AG seeks deal with D.C. police lodge over allegedly illegal whiskey sales

This newest development in the investigation of the “Jack Daniel’s Fundraising Committee” — the name for the group at Fraternal Order of Police Lodge 1 which orchestrated the online whiskey sales — comes two months after two lodge officers who first reported allegations of wrongdoing were ousted by the national FOP board. The officers insisted they were ousted for raising alarms about the whiskey sales, though a lawyer for the national FOP board said their dismissals had nothing to do with that.

The newly installed president of FOP Lodge 1, Ronald Burgeson, an active-duty D.C. police officer, said the organization’s lawyer is reviewing the attorney general’s settlement offer — which would require leaders over the next decade to follow liquor laws, implement stricter controls over expenditures and increase accountability and training in running a nonprofit.

The proposed agreement, from the attorney general’s Antitrust and Nonprofit Enforcement Section, seeks “voluntary compliance” in lieu of resolving “allegedly unlawful conduct in court.” The letter does not specify whether the office was considering pursuing a criminal or civil case. A spokesman for the attorney general’s office declined to comment.

Burgeson, who had been vice president before being elevated, said he wants to put the “Jack Daniel’s Committee” in the past. “One hundred percent we want to move forward,” he said. “It’s about healing and starting to build the lodge back.”

FOP Lodge 1 comprises thousands of active and retired members from all the city’s major local and federal law enforcement agencies. It does not handle labor contracts and bargaining, which are the purview of unions and labor committees for individual departments.

Instead, the lodge offers services such as legal-defense plans and social events, and runs a clubhouse with a bar and food one block from Washington’s FBI field office near Judiciary Square. The lodge has a license that allows it to sell liquor, but only by the drink at the clubhouse.

In 2017, a lodge member, Michael Kruggel, came up with a plan to rescue the then-financially-troubled organization by buying Jack Daniel’s by the barrel, having the whiskey poured into bottles engraved with pro-police slogans, and selling them at conventions and over the internet. He became chair of what became known as the “Jack Daniel’s Fundraising Committee,” which lodge officers approved despite some questions about legality.

The rise and fall of the Jack Daniel’s committee: How D.C.’s police lodge made thousands selling whiskey online

Through the liquor sales, the D.C. lodge raised hundreds of thousands of dollars, though nearly all of it was used to pay the committee’s own expenses, which included buying whiskey and shipping it, along with Kruggel’s travel and hotel bills, according to an internal audit conducted by a retired police detective hired by the lodge. That audit found that sales of more than 3,000 bottles of whiskey produced roughly $516,000 over three years. But the audit said net revenue for the lodge, after expenses were taken out, totaled $11,000.

The Washington Post reported on the fundraising effort in November 2021, and in December, the city’s alcohol control board found the lodge had violated six provisions of the D.C. law governing the importation, sale and distribution of liquor. Records show the regulator agency fined the lodge $2,000.

The lodge’s internal review found it did not have a license to sell liquor by the bottle or ship it across state lines. And the settlement proposal from the attorney general’s office says “the District’s investigation concluded that [the lodge], through the Jack Daniel’s Committee and Kruggel, illegally brought alcohol into the District of Columbia” without following several city regulations.

D.C. police said they investigated a complaint alleging financial irregularities at the lodge in October 2020 and forwarded their findings to the U.S. attorney’s office. A police spokeswoman said in a 2021 interview that prosecutors found the documentation insufficient to build a case.

Kruggel, who remains a member of the FOP lodge in D.C., disputed that the lodge did not make a significant profit from the liquor sales, and said internal reviews cleared him of any wrongdoing.

“The lodge made a whole lot more money than they alleged,” Kruggel said, noting that investigators with the attorney general’s office never contacted him, and that he was reinstated to the D.C. lodge after the board had voted to expel in him in 2021.

An attorney for Kruggel said in 2021 that his client did not have direct control over finances and that all expenditures had to be approved by a treasurer. Kruggel referred other questions Friday to an attorney, who did not immediately respond to a request for comment.

Retired D.C. police officer Gerald Neill Jr. said he shut down the liquor sales when he became president of FOP Lodge 1 in 2020, and distributed an internal investigative report on the liquor sales on an internet bulletin board monitored by thousands of lodge members.

He said that when he assumed office, the lodge was in financial distress, with cases of unsold whiskey stacked floor-to-ceiling in offices and storage rooms and little accounting. He said Friday he has no regrets about sharing the information, or that it later became public.

Neill was succeeded as president by Michael Murphy, who retired from D.C. police in 2022, but retained a position on the board. Both men said they pushed for accountability for the “Jack Daniel’s Committee,” and both were ousted by the National FOP at a meeting in Boston in April. They said they are appealing the decision.

Murphy and Neill said they believed they were expelled over their failure to turn over lodge documents to the National FOP for a hearing on whether they had acted inappropriately while investigating the Jack Daniel’s committee. Murphy said they were under subpoena by investigators with the attorney general’s office, and were advised by the lodge’s attorney that providing the documents to the national FOP could be interpreted as obstruction of justice.

The national board, Murphy said Friday, “nullified my election as president.”

But Larry James, the national FOP’s general counsel, said the decision to oust Neill and Murphy, a move he called “rare,” had nothing to do with the Jack Daniel’s Committee. He said “it was all about whether the D.C. lodge was following its bylaws and constitution,” and what he described as officers’ failures to follow directives by the national trustees.

The attorney said the issue over the whiskey sales and documents pertaining to the attorney general’s office investigation “were not relevant.”

“They had every opportunity to get their house in order,” James said of the two former officers. “They basically refused.”

D.C. police lodge broke the law by selling hundreds of whiskey bottles online, investigation finds

Murphy said he believes the future of the lodge “is in jeopardy,” adding, “There are a lot of questions where the money went. Nobody wants to hold those people accountable.”

Neill said the lodge still has leftover whiskey bottles for sale. But now, to follow the law, they can only be purchased at the lodge’s club, and must be “accompanied by one or more prepared food items,” according to the lodge’s website.

Engraved bottles that in 2017 sold for between $80 and $100 can now be bought for $65. “We sell it cheaper then we paid for it, to get rid of it,” Neill said.