SALT LAKE CITY -- Gov. Gary Herbert said Thursday that Utah's liquor agency could be folded into the state Commerce Department or placed under direct supervision of the governor after an audit revealed years of bid rigging and mismanagement.
The lack of oversight from the director and appointed board members led to the ethical problems at the Department of Alcoholic Beverage Control, Herbert said.
"This is what happens when there is no accountability," Herbert said during the taping of his monthly news conference on a Salt Lake City public broadcasting television station.
Changes will likely be made by lawmakers during their 2012 legislative session, which begins in late January. But it will be a "collaborative effort and I will be at the table," Herbert said.
There will also likely be changes to the current five-member, part-time liquor board, Herbert said. Those could range from making the board more of an advisory council to making members full-time and giving them the ability to manage the day-to-day operations.
Herbert said the DABC problems were not connected to the influence on alcohol policy of lawmakers or liquor board members who don't drink alcohol, and the changes will have almost no impact on the state's liquor laws.
Legislative auditors said in a report last week that DABC employees have been manipulating bids for more than two decades and splitting contracts to skirt state procurement rules.
The audit was ordered by Herbert in August, after it was discovered that the DABC had paid more than $270,000 to Flexpak, a company owned by the son of former executive director Dennis Kellen. The contracts for shrink wrap, tape and other maintenance supplies began in 2003, and were structured in a way that skirted the state's bidding rules.
Kellen resigned from his post in August after Herbert learned of the contracts. Kellen disclosed the conflict during his time as director and has said he wasn't involved in any discussions or decisions about the contracts.
His son, Brian Kellen, has maintained the contracts were legal, state procurement rules were followed and the prices were the lowest possible.
Josh Loftin can be reached at http://twitter.com/joshloftin