Cherokee ABC board claims their generous salary is warranted

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Cherokee ABC board claims their generous salary is warranted

The high salaries collected by the five members of the Alcoholic Beverage and Control Commission for the Eastern Band of Cherokee Indians have drawn criticism from some enrolled members. The ABC commission in Cherokee makes more than 10 times what members of ABC boards in neighboring communities make.

The five-members of the tribal ABC commission earn about $25,000 annually, said Collette Coggins, chair of the commission.

Meanwhile, those serving on ABC boards elsewhere in North Carolina are capped at no more than $1,800 a year in compensation unless it’s OK’d by local government leaders.

Critics of the ABC commission said its salaries are simply too high given the budget cuts that other tribal operations have seen and the fact that everyday enrolled members are not reaping the benefits that supporters of alcohol sales previously promised.

“I believe if the ABC Board is really earning that kind of money, then that means something is very wrong,” said Jeremy Wilson, an enrolled member of the Eastern Band, in an email.

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But, Coggins said there is a good reason why Cherokee’s ABC board makes more than their counterparts in neighboring communities. Simply put, they do a lot more.

They don’t act merely as a local ABC board, but since Cherokee has sovereign nation status with their own government, the responsibilities are tantamount with that of a state-level ABC commission.

”We are actually the ABC commission and the ABC board. Plus, we act as the retail seller and wholesaler for the tribe,” Coggins said. “We kind of do it all.”

Coggins estimated that she spends 40 to 60 hours a week doing ABC commission-related business — akin to a full-time job.

So what exactly are their responsibilities? The ABC commission regulates all alcohol sales on the reservation and issues its own alcohol permits.

However, alcohol sales are only allowed on casino property in Cherokee, so exactly what permits are being issued on a regular basis isn’t clear.

There is no retail liquor store in Cherokee. The ABC commission fills bulk liquor orders placed by Harrah’s Casino and its onsite restaurants. But, the ABC commission has 1.5 employees to help manage the operation.

Still, Coggins said they have a big workload.

“I feel like we are way underpaid for the job that we have done and we’re doing,” Coggins said.

The ABC commission arguably had a lot more work when it first formed two years ago. Cherokee was entirely dry — even the casino — until 2010. Tribal members voted to allow alcohol at the casino only, which in turn necessitated the creation of an ABC operation from the ground up.

Cherokee essentially chose to act as its own liquor wholesaler, allowing it to keep a greater share of the profits and taxes off liquor sales than if it went through the existing state distribution chain. But, it required a lot of political and technical footwork to make it happen.

“That was a major accomplishment, but it took a lot of time with a lot of work and research,” said Bob Blankenship, the former ABC commission chair.

The tribal ABC commission does much more than other local boards, Blankenship agreed.

“Our board is not like the local boards. They have complete control,” Blankenship said. “They’ve got major functions.”

All about the money

Despite the former and current chairs’ insistence that the board performs many critical functions, some enrolled members of the Eastern Band complain that the commission members earn too much — particularly when other tribal operations have faced budget cuts.

“Tribal programs are having their budgets slashed in half, education is cutting back on its funding,” Wilson said.

Teresa McCoy, also an enrolled member and a former member of the tribal council, echoed Wilson’s sentiment about money going to the ABC commission while other areas are struggling.

“My concern is the overall effect that it has on tribal budgets,” McCoy said, adding that tribal leaders should have more oversight of the ABC commission’s budget.

However, according to Coggins, the ABC commission is self-sufficient now. The Eastern Band gave the commission $50,000 to cover start-up costs, but the ABC commission has since paid them back, and then some, Coggins said. The commission’s salaries also come out of the alcohol proceeds.

The ABC commission gives the tribe $40,000 a year and pays another $60,000 to cover its required Alcohol Law Enforcement operations, according to Coggins. The tribe does not allocate money to the commission, she said.

“It’s not costing them anything unless they are up at the casino drinking,” Coggins said.

However, if the commission members made less, more money would go to tribe coffers. The tribe gets surplus profits from the ABC operation, so the more the ABC board takes in salaries, the less is remitted to the tribe. The ABC commission’s collective salaries are $125,000 a year.

Although Wilson does not fully agree with some who think the tribe should do away with alcohol completely, he said people would be less vocal if the promise of alcohol had been fulfilled. Back in 2009, the tribe approved the sale of alcohol in the casino, thinking it would increase the amount of money each enrolled member receives biannually, known as per capita checks.

However, enrolled members saw their per capita check decline during the recession.

“We were originally promised that our per capita would increase much greater, and that revenue would almost double with the sale of alcohol. None of that has happened,” Wilson said.

Numbers have picked up in the past 18 months, however, and it’s hard to say whether the declines would have been even greater during the recession if it hadn’t been for alcohol offsetting the drop in profits. But, the check amounts are still below pre-recession numbers — something the tribe hopes to change with the addition of blackjack, roulette and other live table games to its repertoire.

“Now that we have live table games, that may change, but only time (and proper planning) will tell,” Wilson said.

If per capita checks had gone up, criticism of the ABC commission might be less prevalent, Wilson said.

“If the board weren’t receiving a paycheck, then most likely people wouldn’t talk,” Wilson said. “And if they did make this kind of money, and the per-capita checks did double as a result of alcohol sales, then again, people most likely wouldn’t talk, simply because their wants and needs are being met.”

Coggins, who was appointed as chair of the commission by tribal council in January, said she only began hearing criticism from people as of late. Coggins said she was surprised to hear that people do not think she and the other board members are doing a good job.

Not one person has called or walked into the office to see what the commission does, she said, adding that none of their critics have attended one of its public meetings, which the commission holds every other Monday.

“It is kind of funny to me that we have all this criticism from people,” Coggins said. “We have not had one soul show up.”

Although at least one enrolled member has asked tribal council to remove Coggins and her fellow commission members from the ABC commission, Coggins is not overly concerned about quelling the attacks.

“No matter what you do you’re never going to make them happy,” she said.

State lawmakers reined in excessive ABC salaries

State law caps the compensation of local ABC boards at $150 a meeting. The statute doesn’t apply in Cherokee, however, where the ABC members get $25,000 a year.

The North Carolina General Assembly passed a law limiting ABC board salaries in 2010 after several instances of corruption on boards across the state.

One of the first incidents to draw attention was in Mecklenburg County, where the ABC board managed to rack up a $12,000 dinner bill — on the alcohol taxpayer’s tab.

Around the same time, it came to light that the manager of the New Hanover County ABC Store earned in excess of $200,000 a year. The man’s salary had been rubberstamped by the local ABC board, and the board allowed the manager to hire his son, who also received sizeable compensation.

The new legislation passed in 2010 increased transparency and accountability to local and state leaders. State lawmakers limited income for board members and required that ABC boards report their own salaries as well as the salaries of their top five employees. They also must follow open meeting laws and hold public hearings on the annual budgets.