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Recovery advocates say OLCC member should recuse herself from alcohol surcharge vote

A collection of bottles of Pappy Van Winkle bourbons are seen on the top shelf right, among other fine whiskies at the "Far Bar," located in the historic Far East Building in the heart of Little Tokyo in Los Angeles on Saturday, March 4, 2023.
Damian Dovarganes
Some Oregon distillers opposed a proposal by Gov. Tina Kotek to double the current 50-cent surcharge on hard alcohol to pay for behavioral health care and addiction services.

A lawyer for Oregon Recovers said in a letter that restaurant owner and Commissioner Kiauna Floyd has a conflict of interest.

A Portland-based recovery group wants a member of the Oregon Liquor and Cannabis Commission board to recuse herself from voting on a proposed surcharge on alcohol.

Nathan Morales, a lawyer representing Oregon Recovers, said in a letter sent Thursday that Commissioner Kiauna Floyd should recuse herself from a June 15 vote on adopting a 50-cent surcharge on bottles of distilled spirits. The increase, proposed by Gov. Tina Kotek in her budget, would double the tax on bottles of hard alcohol, raising $90 million over the next two years to spend on behavioral health care and addiction services.

Alcohol abuse is the third leading cause of preventable deaths in Oregon, killing more than 2,000 people a year, according to the Oregon Health Authority. Agency data also shows that alcohol-related deaths reached a 10-year high in 2020, killing more than 50 people per 100,000.

Morales said that Floyd, who owns Amalfi’s Italian Restaurant in Portland and is a member of the Oregon Restaurant & Lodging Association, has a conflict of interest in the matter. He cited a statement she made during an April meeting on the surcharge: “As a restaurant owner, I can say that I know that for me it would undoubtedly and inevitably mean job loss.”

The letter said that statement shows Floyd has a conflict of interest under Oregon law and that the commission should inform Kotek of the conflict.

A spokesman for the commission, Bryant Haley, told the Capital Chronicle that the agency has sent the letter to the Oregon Judicial Department for review.

“That’s standard procedure,” Haley said.

The board will vote after its June 15 public hearing on the added surcharge, with a majority deciding the outcome. The seven-member commission is short one member following former chair Paul Rosenbaum’s February resignation. Kotek asked him to step down after he acknowledged he had known for months about a scandal involving commission officials diverting a rare bourbon, Pappy Van Winkle, for their own use. Kotek appointed a commission member, Marvin Révoal, as chair.

Haley declined to comment on the merit of the recusal request but said board members are free to comment on policy as they’d like. They’re unpaid volunteers and represent different regions of the state and the industry. By statute, the board members must represent the six congressional districts in Oregon, with members from eastern and western Oregon. Oregon law also says that one commissioner must be from the food and alcoholic beverage industry.

Floyd and Commissioner Matt Maletis fulfill that role. According to the commission’s website, Maletis “grew up in the beer and wine business” and has held several liquor licenses. The website also praises Floyd’s experience as a longtime restaurant employee – she’s worked at Amalfi since high school – “giving her a unique level of experience, knowledge and understanding of business operations,” the site says.

The commission has discussed the surcharge during public meetings in April and May, and collected public comment. Haley said about 50 people have sent in written testimony.

The surcharge is opposed by some members of the liquor industry. David Ballew, CEO of Hood River Distillers, the state’s largest distillery, told Kotek, the commissioners and legislative leaders in a letter in February that Oregon has the highest excise tax rate on distilled spirits among states that control the price and sales of alcohol as Oregon does. He said Hood River Distillers does not have enough national sales to absorb an additional surcharge in Oregon, its chief market.

“Adding this new surcharge would put Oregon distilleries at a greater competitive price disadvantage that could lead to decreased sales, decreased shelf placements, and increased distillery business closures,” he wrote, urging the board to reject the surcharge.

The Oregon Capital Chronicle is a professional, nonprofit news organization. We are an affiliate of States Newsroom, a national 501(c)(3) nonprofit supported by grants and a coalition of donors and readers. The Capital Chronicle retains full editorial independence, meaning decisions about news and coverage are made by Oregonians for Oregonians.