ALE threatened to haul Whitewater Center CEO to jail
Alcohol enforcement agents get aggressive in busting brewery-sponsored 6K trail race; seize sponsorship agreements, steel cup
This article first appeared in the Dec. 4, 2019, edition of The Charlotte Ledger, a morning e-newsletter on local business news. Sign up for free here.
The U.S. National Whitewater Center has agreed to pay $3,000 to settle a case brought by the N.C. Alcoholic Beverage Control commission, after the center coordinated a trail race with a well-known local brewery.
At one point in the investigation, Alcohol Law Enforcement agents showed up at the Whitewater Center’s offices asking for a sponsorship agreement between the center and NoDa Brewing Co., which underwrote last year’s “Brew Dash 6K.” When the Whitewater Center’s CEO, Jeff Wise, said he needed to see a subpoena and call his lawyers, the ALE agent replied, “No. You can get us a copy of the sponsorship agreement, or we can go to jail,” according to the investigative report obtained by the Ledger.
The Whitewater Center was one of 10 Charlotte companies that settled alcohol-related charges with the ABC Commission in November. Some of the violations provide a window into the intricacies of the state’s alcohol laws, many of which were put in place after Prohibition to make booze easier to regulate and tax. Some of them frankly seem a little out of place in 2019.
Acting on an anonymous tip: In the Whitewater Center’s case, ALE agents started investigating after receiving an anonymous tip that NoDa Brewing was sponsoring the June 16, 2018, Brew Dash 6K, which was part of the “Whitewater Race Series.” Under N.C. law, alcohol producers like breweries are not supposed to have financial ties to establishments that sell alcohol without the approval of the ABC Commission.
The full seven-page investigative report is available on the Ledger’s website. It is one of the more interesting things you might read today. In excruciating detail that reads like an old episode of “Dragnet,” it recounts the movements of two ALE agents hot on the trail of an illicit conspiracy to promote and hold a trail race at the Whitewater Center. It details how agents learned that the race’s packet pick-up was at NoDa Brewing and how they discovered that T-shirts had been printed with the Whitewater and NoDa Brewing logos. (Agents unearthed those details using the internet).
It recounts how agents confronted NoDa Brewing’s Suzie Ford, who turned over the sponsorship agreement and answered their questions:
While I reviewed the contract, Ford said, “If that’s a violation, [referring to the cooperative advertising on the t-shirts] then this will be a violation too.” Ford returned with a Klean Kanteen steel pint cup with the stylized “W” logo, “WHITEWATER race series,” “Proudly Hydrated By,” and the NODA BREWING COMPANY’S logo on the cup. I informed Ford the cup was also a cooperative advertising violation.
But Wise, the Whitewater Center CEO, comes off as less cooperative at a meeting in the Whitewater Center’s conference room:
I told Wise, “I need to get a copy of the sponsorship agreement between you all and NODA BREWING COMPANY.” …
Wise replied stating I would need to supply him with a subpoena and he needed to get his attorneys involved.
I replied, “No. You can get us a copy of the sponsorship agreement, or we can go to jail.”
Wise asked me, “Under what authority?”
I replied, “18B-502.” I retrieved my ALE issued state cell phone … and handed Wise my ALE issued state cell phone so he could read the statute. …
After reading the statute, Wise made comments indicating what I was doing constituted an illegal search.
Yet Wise handed over the sponsorship agreements, plus agreements with six other breweries.
The Whitewater Center said it is unable to comment on the matter because it is a legal issue.
An ALE spokeswoman told the Ledger in an email: “The relationship between the two permittees is prohibited. … While the rules and regulations may seem technical, they are in place to prevent monopolies between suppliers and permittees.”
Must comply: Asked if the agent acted appropriately by threatening to take Wise to jail, she said ALE likes to have a positive working relationship with businesses but that “it is a criminal offense for a permittee (or their agent) to prevent ALE from conducting an inspection. While most law enforcement officers must obtain a search warrant or subpoena to view these documents, as Mr. Wise indicated, ALE special agents operate under jurisdiction stated in 18B-502. Much like a police officer asking for a driver’s license and registration during a traffic stop, drivers are expected to comply; if they don’t, there are criminal repercussions. Similarly, ALE special agents have the tools to take more serious action — physical arrest — for noncompliance.”
There’s no record of NoDa Brewing being cited. The Whitewater Center paid $3,000 to avoid having its ABC permit suspended for 30 days. It was charged with two counts of “cooperative advertising between an industry member and a retailer.”
Observation: Companies who deal regularly with alcohol law enforcement tend to consider agents to be overly zealous in enforcing antiquated laws. But they don’t say that publicly for fear of drawing further scrutiny.
Bonus anecdote: If you think this incident is humorous, check out the full record of the investigation into Unknown Brewing Co. from May of this year. It agreed to pay $2,000 to settle charges of selling cans of “Elevator Lady” beers that had the likeness of Labor Commissioner Cherie Berry, even though the label had been rejected by the ABC Commission:
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