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Giani says no to privatization, yes to restructuring Utah liquor regulation

Published: Tuesday, Jan. 31 2012 2:27 p.m. MST

SALT LAKE CITY — The interim director of the Utah Department of Alcohol Beverage Control says she doesn't want to see the state's liquor industry privatized, but she does believe the department needs to be restructured.

"I don't think privatization is the answer," said Francine Giani, executive director of the Utah Department of Commerce. "I think you would lose money coming to the state."

Gov. Gary Herbert appointed Giani in August to oversee the agency after legislative audits found it fraught with mismanagement and accused the former executive director of committing a felony for doing business with a company his son owns.

Giani reported her efforts to shape up DABC to the Business, Economic Development and Labor Appropriations Committee on Tuesday. She said she has worked with the department to bring budgets in line, keep stores open that were slated for closure and "move people along who shouldn't be there anymore."

"In the last six months, I believe that in fact the ship has been righted. Is it perfect? It is not," she said, adding legislative auditors continue to review the agency.

Several lawmakers will propose bills to deal with issues raised in the audits, and legislative leaders expect the measures to emerge in a week or so.

Sen. John Valentine, R-Orem, is working on a plan to restructure the agency, including how it's governed and to whom it reports. Rep. Ryan Wilcox, R-Provo, is looking at contracting out state-run stores, an idea some have loosely described as privatization.

Committee members praised Giani for the work she has done. "I've made a lot of enemies along the way," she said.

A part-time, five-member commission and a full-time director have overseen DABC for decades. But Giani said from what she has learned, the system doesn't work.

"You can't run an agency with a part-time commission," she said. "There are so many moving parts every day."

Furthermore, to call the commission part time, she said, is a misnomer.

"They’re not there four hours a day or every other day. They are there two or three hours a month," she said. "It is just impossible to have that model work and be effective. I don't believe it has been effective."

Asked by a committee member what she would do with the commission, Giani said, "I would love to have this conversation in private."

Until accepting the interim DABC assignment, Giani said she had never been in a state liquor store in her 30 years in Utah.

"There's a lot of things with this business that we love to hate. The reality is they do bring a lot of money to the state," she said. Revenue from liquor sales goes the state's general fund and the school lunch program.

Giani said all of the state's liquor stores are profitable, but some could make money with better management. One of the problems, she said, is that clerks make only "$8 and change" an hour and don't receive benefits.

"That's ridiculous," she told the committee. "Forgive me for saying people who sell alcohol should get paid more."

The new director should look at that issue, Giani said, noting her stint over DABC ends when the Legislature adjourns in March.

"I will be doing the happy dance all the way back to commerce," she said.

E-mail: romboy@desnews.com Twitter: dennisromboy

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