From congressional bootleggers to Beltway booze bans

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Fans of the HBO drama Boardwalk Empire will no doubt recall the series’ many Prohibition-era scenes featuring high-level politicians rubbing elbows with bootleggers and openly imbibing in private, even as they assailed the purported societal dangers of the “devil’s brew” in public. One needn’t look further than the story of George Cassiday for a glimpse into one of the many historic precedents that inspired such vignettes.

Cassiday was a World War I veteran who, upon returning home from Europe, found bootlegging to be a sufficiently lucrative means of making a living. He found an especially promising market in selling his contraband liquor to members of Congress, many of whom were vocal proponents of the very same Prohibition that necessitated his nefarious actions.

Cassiday, famous for the green felt hat he frequently donned, turned his first congressional bootlegging transaction – a sale to two representatives who were Prohibition advocates – into a booming business that ultimately saw “the man in the green hat” gain nearly unfettered access to Capitol Hill, freely operating out of Cannon House Office Building.

Unfortunately, after operating openly for half a decade, Cassiday’s thriving enterprise came to a crashing halt in 1925, when he was briefly taken into police custody. The arrest forced Cassiday to uproot and move his entire operation…all the way to the other side of the U.S. Capitol building, where he proceeded to operate unmolested for another five years in the Russell Senate Office Building.

After a decade of fulfilling Congress’ booze needs, Cassiday vowed to stop bootlegging after another arrest in 1930. He reflected on his experience in a half-dozen front-page pieces for The Washington Post, but stopped just shy of naming names, a fact that may or may not be related to his never spending a night behind bars, despite an 18-month prison sentence (he was allowed to sign out in the evenings, return home, then sign back in the next morning).

Today, Cassiday’s story is looked back upon with some level of self-aware bemusement – the U.S. Senate’s official website even has a page dedicated to his exploits. New Columbia Distillers, which was D.C.’s first new distillery since Prohibition when it opened in 2012, calls its flagship product Green Hat Gin in tribute to Cassiday.

But even as the Prohibition-era furor has worn off, much of the underlying hypocrisy persists in the greater D.C. metropolitan region. Nonsensical liquor laws remain on the books in each of the three component jurisdictions that comprise metropolitan D.C. area: Maryland, Virginia and the district itself.

Consider Montgomery County, Maryland, the most populous county in the state, primarily as a result of the throngs of residents who appreciate its proximity to D.C. and more affordable housing options. The county requires both individuals and businesses alike to purchase all liquor through its Department of Liquor Control (DLC), the charmingly named organization that also serves as the lone wholesaler of liquor, wine and beer in the county. The Montgomery County DLC recently boasted about its 85 percent delivery-success rate. As R Street’s Kevin Kosar rightly notes, “No private company in a competitive market could cock-up 15 percent (about one out of every six or seven) of its deliveries and stay in business long.”

Or consider Virginia, where ordering alcohol online and having it shipped to one’s house remains illegal. Moreover, all liquor sales in the commonwealth are handled by a state-run Alcoholic Beverage Control department, which uses its monopoly power to mark up “distilled spirits by an incredible 69 percent, before applying a 20 percent excise tax, not to mention the additional general state sales tax of around 5 percent.” And that’s to say nothing of Virginia’s egregious and paternalistic food-beverage ratio, which requires that restaurants “make $45 in food sales for every $55 they make selling liquor-based drinks,” a requirement that has proven understandably problematic for high-end cocktail bars and similar establishments.

To be fair, the District of Columbia itself is comparably less terrible. The city has made some notable strides in recent years, updating many of its own Prohibition-inspired laws. Of course, that’s often happened only because of those few brave small-business owners who were willing to take the initial hit and fight against numerous outdated regulations in order merely to operate in a reasonable manner. The city’s Alcoholic Beverage Regulation Administration still lists 17 different types of liquor-related licenses. Do you want to open a brewery? You’ll need a Class B license. Do you want to give samples of beer to customers at your new brewery? You’ll need a separate tasting permit. Are you going to sell beer at the brewery? That’ll require yet another application for the on-site sales and consumption permit. And these are just a few examples of the hurdles prospective brewers and distillers face.

It has only been in the last couple of years that the glut of new breweries and distilleries popping up in the city have been allowed to sell alcohol on Sundays, for example, or to allow distilleries to sell cocktails containing the same spirits they make on-site. And, as noted by the Washington City Paper, the city’s laws are still plenty convoluted:

One of the quirks of the consumption permit is that it requires at least half of the spirits in distillers’ cocktails to be produced on premise. So, for example, New Columbia Distillers, which currently produces only gin, can make a gin and tonic, because the majority spirit would be Green Hat Gin. However, it can’t serve a Negroni because vermouth and Campari make up two-thirds of the alcoholic content. They also can’t serve beer and wine.

The makers of Green Hat Gin, much like the beverage’s interminable namesake, will probably be just fine. But as states and localities, incredibly, continue to wrestle with the now 83-year-old legacy of Prohibition, they would do well to look to the nation’s capital – and to the story of the Man in the Green Hat – for examples of regulatory pitfalls to avoid as they pursue a modern, sane, consumer-friendly market for alcoholic beverages.

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