Ehrlich on Washington column, June 21, 1999

MEWS FROM Robert L. Ehrlich, Jr. Second Congressional District of Maryland 1407 York Road, Suite 304 Lutherville, Maryland 21093 315 Cannon House Office Building Washington, D.C. 20515 EHRLICH ON WASHINGTON Week of June 21, 1999 By Congressman Robert L. Ehrlich, Jr. CYBER-BOOTLEGGING: BREAKING THE LAW ON-LINE Many folks probably have not heard the term, “cyber-bootlegging”; however, most of us remember hearing stories about bootlegging during Prohibition. It may come as a surprise to some that this illegal activity continues today. The Internet has emerged as a powerful sales tool for bootleggers. Many sellers of alcohol beverages are avoiding long-standing state licensing and tax requirements thanks to the relative anonymity of Internet commerce. Moreover, they are unable to properly police buyers of their products. After all, retailers claim it is impractical to check someone’s identification when that person is sitting in front of a computer or on the telephone hundreds of miles away. As a result, wholesalers and retailers lose business, state governments lose between $200 and $600 million in tax revenues each year, and minors have access to alcohol beverages sent directly to their doorsteps. States have authority to regulate the sale, purchase, and consumption of alcohol beverages pursuant to the Twenty-First Amendment to the U.S. Constitution. While existing federal law prohibits the shipment of alcohol beverages in violation of state law, it provides no effective enforcement mechanism. For example, a sting operation conducted a short time ago by the New York State’s Attorney’s Office uncovered 12 wine and liquor distributors who delivered alcohol to minors without demanding proof of