Jay Miller and The Wine Academy: Report by Cozen O'Connor

April 1 0, 201 2

Jay Miller and The Wine Academy of Spain: Internal Investigation

I.              Introduction

The Wine Advocate engaged this Firm to investigate whether The Wine Advocate's standards of independence had been compromised in Spain. In particular, various Internet blogs suggested in the Fall of 2011 that Jay Miller and/or Pancho Campo and The Wine Academy of Spain accepted payment for visiting wineries and tasting wines in Spain for rating by The Wine Advocate. Our investigation focused on answering two main questions:

1.         Did Jay Miller receive anything of value to visit any wineries or taste any wines for rating by The Wine Advocate?

2.          Was there confusion between Jay Miller's tastings conducted for rating by The Wine Advocate and the "private" seminars not conducted under the auspices of The Wine Advocate for which Miller received payment? If so, why, and who was responsible for creating the confusion?

To help answer those questions, we engaged Kroll Associates to conduct numerous interviews on the ground in Spain with wineries, trade associations, government officials, and representatives of The Wine Academy of Spain. Our joint investigation included the review of substantial amounts of documents, including contracts, electronic mail communications, blog posts, invoices, financial statements, written statements by principals and wineries and trade organizations, travel records, and business records of The Wine Advocate. We even solicited input from many of the bloggers who first reported the story. 1 In addition, we conducted interviews of current and former representatives of The Wine Advocate in both the United States and in the U.K.

The joint investigation, which was conducted over a four-month period, resulted in an extraordinarily detailed report containing more than 2,000 pages of exhibits. In summary, the investigation did not reveal any evidence that Jay Miller received anything of value to visit wineries or taste wines on behalf of The Wine Advocate. Nonetheless, the investigation revealed that arrangements in Spain -whereby tastings for The Wine Advocate were allowed to occur in close proximity to paid, private events-created an appearance of impropriety that fell short of the high standards that The Wine Advocate set for itself. In light of these findings, we recommended that The Wine Advocate implement several measures to prevent even an appearance of impropriety from taking hold again.

II.            Jay Miller's Assignment in Spain

In 2009, after working with Pancho Campo ("Campo") and The Wine Academy of Spain ("TWAS") at a Wine Future event, Robert Parker asked Campo to assist Jay Miller with the logistics and translations for Miller's trips to Spain for The Wine Advocate. Miller did not speak Spanish, and Parker wanted to increase The Wine Advocate's coverage of Spanish wines. Campo agreed to help, at no charge, and thereafter assisted Miller with the organization of the logistics for his trips and guided him through various wine-producing regions of Spain. Campo was advised that all of Miller's expenses would be paid by The Wine Advocate.

Over the course of five trips to Spain, Campo and TWAS assisted Miller in arranging two species of events: (1) tastings for potential rating in The Wine Advocate, and (2) private tasting events organized and promoted by TWAS for which Miller/Campo received payment. The tastings for rating in The Wine Advocate consisted of tastings at the D.O. of a certain region, as well as additional tastings at approximately three to four wineries per day. According to Jay Miller, he typically provided a list of wineries to Campo that would fill approximately 75% of his schedule; this left a portion of his schedule (approximately 25%, by Miller's estimation; much lower by Campo's estimation) to be completed with recommendations from Campo. [The investigation confirmed that no one else at The Wine Advocate was aware of Campo's significant role in proposing wineries to visit.]

In addition to the tastings for The Wine Advocate, Miller participated in four private tasting events in 2011 organized by Campo and his staff at TWAS. These events -hosted by D.O.'s, trade groups, and wine consortiums -consisted of meetings with wine makers, press conferences, interviews, photo opportunities, and public seminars and wine tastings. The wines tasted during a private event were previously tasted and/or highly rated for The Wine Advocate. In part because of the language barrier, Campo and TWAS handled all contacts and negotiations for these events without Jay Miller's involvement or knowledge; Campo sought Miller's approval for an event only in the final stages of negotiations. For his participation in each event, Miller received approximately $8,000 - $10,000 directly from TWAS.

III.         No Evidence of Actual Impropriety

The investigation did not reveal any evidence of actual impropriety. First, the investigation did not uncover evidence that Jay Miller received anything of value for visits he made to any D.O.'s or to any wineries in Spain to conduct tastings for rating in The Wine Advocate. Numerous D.O.'s, trade associations, and wineries signed certifications stating they did not pay Miller to visit wineries to conduct tastings for The Wine Advocate. Moreover, our interviews of representatives of Spanish wineries -as well as representatives of D.O.'s, trade associations, and TWAS -did not reveal or suggest the existence of any such payments.

Second, the investigation did not reveal any evidence of payment from wineries to fund any private event from which Jay Miller received payment from TWAS. All fees for the private events were paid to TWAS by either the D.O. of the particular region where the event was conducted or private trade groups and consortiums. The investigation did not find evidence that wineries whose wines were featured at these private events contributed money to pay for the events. Specifically, with regard to the ASEVIN event in Murcia in November 2011, despite the inability to obtain sufficient information or records from ASEVIN, this investigation did not reveal any actual evidence that wineries made payments to sponsor this event. There was plainly an early attempt by ASEVIN to solicit such contributions, which was improper, but the bloggers' reports and the reactions to them in Fall 2011 caused ASEVIN quickly to retract those earlier communications and apparently reverse course. The investigation uncovered no evidence that TWAS, Miller, or any representative of The Wine Advocate knew of or was involved in any of ASEVIN's communications to its constituent wineries.

IV.         Appearance of Impropriety

Although the investigation found no evidence of actual impropriety, it did reveal that the actions (or inaction) of Jay Miller, Pancho Campo, and TWAS compromised the integrity of The Wine Advocate by creating an appearance of impropriety. Regardless whether this appearance was created unintentionally or not, the effect on The Wine Advocate is the same. Robert Parker and the staff at The Wine Advocate placed Campo -a man with myriad, legitimate commercial relationships with wineries across Spain -in a position that provided him with an opportunity to exert some control over Miller's itinerary in Spain without adequately briefing him about The Wine Advocate's strict standards safeguarding its independence.2 Furthermore, Jay Miller did not speak Spanish, and, as a result, was dependent on Campo to make all arrangements with minimal oversight from The Wine Advocate. This difficulty was exacerbated by Miller's lack of knowledge and interest regarding the details of Campo's negotiations.

 As a result, an appearance of impropriety was created in two ways. First, by Miller permitting Campo to play a significant role in selecting wineries for Miller to visit to conduct tastings for The Wine Advocate coupled with Miller's inability to monitor TWAS's negotiations to facilitate those visits, a perception (well-founded or not) could take root that Campo had some role in facilitating ratings for wines in The Wine Advocate. Second, the investigation concluded that, whether intentionally or not, Campo blurred the lines between tastings for rating in The Wine Advocate and TWAS-sponsored private events. For example, the contracts for private events negotiated by Campo and TWAS, for which the sponsor paid approximately €30,000, usually included at least one day of visits to local wineries as part of the program.3 Even though the contracts expressly stated that these visits were not related to the paid event, the close proximity of the private events to these local tastings had the potential to create an inappropriate ambiguity between the two in the public eye. Furthermore, Jay Miller was unaware of any terms of these contracts, and it was his understanding that any visit to a winery was part of an unpaid tasting for rating in The Wine Advocate. Thus, it is likely that, at some point after May 2011, Jay Miller tasted wines for The Wine Advocate (i.e., unpaid) on a visit to a winery that -unbeknownst to Miller -could have been perceived as part of a paid event.

Thus, while this investigation revealed no evidence of actual impropriety, we believe that the dynamic of Miller and Campo's collaboration in Spain -even if undertaken with the best of intentions -created an appearance of impropriety.

V.            Jay Miller's Resignation

The investigation concluded that Jay Miller's resignation from The Wine Advocate was not related to the controversy in Spain. In January 2011, Jay Miller and Robert Parker jointly agreed that 2011 would be Miller's last year with The Wine Advocate. Soon thereafter, Parker informed both David Schildknecht and Neal Martin of Miller's impending resignation and asked whether they would be interested in taking over his assigned regions. These January 2011 communications are corroborated by emails exchanged among the trio, and emails in which Messrs. Schildknecht and Martin each accepted the new assignments well in advance of Fall 2011. On November 4, 2011, Parker again emailed Schildknecht and Martin to inform them that Parker would be making the official announcement about Miller’s resignation in December 2011. The announcement was posted on the eRobertParker.com website on December 4, 2011, and Miller’s resignation became effective on January 1, 2012.

Thus, there is no merit to the suggestion that Miller's resignation was related to the allegations concerning his activities in Spain.

VI.        Recommendations

Based on our investigation, we recommended that The Wine Advocate implement the following measures:

1.       Sever relations with Pancho Campo and The Wine Academy of Spain. This step would be advisable regardless whether Campo's actions intentionally or unintentionally created an appearance of impropriety. In any event, Campo has announced publicly that he will "move on" from wine business and The Wine Academy of Spain following its recent merger with another company.

2.       Adopt a new rule regarding private events by contractors. Presently, there is no requirement that private events be approved in advance by The Wine Advocate. In the future, contractors should be required to provide The Wine Advocate details in advance about, among other things, (a) the amount of any fees charged by the contractor and any business partners, (b) the source of any fees, (c) the full schedule of the program, and (d) the list of wines to be tasted at the program (and confirmation that the wines have been previously rated in The Wine Advocate).

3.         Make revisions to The Wine Advocate's Writer Standards. The Writer Standards have not been amended since 2009. In light of recent events, we recommend certain procedural and substantive changes, including:

a.      Broader Applicability. In its current form, the specific terms of the Writer Standards apply only to Robert Parker. Contractors, on the other hand are “held to high but less stringent and demanding standards” that require them, without specific guidance, to “maintain rigid standards of independence and integrity." An amended version of the Writer Standards should make it clear -both to the public and contractors -that anyone rating wines for The Wine Advocate must conduct themselves in accordance with certain specific rules and should seek clarification of those rules, if in doubt, directly from Robert Parker.

b.          Annual Certifications. Contractors should be required to sign and submit annual certifications to The Wine Advocate in which they pledge to conduct themselves in accordance with the amended Writer's Standards. These certifications should include a pledge to seek approval of The Wine Advocate before accepting benefits for private events, publications, or business ventures.

4.       Amend Independent Contractor Agreements. Each contractor's agreement with The Wine Advocate should include provisions in which the contractor, upon penalty of termination of the parties' relationship, agrees to (a) conduct himself/herself in accordance with the Writer's Standards, and (b) seek approval of The Wine Advocate before accepting benefits for private events/publications.

5.     Decline to Publish Jay Miller's Ratings of Spanish Wine Submitted after June 30,2011. The Wine Advocate has not published reviews of Spanish wine by Jay Miller since June 30, 2011, with one minor exception described below.4 Three of the four paid events in which Miller participated occurred after this date. The safest course to uphold the independence and integrity of The Wine Advocate is to decline to publish any additional reviews by Miller, even if he acted only in good faith throughout his trips in Spain.

6.         Continue the Practice of Actively Supervising Contactors' Reviews. For many years, Robert Parker has periodically tasted for himself wines reviewed by sampling of the wines, in general, but always tasted all of the highly rated wines. Parker never took issue with reviews of Spanish wines submitted by Jay Miller. This practice provides an additional protection that reviews in The Wine Advocate will not be influenced by any potential conflict of interest by a contractor.

7.     Require Greater Detail for Reimbursement of Expenses. TWAS submitted its expenses to The Wine Advocate on a single invoice with no supporting documentation-i.e., no actual receipts of its or Jay Miller's expenses in Spain. In the future, timely submissions of detailed invoices with appropriate substantiation should be a condition of payment to ensure that expenses can be properly tracked against activities conducted by contractors and others engaged by The Wine Advocate.

8.         Refuse to Allow Contractors to Conduct Private Events While Traveling for The Wine Advocate. This policy is designed to eliminate appearances of impropriety like those created by the apparent intersection of paid and unpaid events conducted by Jay Miller and The Wine Academy of Spain.

9.           Cooperate with the Parallel Investigation of These Matters Being Conducted by the International Masters of Wine. The Wine Advocate conducted this investigation with seriousness of purpose and integrity. In that same spirit, it should offer to cooperate with the parallel inquiry into these matters by the International Masters of Wine.

Footnotes:

1.     For example, Jim Budd and Associated Press reporter Harold Heckle ultimately accepted our invitation to cooperate with the investigation.

2.     Although Miller always retained "veto" power over wines and wineries suggested by Campo - and thereby ultimate control over his itinerary -Miller admitted that he never had reason to exercise this power with any of Campo's recommendations.

3.     For instance, the contract for the Navarra paid event, which occurred on July 4, 20 II, provided an option for visits to wineries by Miller and Campo as part of the €35,000 fee. Likewise, even after the present controversy was publicized by bloggers, ASEVIN publicly announced that its paid event with Jay Miller in November 2011 would include "visits to wineries."

4.     On February 29, 2012, The Wine Advocate published Miller's reviews of wines tasted at Hotel Wellington in Madrid on or about December I, 2011 - many weeks after the present "scandal" exploded on the Internet. It is undisputed, however, that no one (Miller, Campo, or TWAS) received any compensation for that tasting, and that the Madrid D.O. did not pay for any private event organized by TWAS.