By Pete Kotz
By Michael Musto
By Michael Musto
By Capt. James Van Thach told to Jonathan Wei
By Kera Bolonik
By Michael Musto
By Nick Pinto
By Steve Weinstein
People in New York and other big cities love to ridicule places in flyover country, like Kansas or Utah, for their "blue laws"—arcane statutes that can make it tough for the thirsty to get a drink.
Just last month, Utah finally dropped its legendary "private club" rules that, for decades, had made it tough to get a cocktail in that state, though its liquor stores will continue to be closed on Sundays. Kansas still has 25 "dry" counties, where it's illegal to serve alcohol by the glass.
But New Yorkers have little reason to feel superior. New York's own liquor laws include one that doesn't seem to make much sense.
While you can get a drink of just about any kind of fermented beverage in thousands of establishments of all sorts in this city, at just about any time of the day or night, there's one thing you still cannot do in New York: pick up a bottle of wine while you're buying groceries.
Perhaps the most graphic result of that particular statute is plainly visible on 14th Street near Union Square.
Trader Joe's, the California grocery chain that made its reputation largely on selling inexpensive wines—the firm's sales of the Charles Shaw wine "Two Buck Chuck" became so famous that it inspired a New Yorker profile—was required to have two separate storefronts on 14th Street when it opened its doors in March 2006.
Unlike shoppers in the other parts of the country where Trader Joe's has stores, you can't pick up a bottle of Chardonnay while you're scoring Mandarin Orange Chicken or a package of Nuts About Antioxidants Trek Mix. For that, you have to go next door, where Trader Joe's sells vino in a separate space, simply to get around the New York law.
Two storefronts, sitting side by side. Clearly, for no good reason at all.
The thing is, New York's blue law isn't about lingering religious attitudes about alcohol, the way it is in places like Utah.
New York's grocery store wine ban is purely about political power.
In the last six months, the state's supermarkets mounted another sustained political campaign to repeal the wine ban—this time, enlisting the help of a supportive governor. But once again, a powerful group of New Yorkers succeeded in blocking the measure.
No. It was the state's liquor stores and their lobbyists.
And the way your friendly corner hooch seller continues to keep wine drinkers from grabbing a bottle of red at the same time that they're picking up pasta, vegetables, and a pound of ground round is a classic lesson in how lobbyists, political strategists, and a tweaking of the truth control what gets done in the state of New York.
When Governor David Paterson declared his support for supermarkets and added a wine ban repeal to his 2009 budget package, backers of the measure believed they finally had a chance to get it through the state legislature.
But on January 28, just as the bill had reached a point of serious consideration in Albany, a previously unknown group calling itself "The Last Store on Main Street" suddenly appeared on the scene, circulating press releases opposing the measure.
The coalition showed off a sophisticated website and a large group of supporters that included various local and statewide liquor store associations and distributors. And it had somehow also enlisted some wineries to support its cause.
The group argued that the measure would "kill jobs" and ruin mom-and-pop liquor stores across the state, and it claimed that the bill would not raise anything close to the $160 million in state tax revenue claimed by its supporters.
"The Last Store is a coalition of wine retailers from around the state," says Wendi Leggitt, the group's spokeswoman. "These are one of the last remaining independent businesses in the state."
Leggitt works for Mercury Public Affairs, a powerful political consultancy partnered by ex–Pataki administration officials. They also employ ex–Democratic pols including former Bronx Borough President Fernando Ferrer. Leggitt was also the contact person for Mercury's political action committee, which doles out tens of thousands of dollars each year in campaign contributions to elected officials and political party organizations.
Leggitt's boss, Michael McKeon, also spoke on behalf of the Last Store coalition. He served as a top aide to Pataki, and worked on the former governor's political campaigns.
In an e-mail to its members, which was obtained by the Voice, Jeff Saunders, the head of the Last Store and a lobbyist who works for the Retailers Alliance Foundation, described the group's strategy: "There will never be an unanswered press release from a politician, a
supermarket groupie raging about how great it would be, or . . . a newspaper reporter that thinks she knows better," Saunders wrote. "We answer the media when it needs answering—and not all press needs answering, by the way—and we continue to support all those that have supported us and go after the people that haven't supported us . . . and turn them around!"
Despite the roster of prominent Albany lobbyists on the payroll, the Last Store isn't a lobbying group, Leggitt says. She calls it a "grassroots coalition of wine retailers from around the state."
In fact, the group itself is a registered lobbyist, according to state filings. In all, eight lobbyists are listed in the filing, including Saunders.
Not that the supermarkets' own lobbyists didn't spend a lot of money themselves, but the state documents also show that the Last Store group spent $412,000 on lobbying—including $3,875 for a party, $100,000 for an economic study, and more than $200,000 for "consulting services" paid to Mercury—mostly in February and March, right when the wine bill was being considered.
Just a few days after the Last Store showed up, another group also surfaced. On February 2, another organization calling itself a "grassroots" group began circulating press releases opposing the wine ban repeal. This one called itself "Law Enforcement Against Drunk Driving."
LEADD press releases stated that allowing wine sales in supermarkets would lead to more drunk driving and would increase petty theft in supermarkets and alcohol use among teenagers. (Leggitt also points out that the numbers show that in states where wine is sold in grocery stores, there is more underage drinking.)
LEADD claimed a whole list of backers, including several district attorneys and a number of law enforcement unions across the state.
Gordy Warnock, LEADD's spokesman, is also vice president at Fleishman-Hillard Public Relations, which owns Mercury Public Affairs. Prior to that, he was vice president and legislative director with the union that represents New York State police officers. Before that, he was a state trooper.
One of the other prominent names in the law enforcement group was Daniel Sisto, vice president and legislative director of the troopers' union, where Warnock once worked.
Sisto says that LEADD was not formed specifically to block the wine bill and that Mercury did not come to him and ask him to form it. Actually, he says, he asked Mercury to get involved.
"We had been discussing how to make it more accessible for law enforcement to weigh in on issues that would further enforcement, and we decided to get together and become a cohesive group," Sisto says. "This issue just happened to be a jumping-off point."
In other words, Sisto is saying that LEADD wasn't merely created by the liquor lobby to give a law enforcement gloss to its efforts, and will not be dismantled when the wine bill goes away. If that's true, however, why hasn't LEADD taken positions on any other issues?
"We're in the process of trying to expand education programs and public service," Sisto says. "Unfortunately, LEADD is not my only position."
Records from the New York State Public Integrity Commission indicate that LEADD has never filed any papers as a lobbyist.
The two groups had close ties beyond the Mercury connection: LEADD posted press statements on the Last Store website. A Facebook page for LEADD lists Leggitt, the Last Store spokeswoman, as "creator."
Another member of the anti-supermarket group was lobbyist Brian Meara, who has represented a long list of well-known businesses and organizations, including the Yankees, Verizon, Philip Morris, Donald Trump, and several big real estate developers. Meara, when he's mentioned in news stories, is almost always identified as a longtime friend of Speaker Sheldon Silver. And he is also referred to as a longtime liquor store lobbyist.
In other words, the sudden "grassroots" movement that had sprung up against the wine bill was anything but.
It was actually made up of two professional organizations employing longtime lobbyists with multiple connections to each other. And their work was just beginning.
By March, the state's Sheriffs' Association was complaining about being included on LEADD's list of supporters. The association had actually decided to stay neutral in the debate over the bill. "While there are many sound arguments advanced by both sides, they seem to be more related to political, practical, and financial policy concerns than specifically related to law enforcement concerns," the association's executive director, Peter Kehoe, noted on March 12. Subsequently, the group was removed from LEADD's list of backers.
Other law enforcement officials who also appeared on the LEADD list of supporters admit to the Voice that they had no idea the liquor lobby was underwriting the group's efforts.
Sisto, however, insists that the organizations were contacted and had consented to allow their name to be used. "For everyone on the list, myself or someone with the group spoke to someone in their union," he says. "I don't know what their individual vetting process is."
The Suffolk PBA was listed as a LEADD supporter, for example, but the association's Fred Sayles says that the union, in fact, had no position on the wine bill. Sayles agreed on his own to attend a press conference in the Long Island town of Patchogue in opposition to the measure. But he says he was not aware that the liquor store lobby backed the group.
Likewise, Brooklyn District Attorney Charles Hynes lent his name to the group. Citing the problem of underage drinking, Hynes wrote on March 19, "I am unalterably opposed to this legislation." But Hynes, his spokesman, Jerry Schmetterer, says, was not aware that the liquor store lobby backed LEADD.
"He wasn't aware of the strong lobbying effort," Schmetterer adds. "His opposition was based on concern over easier access to alcohol. We do a lot here in Brooklyn around drunk driving issues."
If this were a drunk driving issue, however, wouldn't MADD be all over it?
In fact, Mothers Against Drunk Driving has never weighed in on whether wine should be sold in supermarkets. That's because, according to MADD spokeswoman Misty Moyse, the group doesn't believe that controlling where alcohol is sold is a core priority in combating drunk driving.
"While we feel and understand that economic times are tough, we would want to see increased anti–drunk driving efforts, regardless of where wine, beer, and spirits are sold," she says. "We're going to continue to advocate for those things we know will stop drunk driving."
Moyse says the group has long wanted New York State to require ignition locks for convicted drunk drivers as a term of probation, and has advocated for more sobriety checks. "These are the kinds of things that save lives and prevent injuries," she says.
If it wasn't too surprising that the liquor store lobby had used pros in what it was calling a "grassroots" effort, and had even persuaded some law enforcement groups to go along, what did seem astounding was that some wineries had also been persuaded to join the effort.
If there was any group that would benefit from opening grocery stores to wine, it was the wine makers themselves.
The Last Store on Main Street boasted that some 80 wineries in the state opposed the sale of wine in supermarkets. Notably, they claimed, most of Long Island's wineries opposed the idea.
Last Store spokeswoman Leggitt pointed out that New York's grocery stores wouldn't be stocking local wine anyway: "Coming from the small independent-business side, wineries want to keep us out of it for the sake of their fellow members in the wine industry," she says.
Some wineries did back the bill, however, and say they paid a price for it—in the form of intimidation from the liquor store lobby. (Leggitt says the Last Store group had no involvement in, and did not condone, such intimidation.)
On February 4, Scott Osborn, president of Fox Run Vineyards in Penn Yan, wrote to Governor Paterson and Attorney General Andrew Cuomo, complaining that because he testified in favor of the wine bill, he had been targeted by "a coordinated campaign of intimidation and retaliation" by the liquor lobby.
Osborn says he had been uneasy about testifying because "the liquor store lobby had made it explicitly clear that my support of this change would result in my being added to the liquor stores' 'enemies' list, and that my product would be removed from the shelves."
Osborn claims he received three phone calls the day after he testified from liquor store owners vowing to pull his wines off their shelves. He says he got about 30 e-mails, most of which threatened to pull his wines from their shelves.
Osborn demanded an investigation into his complaint. "There should be no doubt that this is a coordinated effort on behalf of the liquor lobby to damage a well-respected New York State business and put a damper on free speech," Osborn wrote.
In an interview with the Voice, Osborn declined to identify the people who threatened him, saying all of that information had been given to Cuomo's office. "I had some conversations with people associated with liquor stores who said I should be very careful," he says.
Indeed, Osborn did see a decline in his business in the first month after he testified. "I think many of [the wineries] were intimidated into it, and some of them just don't see the big picture that grocery stores would actually carry their wines, and, as far as I know, most of them never talked to a grocery store," he says. "For me, it's a no-brainer. Instead of 2,700 outlets, you get 19,000 outlets."
John Martini, co-owner of the Anthony Road Wine Co., also in Penn Yan, says he received similar treatment. "We had some of it direct from stores and some secondhand," he says. "And we have seen our wines no longer being carried, or placed on the bottom shelf or in the back."
Martini estimates that this backlash from liquor stores has cut sales for the year by about 460 cases through April, and cost him about $60,000 in business: "That's a big chunk for us," he says. "We got threats, and the threats were carried out."
Like Osborn, Martini also complained to the Attorney General's office. He finds it odd that so many wineries would oppose a bill that would expand their market: "A rising tide floats all boats," he says. "If wine is more easily available, consumers will increase consumption. People lose sight of the fact that grape growers are also mom-and-pop businesses."
According to a Last Store press release, however, Long Island wineries were unanimous in their opposition to the wine bill: "L.I. Wineries Speak in One Voice: No Wine in Grocery Stores."
But Long Island wineries, too, were targeted, says Joseph Gergela, head of the Farm Bureau, an organization that advocates for farmers: "A number of wineries were called and asked not only to stay neutral, but also to oppose it," he says. "Certainly, intimidation played a major role. I got numerous phone calls from wineries about it."
For their part, the supermarkets were banking on the lure of increased tax money to the state. In a time of budget catastrophe, they figured that no legislator in his or her right mind would turn away from a projected $160 million in state revenues. And, they argued, it was a good thing for the consumer to get his food and wine in the same place.
The supermarkets say they never tried to appear as anything other than what they were. "We are transparently a business organization that is making an economic argument on the merits," says David Vermillion, the spokesman for the supermarkets lobby, who works for Edelman Communications, a big PR firm. "We're not trying to be anything else. We didn't, for example, go out and find data on how many drunk drivers bought their alcohol at a liquor store."
New York supermarket mogul John Catsimatidis downplayed the notion that the wine bill would be a sizable boon to his business: "For me, as a supermarket owner, it's one more product on my shelves," he tells the Voice. "We weren't going to carry the fancy wines. Just table wines and New York State wines. We thought it would add probably $2 million a year. We do close to $300 million, so it wasn't a significant number. It's more of a convenience to our customers."
Catsimatidis thought some of the arguments made by the opponents of the bill were ridiculous—especially the notion that it would foster more teenage alcoholism and more drunk driving. "Teens are drinking beer, if anything," he says. "They aren't stopping in for a bottle of wine. The drunk driving claim is a joke."
He points out that 35 states already allow wine sale in supermarkets. "The fact is that there are fewer and fewer liquor stores each year," he says. "So, you're going to make it an inconvenience to the customer? The supermarket industry is willing to compromise. . . . But the liquor lobby has a chokehold on the people of the legislature, costing jobs and taxpayers."
The dispute climaxed in budget talks between Assembly Speaker Silver and Governor Paterson.
Paterson went into the negotiations with a sheaf of facts to back up his support of the bill. Albany insiders say, however, that as the talks wound to a close, Silver simply refused to discuss the measure.
The opponents of the bill took their victory lap. "At the end of the day, the strength of our grassroots campaign overcame the multimillion-dollar PR lobbying blitz of grocery stores," declared McKeon, a spokesman for the Last Store group.
"We applaud Speaker Silver, Majority Leader Smith, and their members for putting public safety first by rejecting this dangerous plan," said Warnock, the spokesman for LEADD.
But in Albany, no idea is truly dead. Last month, Assemblyman Joe Morelle of Monroe County proposed a new "compromise" measure, which, he said, would allow liquor stores to sell a wider range of items, expand to up to five locations, and form collectives from which to bargain with suppliers.
"I see this as a win-win for everyone," Morelle said at the time.
The liquor stores said they would oppose any measure that puts wine in grocery stores.
Then, Albany fell into chaos from the power struggle over control of the Senate. Everything stopped. When they got started again, the Morelle bill was still on the sidelines.
In the weeks after Silver killed the proposal, the Last Store group weighed in on a similar dispute in Tennessee, praising the legislature in that state for rejecting a "job-killing plan" put forward by "greedy grocers" that "would cost jobs, harm teens."
Stefan Kalogridis of the New York State Liquor Store Association once again used his favorite biblical analogy: "Cynics in the media tell us all the time that the only thing that matters in politics is money, but these legislatures just proved that the power of the people matters the most. This was David versus Goliath, and David won."
Sure—if by "David," you mean lobbyists posing as grassroots organizers.
On 14th Street, Trader Joe's wines are kept in a separate storefront, for no good reason at all.
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