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June 2, 2009
Joanna Gin, Analyst
RE: SB202 - Opposed Dear Ms. Gin and Assembly BP&E Committee Members: I am a licensed California private investigator and have been so licensed since 1988. A misconception of the thousands who are opposed to SB202 is that we are opposed to continuing education and professionalism. This couldn’t be farther from the truth. A recent independent poll conducted by the state’s second largest private investigation association revealed that 76% are OPPOSED to SB202. The state’s largest private investigator association, of which I am a member, is the sponsor of SB202 and they have not and will not poll their membership or the industry. SB202 is authored by Senator Tom Harman (Author) and sponsored by the California Association of Licensed Investigators (Sponsor - CALI). SB202 is a mirror image of the 2007-8 bill, SB1282, (Margetts), that was wisely vetoed by Governor Schwarzenegger in September 2008 because given the economy and state budget, it was not a priority bill for California. The conditions this year are seriously more dire. Although the Senate BP&E Committee unanimously passed SB202, their own committee analyst gave very few, if any, reasons as to why the bill should pass and questioned why existing law is insufficient. However, once one looks at the political campaign contributions the Sponsor’s Political Action Committee gave to members of this Senate committee, it becomes much clearer. A copy of G.V. Ayers’ analysis of the bill is attached and I’ve taken the liberty to highlight the salient points.
Further, the author’s annual projected costs to administer the program were short over 108K which was presented to the committee by the Opposition to SB202 and obviously ignored for the purpose of advancing the bill and fulfilling campaign obligations. Thereafter, the bill was amended to place the burden of funding the program completely upon those providing the services. This is nothing more than a desperate “bait and switch” tactic to avoid accountability for the unknown costs of the
Page Two program and to relieve responsibility from the Author and Sponsors for pushing a program that would have cost the State money. Now, the way the bill has been amended the cost of entire program will ultimately fall directly onto the already over-burdened backs of the small business private investigator. Brilliant or bait and switch? Efforts to discuss with the Author and Sponsor improvements and/or amendments have gone without acknowledgment. However, when PORAC opposed the bill, the Author and Sponsor flip-flopped their long standing and documented position to appease PORAC while continuing to ignore the concerns of the Opposition. Below is a summary of concerns expressed by licensed investigators who are opposed to SB202: Legislative History In 2001, an unsuccessful effort to mandate a continuing education program for private investigators was contained in AB761, (Maddox). The result of this effort was adding Sections 7527.1 and 7542.2 to the Business and Professions Code. Our licensing agency, Bureau of Security and Investigative Services, (BSIS), presently has authority to require and test in 2 of the 3 mandated subjects contained in SB202, yet they haven’t. Unlike the provisions of these B&P sections, SB202 does not have a testing component and course completion is self-certified. Isn’t this a lot to do about nothing? In 2008, SB1282 was introduced by Senator Margetts and vetoed by Governor Schwarzenegger in September 2008. In 2009, SB202 was introduced by Senator Harman. Vocal opposition to the bill has been voiced from many concerns for reasons stated below. What Problem is this Legislation Attempting to Fix? The Author and Sponsors have not articulated a problem that SB202 is designed to correct. Rather, they appear to rely on a premise that it is necessary to protect consumers. However, they neglect to mention that the industry does obtain Voluntary Continuing Education (VCE) from a variety of resources.
Data published by our licensing board, the Bureau of Security and Investigative Services, (BSIS), reflects that for the four year period 2005 - 2008, that only one (1) disciplinary citation was issued to a private investigator which was in 2005. Four (4)
Page Three licensed private investigators have been placed on disciplinary probation during this same four year period; 2 in 2005, 1 in 2006, 1 in 2007 and none in 2008. If there’s any trend to extrapolate from these numbers, there have been significant improvement among the state’s 9,993 licensed and professional private investigators. This is not an industry with any evidence that it is harming consumers given that only five (5) licensed investigators out of the four year average of 9,993 have been disciplined. That’s 1.25 investigators out of 9,992 disciplined annually over the past four years. SB202 is an unnecessary mechanism and effort to protect consumers which is the premise of the Author’s stated purpose. Creation of Cottage Industry There is concern that the Sponsors are simply using continuing education legislation to advance an agenda to gain industry control over who can become a continuing education provider (CEP) as well as an authoritative voice over BSIS . This issue has been repeatedly downplayed by the Sponsors, yet the conflict of interest issue recently broke when their Immediate Past President resigned from the Board due to a conflict. (See Conflict of Interest below). BSIS has Present Authority to Require and Test in 2 of 3 Mandated Subjects BSIS presently has authority to require and test in 2 of the 3 mandated subjects contained in SB202 under B&P Sections 7527.1 and 7542.2. They haven’t. Unlike these B&P sections, SB202 does not have a testing component and course completion is self-certified. Fee Increases & Expense of MCE Many private investigators are experiencing economically challenged times and SB202 does not deliver value, nor does it propel the profession into a higher level of professionalism. Further, there is absolutely no evidence provided by the Author that the consumer needs additional state mandated protections. Neither the Author or the Sponsor are able to put an expense cap on course costs, availability of courses, travel and places of course availability. The general expectation is that we should trust that everything will work out to everyone’s benefit, yet, experience and foresight tells us not to.
It is also disheartening to hear the Sponsor’s elitist advocates state that if a licensee can’t afford to pay the unknown fees and expenses in these troubling economic times that they don’t deserve to be in business.
Page Four Loopholes SB202 does nothing to require mandatory CE for the many thousands of investigators not regulated by BSIS, but who provide the exact same professional services to consumers, such as, federal and county public defender investigators, investigative employees of law offices, insurance company investigators and employees of licensed investigators. This loophole would unfairly punish the small business person who holds a state license and exclude the thousands who perform the same services to the same consumers, yet have paychecks, paid vacations and benefit packages. Sponsor’s Conflict of Interest - Unclean Hands Sponsor’s Board of Directors has unclean hands. After over a year of denying that board members were creating a “cottage industry” out of SB1282 from which they would derive personal financial benefit, it was recently confirmed that the Immediate Past President, Nick Savala, most recently resigned from the Board, as per Director Anne Fields, “Mr. Savala resigned due to a possible conflict of interest and for other reasons.” Sponsors then reported that Mr. Savala’s MCE class plan was completed in September 2008, the same month that Governor Schwarzenegger vetoed SB1282. A simple coincidence or a hand caught in the cookie jar? Let it be clearly known that SB1282 was introduced during Mr. Savala’s tenure as President of CALI. His resignation from the Board due to “a possible conflict of interest .....” is indicative of where his heart, or business interest really is; to quit and pursue becoming a “for profit” CEP rather than complete his term of association service. This disclosure was followed by more disclosures and individual board members being named as also intending to take advantage of the fruits of their Mandatory CE legislation. This legislation is simply not supported by the industry. One board member recently estimated that “2/3rds” of the Sponsor’s current board has also made their indications known that they too have planned on becoming CEPs.
If not defeated in committee, SB202 should be immediately amended to prohibit any of the Sponsor’s board of directors, family members, special industry friends or any of the Sponsor’s membership from becoming CEPs. Further, they should be denied any opportunity to receive any benefit or act in a consulting or review panel position with BSIS for a period of ten (10) years as a cure to the conflict of interest breach.
Page Five Bureau of Security and Investigative Services (BSIS) BSIS is under the Department of Consumer Affairs, (DCA). State mandated budget cuts, work furloughs and the recent resignation of Connie Lopez, Director of Consumer Affairs, under a cloud of financial irregularities, should be viewed in the totality of the need and timing of SB202. BSIS does not presently have a Director. Only within the past months was Connie Trujillo appointed to be Deputy Director and she is currently the acting Director. Ms. Trujillo comes from the Contractor’s Board and her presence at BSIS is too new to evaluate. There is an absence of experienced leadership at both DCA and BSIS and although we all hope that Ms. Trujillo succeeds, it is still premature to make a progress assessment. BSIS has failed our industry in effectively doing anything more than collecting our fees and issuing a state license. There are legitimate and admitted mistakes by BSIS in areas of:
1. Unlicensed Activities (most damaging to consumers)
Record Political Campaign Contributions Moreover, SB202 Sponsors have donated record political contributions generated from their membership’s dues during the 2007-8 legislative session while under the presidency of Immediate Past President Nick Savala. This, coupled with the Conflict of Interest disclosures, has caused wide distrust among their membership and has caused a ‘stop a nothing’ mentality.
For these and many other reasons, SB202 is not designed to benefit the industry or consumers it is purported to protect. This is the poorest of economies to burden BSIS, the private investigator’s small businesses or the consumer.
Page Six This letter is in opposition is written in behalf of the undersigned and the hundreds of California licensed private investigators whom have advised the undersigned of their opposition to SB202. The Sponsors have previously provided support letters from Adelanto Committee of Los Angeles, National Organization for Women and the Privacy Right Clearinghouse. A caution; the Sponsor’s board members sit on these organizations’s boards and are behind the support letters. Regardless, they have nothing to do with the private investigator profession and their support or opposition is meaningless in any context related to SB202. Very truly yours, CAPITAL CITY INVESTIGATIONS
RICK von GELDERN
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