WASHINGTON – When Maryland officials caught six California wineries illegally mailing their product to individuals in the state in 1997, they levied fines ranging from $3,000 to $35,000 on the wineries.
State officials said there was little more they could do.
“The problem is, if they (the vendors) are located outside Maryland, we can’t reach them if they violate our laws,” said Charles Ehart, director of the Alcohol and Tobacco Tax Unit at the Maryland’s Comptroller’s Office.
That’s why Ehart and officials from other states are backing proposals in Congress that would give them the authority to charge out-of-state vendors in federal court if they violate state alcohol laws.
“States do not have an adequate remedy, because they are unable to enforce state statutes in federal court,” said Rep. Robert Ehrlich, R-Timonium, in testimony Tuesday to the Senate Judiciary Committee.
The committee was hearing a bill sponsored by Sen. Orrin Hatch, R-Utah. Ehrlich plans to introduce a companion bill in the House next week.
Supporters of the proposed change said it would help states crack down on the burgeoning business of selling over the Internet, a practice that is illegal in 35 states and which some charge is ripe for abuse by minors. State officials also worry that out-of-state vendors are skirting local taxes by shipping directly to consumers.
“What they’re doing is modern bootlegging,” said Barry McCahill, executive director of Americans for Responsible Alcohol Access. “We’re not anti-alcohol, we’re anti-crime.”
While the federal Bureau of Alcohol, Tobacco and Firearms is responsible for enforcing laws against illegal interstate shipping of alcohol, Ehart said they leave most of the work to the states.
“It is not at the top of their list,” Ehart said of the BATF. “They are clearly looking for the states to take the lead on this issue.”
But because alcohol violations are misdemeanor crimes in most states — including Maryland — it makes it difficult to prosecute an out-of-state vendors, said Ehart.
“Few state’s attorneys would extradite under a misdemeanor,” he said. “The purpose of Ehrlich’s bill would be to get jurisdiction.”
Ehrlich said his bill would also give states more power to pursue vendors who sell alcohol to minors over the Internet and through toll-free numbers.
“As kids become more and more sophisticated on the Internet, as it becomes more popular, there is the obvious potential for them to use it to buy alcohol,” Ehrlich said. “And it is only going to grow.”
Ehrlich said his bill should be palatable to the industry, since it still allows Internet sales where legal. Smaller wineries have said they need that market to survive.
Wine industry officials challenge the notion that minors are buying alcohol over the Internet, saying that wines offered online are too expensive for minors. They said it would be much cheaper and easier for a teen to get someone to buy alcohol for them at the corner convenience store.
“When you sell a wine for $25 to $40 a bottle, our product is not a target for underage drinkers,” said Michael Ballard, president of Savannah-Chanel Vineyards of Saratoga, Calif.
John De Luca, president and chief executive officer of the Wine Institute, said that instead of broadening the states’ reach, the industry has proposed that vendors agree to subject themselves to the jurisdiction and taxes of states where they sell their product.
Another option is to require that delivery services check identification to make sure they are not delivering to minors, De Luca said.
Others scoff at the notion that a deliveryman should also act as law enforcer.
“It’s a very hollow argument,” said Ehart. “Who says they (deliverymen) are trained to recognize fake IDs?”
De Luca said passage of the Ehrlich and Hatch bills would “be an ‘Open Sesame’ for litigation” against the industry, which is trying to work with the states to solve any problems. Passage of the bill would kill any incentive to meet the states halfway, he said.
But McCahill said vendors have nothing to fear if they are obeying the law.