Lawmakers and Top OLCC Officials Benefited From Diversion of Rare Whiskey, Investigation Finds

Director Steve Marks and five other senior agency officials confirm diversion of Pappy Van Winkle and other bourbons. No lawmakers named.

The Oregon Liquor and Cannabis Commission today released the results of a potentially explosive investigation.

The probe found that six senior agency officials, including longtime director Steve Marks, diverted rare and valuable whiskey from public sale to their own personal use—and to unnamed lawmakers. (Gov. Tina Kotek forced Marks out last month prior to learning about the investigation.)

One of the officials, Chris Mayton, who is director of distilled spirits for the agency, which has a monopoly on hard liquor sales in Oregon, told an investigator that it was agency practice to divert some rare bottles to legislators.

In the summary of his investigation, investigator Travis Hampton wrote:

“Mayton wanted to reiterate how widespread this practice is and what his position requires, procuring product for individuals—which included OLCC employees and legislators.”

Hampton further wrote, “[Mayton] qualified he has served as a ‘facilitator’ for customers, OLCC employees and legislators hundreds of times as part of his work duties.” (There are no lawmakers named in any of the investigative materials the OLCC released to WW. The Oregonian first reported the internal investigation.)

The whiskeys in question, according the investigation, include some of the nation’s rarest and most valuable bourbons: “Elmer T. Lee Single Barrel; Pappy Van Winkle 10-year; Pappy Van Winkle 12-year; Pappy Van Winkle 15-year; Pappy Van Winkle 20-year; and, Pappy Van Winkle 23-year.”

Prices for such bottles on the OLCC website are a fraction of those quoted online from resellers. For example, the OLCC’s price for a fifth of 15-year-old Pappy Van Winkle is $119.95; online quotes from sellers in other states are commonly over $2,000.

Marks admitted to Hampton that he’d asked for some of the 23-year-old Pappy Van Winkle to be diverted for his own use. Other senior agency officials made similar admissions.

The OLCC received allocation of the rare whiskeys from manufacturers. It sent some to state liquor stores, some to bars and restaurants, and set some aside for lotteries that gave the public an opportunity to buy the bottles.

Because the OLCC uses a standard markup for all liquor regardless of its rarity, prices for Elmer T. Lee and Pappy Van Winkle are vastly lower here than in other states—the issue is Oregonians just cannot buy them in most cases because demand overwhelms supply.

That’s where the practice of diversion comes in: According to the investigation, the OLCC set aside a “reserve” roughly equal to the number of bottles made available to the public through lotteries. At least six senior managers ordered bottles be set aside from that reserve for their own personal purchase. All were interviewed by Hampton and all said they paid for the bottles, usually picking them up at a state liquor store in Milwaukie near agency headquarters.

It may not matter that officials paid for the bottles. Oregon’s government ethics laws prohibit public officials, such as lawmakers and state agency officials, from using their public position for private gain. In this case, the gain would be the opportunity to buy rare whiskey not available to others and worth far more in the free market than the price officials paid.

Much remains unknown: which lawmakers benefited from the diversion; how many bottles were diverted over how long; whether agency officials or others resold their bottles (agency officials denied reselling the bottles), among other questions. Gov. Tina Kotek has asked the Oregon Department of Justice to conduct a civil investigation and it’s highly likely the Oregon Government Ethics Commission will investigate as well.

For his part, Marks ordered an end to the diversion in August, according to a letter included in the investigatory materials. And the OLCC found Dec. 22 that agency officials had violated state ethics laws by diverting bottles for their own use, placing reprimands in the affected employees’ files. It is unclear whether the agency referred its findings to the ethics commission.

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