“‘Woohoo:’ Trouble at the TABC”

The Texas Tribune
March 24, 2017

A months-long Texas Tribune investigation thrust the state’s far-too-cozy relationship with the liquor industry into the public spotlight, prompting a swift reaction by legislators and the exit of half-a-dozen high-ranking state regulators.

It began with an illustration made by a TABC staffer (on an agency computer during work hours) that was leaked to investigative reporter Jay Root. The illustration, which depicted top alcohol regulators on a plane to an industry conference in California, waving bottles of Lone Star Beer, helped cement the story as a bonafide scandal among lawmakers and the general public.

Our initial report showed top honchos at the Texas Alcoholic Beverage Commission had spent tens of thousands of taxpayer dollars traveling to swanky resorts outside Texas and staging lavish conferences at home, all with financial assistance from the liquor industry they were supposed to be regulating.

Our subsequent reporting, gleaned from court documents and sources including former and current TABC employees, found further spending controversies and a striking example of state regulatory overreach on steroids: Over three years, the agency threatened to cancel all 164 permits for the state’s largest liquor retailer or fine them more than $700 million — over a single late invoice of $778.

As we published what we found, TABC officials repeatedly dismissed our reporting and blocked the release of public records. Yet state lawmakers were paying attention.

The political fight over Texas’ liquor laws – among the strictest and most arcane in the country – have been closely covered by news outlets for decades. But our reporting was the first to show in detail the extent of the pay-for-play relationship between regulators and the state’s powerful liquor industry.

Within two weeks of the first story landing, the Texas House voted unanimously to bar most out-of-state trips by the agency and restrict its use of money from outside groups funded by the liquor industry. Within a month, TABC officials were being grilled on our reporting at an ethics hearing at the Capitol. Four days after that, TABC Chief Sherry Cook stepped down, a move Gov. Greg Abbott called “a good start.”

Six more members of the agency’s executive management soon followed, and the governor appointed an interim director — a lawyer with a military background — to get the TABC “back on track.”

In less than four months, Root’s reporting triggered the mass departure of the top management at a powerful state agency that had lost its way, clearing the way for reform.

We believe Root’s TABC series is worthy of your consideration!

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Submitted by Emily Ramshaw.