Gov. Jay Inslee is defending his nomination of embattled Liquor and Cannabis (LCB) Board Member Russell Hauge, writing in a letter to state lawmakers that Hauge deserves another four years because he “provides a valuable perspective” to the state’s primary pot regulator.
Inslee’s defense of Hauge comes after a group of 10 lawmakers called for Hauge’s removal last month. The group of bipartisan state senators and representatives said that Hauge was part of a “toxic culture” at the LCB where the agency “unevenly, inconsistently and unfairly” enforces rules against pot business owners. “Rejection of the toxic culture at LCB should start with not reappointing Mr. Hauge,” the lawmakers wrote in their letter.
The lawmakers also said that Hauge was “either ignorant of facts, or purposely did not tell the truth” during a legislative committee hearing in late January on a new bill that would make the LCB’s rules less punitive towards cannabis businesses. During that hearing, one lawmaker told Hauge, who was a prosecuting attorney in Kitsap County before taking a job at the LCB in 2015, that he needed to change his tone to be less combative.
Rep. Kristine Reeves, a Democrat from Federal Way that signed the letter calling for Hauge’s removal, said she was not surprised to see Inslee maintain his support for Hauge.
“I definitely stand by the fact that [Hauge] contributes to the culture at the LCB that has become a gotcha mentality rather than one of a partnership, but I think the governor has every right to choose who he believes best supports his values. At the end of the day that is his prerogative,” Reeves said.
The Senate has yet to approve Hague's new term to the LCB. His nomination bill has been sitting in the Senate’s Labor & Commerce Committee since Feb. 1. The nomination of the LCB’s other two board members, Jane E. Rushford and Ollie Garrett, have passed the Labor & Commerce Committee and are currently sitting in the Senate's Rules Committee.
Sen. Guy Palumbo, a Democrat from Maltby who also signed the letter, said that a proposed bill that would reduce penalties for violating the LCB’s rules is more crucial to reforming the LCB than whether or not Hauge is confirmed.
“I think ultimately it’s not about Russ Hauge it’s about the culture of the LCB and that’s why we need the compliance bill. We have to move to a compliance mindset and not a law enforcement mindset,” Palumbo said.
This so-called ‘compliance bill’ would force the LCB to create a system where written warnings can be given when violations have “no relationship to public safety.” The bill would also force the LCB to create a new program where licensees can request compliance assistance without fear of being punished for violations. The bill passed the House of Representatives Committee on Commerce & Gaming and the Appropriations Committee but has not yet passed a full vote in the House.
Hauge has argued against the compliance bill, including during a committee meeting in January where he said some aspects of the proposed bill would “not help the system but choke the system.” Hauge's testimony during the hearing turned tense and at one point, one of the lawmakers told Hauge that he needed to change his tone because the lawmakers were “not the defense counsel at one of your criminal trials.”
Rick Garza, the executive director of the LCB, told me last week that he disagreed with the "toxic culture" characterization of the LCB, but he said the agency was hiring a consultant to evaluate their enforcement culture. Reeves said she was encouraged to hear that the review would take place.
Palumbo said the state needed to shift its approach towards the pot industry now that over five years have passed since the state’s groundbreaking legal market opened.
“The first couple of years were important, we had to get this thing off the ground and it was very hard to figure out," Palumbo said. "We did a lot of good work and we had to worry about the feds. But now that it’s maturing as a market we have to move away from that mindset of law enforcement, shut people down, gotcha kind of tactics.”
Correction: An earlier version of this story incorrectly stated that Russell Hauge's nomination had passed to the Senate Rules Committee, that was his nomination as Chair of the Sentencing Guidelines Commission, not his nomination to the LCB.