James H. Douglas, Governor

August 22, 2003

Mr. Bruce Cunningham

301 Seneca Creek Road

Hinesburg, VT 05461

 

Dear Bruce:

This letter is in response to your correspondence dated July 21, 2003. Thank you for providing such detailed information to which I can respond.

With respect to your assertion that the Vermont Department of Liquor Control (DLC) relies on “unrealistic spinning of compliance testing results,” let me assure you that the Department’s’ test results are accurate. I would also ask you to consider that Vermont’s tobacco enforcement efforts function under certain constraints with which other states need not contend. The Vermont statute requires that the state utilize the services of seventeen-year-olds exclusively for license compliance testing, while other states exhibiting higher compliance results have the flexibility to recruit much younger teens. This flexibility provides an advantage Vermont does not enjoy. Because of this variation among state laws, Vermont’s tobacco licensees face a much tougher testing environment. Therefore, while we must strive to meet the statutory compliance rate, it is not surprising that our compliance numbers differ from those of other states.

Your statement that the “DLC is willfully failing to take effective enforcement action…which could easily be done for about $61,000 by a reliable and experience contractor” raises an interesting point. DLC has informed me that in 1998, when they contracted with Tom Radecki’s company to perform tobacco compliance testing, the data submitted by Mr. Racecki were proven to be misleading, submitting reports based upon compliance tests for businesses that no longer possessed tobacco licenses. When these facts came to light, DLC cancelled its agreement with Mr. Radecki based upon his company’s falsifying data. I currently have confidence in DLC’s enforcement capabilities, and ask you to consider that Vermont law does not allow independent contractors the authority to issue citations for sales to minors or be involved in the administrative penalties for licensees.

In your assessment that the DLC’s education program has produced unsatisfactory results, please consider the statistics reported in the “Report to the General Assembly on Tobacco Compliance Tests During Calendar Year 2002.” Under the section labeled “Effectiveness of DLC Training Seminars,” statistics indicate that lecensees’ employees trained by the DLC pass compliance tests 92% of the time. Therefore, a clear correlation exists between increased training and improved compliance results. Licensees that complete DLC’s compliance education program are far less likely to fail compliance testing. You state in your letter, “it is very tempting to believe that an education program is a reasonable alternative to compliance testing…” DLC is not attempting to substitute compliance testing with education. On the contrary, DLC is mandated by statute to provide education and compliance testing for tobacco licensees. In this endeavor, DLC has ensured that both components, working hand-in-hand, can achieve the goal we all espouse – that of limitation of availability of tobacco products to underage customers. One justification for this dual strategy is that recent studies have indicated that aggressive enforcement programs alone have no impact on teenage tobacco use rates, in part due to a shift to social sources when commercial sources are less plentiful.

Finally, DLC did not disregard mandatory license suspensions as you noted in your correspondence. In fact, DLC suspended tobacco licenses for sixty-five licensees over the past four years (FY ’99 – FY ’02).

Again, Bruce, thank you for the information you have provided and for allowing me the opportunity to respond to your concerns.

Sincerely,

James H. Douglas

       Governor

 

[the following letter is my response to the governor’s letter above]

 

 

Bruce Cunningham

301 Seneca Creek Road

Hinesburg, VT     05461        

December 28, 2003

Governor Jim Douglas

Pavilion Office Building

Montpelier, VT 05620

 

Dear Governor Douglas,

Thank you for your August 22 response to my letter regarding compliance testing.

I was surprised and disappointed that you chose not to solve this problem. I think it is still your problem to solve, and I hope you will reconsider your position. In the meantime, I am pursuing other alternatives for obtaining a solution as soon as possible.

I understand that my 7/21 letter to you went to Commissioner Hogan for his consideration and response and that his response to you was used as a draft for your response to me. I believe that Mr. Hogan did not address substantial issues raised in my letter and that there were a few factual things in his arguments that I must address at this time. I hope this information will help set the record straight.

Please note that I never questioned the accuracy of the DLC data. I noted that the DLC presents the data in such a way as to suggest that they are doing a good job while the actual data reported clearly shows that the DLC is failing to comply with the law. Year after year the DLC report says “DLC complied with Act 58…” I call this “spinning” because the data in the same reports belies this claim, and violating the law can hardly be characterized as doing a good job. 

I am certainly aware that Vermont has a higher standard for compliance testing than any other state. (After all, I wrote that law that codified that standard.) I simply noted that other states are achieving results that exceed our standard at an affordable cost - and this is true even after correcting for their use of buyers 15 to 17 years old (average age only one year below our required age of 17). In fact, 90% of the buyers used in Maine’s compliance testing are 17 years old and their compliance has been above 90% for the last five years with a budget that is equivalent to about $140,000 in Vermont. The point is that there is no justification for the claim that our law is either unrealistic or unaffordable. Noting that Vermont has adopted a higher standard does not change that fact.

I think the allegation of “falsifying data” directed against Mr. Radecki’s company is very serious. I have heard this allegation before from Mr. Hoyt and Mr. Hogan, and now it is documented over your signature. I requested public documents from the DLC related to this allegation on September 23 and have received nothing yet. The only incident related to this allegation that has ever been reported was a compliance test done in good faith at a store in a municipality where a store owned by the licensee on record had burned down and the test was done at another store with the assumption that it belonged to the licensee. This was not “falsification”. It was an innocent mistake related to the DLC’s instructing Mr. Radecki’s employee to perform a test at a store that no longer existed. According to the DLC’s annual reports for the last three years, the contract with Mr. Radecki’s company was cancelled because the DLC was instructed by the legislature to obtain an FDA grant to continue testing using DLC employees. The application for this grant was signed on 9/4/98 – two months before the termination of Radecki’s contract.

I did not suggest that the DLC’s education program is not effective. I noted only that it has produced “unsatisfactory results” and it is not as cost-effective as compliance testing. My definition of “unsatisfactory” is based on the failure of the education program to achieve compliance with Act 58 even though it consumes about 85% of the tobacco funds allocated to the DLC for “enforcement”. The turnover rate for clerks selling tobacco products is approximately 60% per year. The DLC clearly does not have the resources to train every person in Vermont who sells tobacco products. The statistics you referred to (only those trained at the DLC seminars perform satisfactorily) clearly show that that is what it would take to reach compliance with Act 58 with the current level of compliance testing. Compliance testing is much more cost-effective and will assure at least 90% compliance as the law requires.

My reference to “reasonable alternative” was not meant to suggest total “substitution”. My intent was to point out the fact that the DLC is spending most of its “enforcement” allocation on the least cost-effective of the alternatives. It’s a matter of priorities and balance. It would require spending less than 50% of the enforcement dollars on compliance testing to assure at least 90% compliance even with no education program at all. This is just a matter of making sure we adequately fund the more cost-effective alternative to assure compliance with Act 58. There would still be lots of money left to support the education program that the DLC needs to do.

Your assertion about “recent studies” is incorrect. Both recent and long-term studies show that enforcement (compliance testing) that achieves less than 90% compliance has little effect on teen smoking but testing that produces more than 90% reduces the addiction rate significantly, even without an education program. That is precisely why Vermont’s law requires compliance testing to “assure at least 90% compliance”. It is true that nicotine addicts will aggressively seek other sources of cigarettes if they are unable to buy them – but compliance testing is about prevention – i.e. affecting the behavior of youth who are not addicts yet and who are discouraged from becoming addicted if purchasing is difficult enough. Compliance testing is effective as a prevention program – but not as a cessation program.

The 2003 YRBS shows a significant increase in smoking for 12th graders while smoking for every other grade decreased. Maine’s YRBS does not show this same problem. Our consistent failure to achieve at least 90% compliance for 12th graders has denied those 17-year-olds the level of protection that Act 58 requires and the Vermont youth addiction rate is now one addict per day higher than it would have been if the DLC had consistently complied with the law.

Please instruct the Liquor Control Board and the Commissioner of the DLC to comply with Act 58 forthwith.

Thank you.

Sincerely,

Bruce Cunningham