the state seriously consider privatizing the operation?

Under Newman's leadership, the agency has made great strides on behalf of consumers. He used the state's bargaining power to bring a broader variety of wines from around the world to state stores at low prices. He helped to create wine festivals in Philadelphia and Pittsburgh, and expanded online sales. During his 4 1/2-year tenure, state stores opened for Sunday hours, as well.

The new LCB chairman, P.J. Stapleton, pledges to trim costs and improve services. Whether Conti and the board can make this cash cow even more profitable, they should follow Newman's innovative path, which has benefited consumers.

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