In honor of all the folks at the Washington Wine Commission and their associates (aka “old boys”), we salute you hard working, easy spending (with public tax dollars) wine splafs with our own annual tradition… THE TRUTH.
The 25th rendition of the Auction of Washington Wines begins this weekend over at Chateau Ste. Michelle. The annual event benefits uncompensated care patients at Children’s Hospital and recently has contributed tens of millions of dollars to that account. However, one of the original creative partners, the Washington Wine Commission (WWC), is barely known to wine consumers. Very few know who they are and what they do. Let’s fix that.
The WWC formed in 1983 with assistance from the State Department of Agriculture to promote the wines of Washington. This was in response to both the growing number of new wineries (there were 13 additions in 1982, the most since 1938) and the need to complement the legislative support of the newly formed Washington Wine Institute. The WWC formally became a commodity commission (one of 23) under the auspices of the State Department of Agriculture in 1987, with Simon Siegl as its first Executive Director.
The WWC is funded by a tax on growers ($3 per ton) (RCW 15.88.130) and producers (2 cents per gallon) (RCW 66.24.215) and that revenue stream has recently amounted to almost $4 million annually.
The WWC consists of twelve voting members and one non-voting member (RCW 15.88.030). Five voting members are growers, five more are producers, one voting member is the director, and one voting member is a wine distributor. The non-voting member is a producer who makes wines primarily from fruit of non-vinifera grapes. Of the growers, at least one has less than 50 acres of vinifera grapes, at least one has over 100 acres, and two MAY be those who produce AND sell their own wine. Of the producers, at least one makes less than 25,000 gallons annually, at least one makes over a million gallons annually, and at least two make wine from their own grapes. At least one member SHALL be from a wine producer located in western Washington and at least two SHALL be from eastern Washington. There is a requirement of at least seven voting members to constitute a quorum for any business transactions.
Here’s where it gets interesting. The wine producers are designated positions one through five (RCW 15.88.040). The growers are designated positions six through ten. The wine wholesaler is at position eleven. The non-voting industry member is number twelve. The director is position thirteen. Position number one represents someone producing over one million gallons of wine annually and is granted six and one-half votes (RCW 15.88.100) out of a possible twelve, OR eleven votes times the percentage of wine produced in the State by the representative of position one. The remaining votes are equally divided among the remaining members. Only in the event that the producer occupying position one makes less than 25% of the wine in the State reduces the power of position one to one vote. This six and one-half votes allowance violates RCW 15.88.040 where “in no event shall that producer directly or indirectly control more than fifty percent of the votes of the commission.” This likely explains why Ste. Michelle Wine Estates makes so much wine, albeit under multiple labels. Consider it a major incentive.
The WWC’s mission is clearly stated as “to raise awareness and demand for Washington State wine through marketing and education while supporting viticulture and enology research to foster ongoing industry growth.”
Like any marketing machine, the WWC only releases glossed-up information about itself and the wineries that pay extra to be displayed on its website. All the yippie-kye-yay superficial stuff can be found there, but what really goes on at a government agency with a $3-million-plus lifeline? Is it really all just a “good news” office because they do everything right or do they “spin it” like China, or worst of all, conceal it like Iran or North Korea Thankfully, this State has an independent auditor who inspects government agencies to ensure that the tax monies from citizens and businesses of this great State are utilized properly. Based on what the WWC tells us, everything’s swell and peachy-keen. Let’s help the WWC confirm the impression they want us to believe.
For the WWC, the fiscal year begins on July 1. The first audit covered the period of July, 1987 to June, 1990. The summary, per the Seattle Times, detailed the WWC improperly spent $3100 of taxpayer money on food and travel. The twelve members repaid $2300 while contesting the remaining $800. The commissioners defended the expenses of food, wine, travel, and PARKING TICKETS as related to media and promotional efforts.
The next audit covered the period from July 1, 1993 to June 30, 1996. The auditor found travel expense documentation did not fulfill state regulations and “expenses exceeded that allowed under state regulations.” The WWC excuse was “personnel stated they were unaware of state travel regulations.” The WWC response was “management has already taken steps to remedy our non-compliance.” Get used to that jingle.
The following audit covered the period from July 1, 1996 to June 30, 2001 (Washington had 150 wineries). Two major findings here. (1) the WWC “established employee compensation packages that do not conform to state law.” The WWC blamed the Department of Retirement System (DRS) for incorrect advice, although there was no response from the DRS of that accusation. Also, (2) the WWC “budgeted expenditures in excess of revenues in four of the past five years.” At the end of this audit period, the WWC had $43,474 available to pay $33,760 in bills. The auditor found various times where the WWC had to delay payment and subsequently incurred $2,000 in finance charges.
Let’s keep going. The next audit period was July 1, 2001 to June 30, 2004 (350 wineries). The audit summary found WWC officials did not comply with public records retention requirements, amongst other fumbled findings. (1) The WWC somehow was not able to provide records proving bid law compliance when it awarded an office remodeling contract, with the final payment amounting to $32,722. (2) Record of a $25,000 “bonus” payment to then Executive Director Steve Burns, who left in August, 2004 then returned to serve for four months in 2005. (3) Lack of documentation of minutes from a WWC meeting in September, 2001. (4) Lack of documentation of “approved personnel estimates for Commission staff for fiscal years 2002 and 2004. This made verification of amounts paid difficult.” (5) Lack of records “showing the Commission approved numerous travel expenditures for the Executive Director who served until August, 2004. The cost of the trips was $14,578 and was charged to the Commission’s credit card.” The WWC excuse was “records had been misfiled and could not be located.” The WWC’s response was “the Commission believes that the current staff, trained in state record retention requirements coupled with the Commissions’ recently implemented document retention system will prevent the loss of supporting documentation in the WWC offices.”
Does it get worse? It does. The next audit period covered July 1, 2004 to June 30, 2008. The findings: (1) a $50,118 payment where the WWC initially could not find documentation to justify the expenditure as a “legitimate business purpose.” (2) A payment of $1,265 to the Commission Director for travel expenses of $561 for mileage and $566 in meal expenses for other individuals without any supporting documentation. (3) A payment of $815.07 to a former employee to cover that person’s COBRA payment. (4) Eight statements, totaling $112,898, that did not contain sufficient justification that it was for business purposes. (5) The Commission lacked a written policy for meals and meetings. One of those meals/meetings cost $973 for a farewell party for a staff member. One meal receipt included a $50 tip on a $74 bill. One billing statement included an $84 late charge. Three employee personal expenditures totaled $517, which was reimbursed and included purchases at a retail store ($285) and a RECREATION CENTER ($232). The WWC’s response: “the Commission has implemented firm policies to control and monitor expenditures –including the requirement that employees provide business purposes and proper supporting documentation for all credit card transactions and expense reimbursements. These actions will support the efficiency of the Commission’s work to promote the Washington wine industry without the benefit of general tax dollars or public funding. The Washington Wine Commission strongly believes it has made and is making great strides in transparency and accountability in-line with the Auditor’s recommendations.”
The latest audit report covered July 1, 2008 to June 30, 2009 (680 wineries). The summarized finding was “The Commission’s internal controls over payments were inadequate, resulting in questionable expenditures.” Of the $3.9 million collected over the period, $2,749,675 was paid to vendors. The auditor reviewed 34 payments totaling $38,465 and found these amazing events “that did not appear to be for valid business purposes.” The WWC (1) “spent $4,922 for a banquet room and catering for a Commissioner’s going-away party;” (2) “spent $1,080 for wine and $10 for alcohol during a dinner with 12 employees, 13 Commissioners, and 4 non-employees during the annual Board retreat;” (3) “spent $778 for a Commissioner’s dinner during an annual Board retreat” (the expenditure was not justified by an itemized receipt); and (4) “spent $696 for seven purchases of wine during staff meals. The purchases were not related to promotional hosting.” On a minor note, the WWC “spent $100 for gift certificates and $12 for doughnuts to give as tokens of appreciation to vendors.” And, “the Executive Director’s expenses are not reviewed or approved prior to reimbursement.” Also on the docket, the auditor found “the Commission does not have a policy that addresses meals with meetings and has not clearly defined “travel status” as referenced in WAC 16-575-030. As a result, we were unable to determine if costs totaling $4,465 for meals with meetings and travel were allowable.”
The auditor concluded, in effect, “the Commission paid $7,598 in questionable expenditures. We were unable to determine if costs totaling $4,465 for meals with meetings and travel were allowable. Further, control weaknesses increase the risk that misuse, loss, or misappropriation could occur and not be detected in a timely manner, if at all, by Commission officials.” The WWC response: “in fact, the Commission has been working diligently since last spring to establish and approve detailed policies regarding travel and meals with meetings.”
Okay, okay, so no one’s perfect, especially in government. I mean, heck, we are talking about 2% of the Commission’s annual revenue (acquired from taxes that the public ultimately pays). It’s a pittance, right? Oh yeah, let’s not get too arrogant and skip mentioning that as an excuse to the auditor. Besides, this is “standard” operations of a typical agricultural commission. Or, is it?
The following are findings by the auditor and can be found in the accountability audits of those commissions (italicized).
“…regarding internal control over financial reporting and major programs: ‘no deficiencies.’” Apple (ironically, the 2009 operating revenue was almost identical to WWC’s)
“The Commission complied with state laws and regulations and its own policies and procedures in the areas we examined. Internal controls were adequate to safeguard public resources (assets).” Alfalfa Seed, Barley, Beef, Blueberry, Canola Rapeseed, Dry Pea and Lentil, Grain, Hop, Strawberry, Turfgrass Seed
“The Commission complied with state laws and regulations and its own policies and procedures in the areas we examined.” Cranberry
“In the areas we examined, the Commission’s internal controls were adequate to safeguard public assets. The Commission also complied with state laws and regulations and its own policies and procedures in the areas we examined.” Arts, Asparagus, Dairy, Mint, Potato
“The Commission complied with state laws and regulations and its own policies and procedures in most areas we examined. Internal controls were adequate to safeguard public assets. However, we noted certain issues that we communicated to Commission management. We appreciate the Commission’s commitment to resolving the issues.” Bulb, Seed Potato
“In most areas, the Commission complied with state laws and regulations and its own policies and procedures. However, we noted certain issues that we communicated to management.” Fruit, Puget Sound Salmon, Tree Fruit Research
“In most areas we examined, the Commission complied with state laws and regulations and its own policies and procedures. Internal controls were adequate to safeguard public assets.” Red Raspberry
Ok, so the WWC likes to party on the taxpayer’s dollars. These people represent the wine industry to the world, so they MUST be the classiest individuals with the highest integrity. Here’s FORMER “Senior Marketing Manager” Madeline Dow referring to the WAwineman as “a total delta bravo” on a tweet. How did she know I had military roots? Oh wait, let’s look up this term in Urban Dictionary. Ah. It means a “douchebag.” Makes one wonder when she’s in Hong Kong, representing Washington State, and refers to people there as “That Chinaman is a total delta bravo.” Or, if in Chile, she blurts out “That culo is a total delta bravo.” Or, if in Spain, she spits out “That cabrón is a total delta bravo.” Then there’s Sean Sullivan, the secret “employee” of the WWC. He referred to someone as “little,” in a derogatory way. Not the smartest of comments, but that it occurred DURING a Washington Wine Commission-endorsed event made their fuck-ups even more of a glaring embarrassment to the Washington Wine Commission. Even more remarkable is how they ‘cap’ on a paying consumer (and advocate) of Washington wines. I also wonder how their actions fit within the WWC’s mission statement.
Are you finally beginning to sense a lack of institutional control going on at the Washington Wine Commission, like for the last, oh, TWENTY-PLUS YEARS?
To the wine…
Food pairing was dark choco-raisins, Beecher’s Flagship cheese, and Keebler Club crackers. Fitting.
Tasted at 61-65 degrees on the IR temp gun. Deep magenta in the Riedel with scents of damp earth, mushrooms, plum, and blackberries. Full-bodied on the palate with a long tail of blackened toast, asphalt, black plum, little heat, and farmed blueberries.
Alcohol: 14.8%. Seven Hills Vineyard. Walla Walla Valley AVA. Originally released in April, 2009. Grapes harvested Sept, 15-20. Barrel-aged for 18 months in 30% new oak with four rackings. pH 3.91. TA 0.64%. RS <0.2%. 1013 cases.
Power: 2/5. Balance: 3/5. Depth: 3/5. Finesse: 3/5. Rated: 91. Value: $30. Paid: forgot. Music pairing: “She’s So Mean” by Matchbox Twenty. This is WAwineman… uncorked, uneducated but not uncouth.