HIGHLIGHTS OF
THE CONTRACTORS STATE LICENSE BOARD
ENFORCEMENT COMMITTEE MEETING

Sacramento, CA
April 3, 2008
By: Sam K. Abdulaziz

The Contractors’ State License Board held an Enforcement Committee Meeting on Thursday, April 3, 2006, in Sacramento, California. 

The Enforcement Committee members currently are Ed Lang, Chair; Bernedette Medrano, Cynthia Mitchell, Robert Lamb, John O’Rourke, and Donald Zampa.   

1.                  Statewide Enforcement Supervisors’ Meeting 

The Statewide Enforcement Supervisors’ Meeting was held on March 10 and 11, 2008, in the Contractors' State License Board’s Norwalk Office.  Highlights of the meeting are as follows: 

                                           a.                        Employee Recognition 

i.                     Darlene Cazares of the West Covina Investigative Center was honored for her consistently high closure rate and for her willingness to share her knowledge and expertise with other co-workers.  This award was given by Board Member Robert Lamb; 

ii.                   Board Member Lisa Miller presented Steve Tidwell of the Southern Statewide Investigative Fraud Team (SWIFT) with a certificate, to recognize him for effectively partnering with the Orange County District Attorney’s Office and other agencies to serve search warrants on three locations on the same date after completing a two-year-long investigation; 

                                          b.                        Enforcement Audit Review

i.                     With the exception of the Statewide Investigative Fraud Team, the Enforcement audit findings are complete.  The summaries of the individual audits are listed below: 

a.                   Intake and Mediation Centers Audit 

                                                                                                                          (A)            The Consumer Services Representative’s output was at a high level and settlement attempts commendable;

b.                  Case Management Audit 

                                                                                                                          (A)            Sacramento Case Management developed backlogs due to significant vacancies.  However, they are now caught up and efforts are underway to fill all vacancies; 

                                                                                                                          (B)            In Norwalk, Case Management lost two Enforcement Representative’s II and also have one vacancy that they are trying to fill; 

                                                                                                                          (C)            In Case Management, staffing is crucial because they have less staff than the other departments.  Further, it takes years of experience to deal with defense attorneys, Deputy Attorney Generals, and the like; 

c.                   SWIFT Audit 

                                                                                                                          (A)            Manager Peter Sugar has performed a statistical analysis of staff’s proactive enforcement efforts.  I believe that this is the first time that this type of statistical analysis was ever prepared.  It will be very helpful in planning.   

It was determined that leads do not result in a formal administrative action in most cases and, 90% of sting targets result in a formal action. 

d.                  Investigative Centers Audit 

                                                                                                                          (A)            The audit identified areas that need improvement.  The West Covina Investigative Center has a successful process in place to follow up on criminal actions and other investigative centers may want to emulate those.   

e.                   Training Needs 

                                                                                                                          (A)            Training needs were identified for all Enforcement programs and staff moved quickly to secure the services of Deputy Attorney General Mike Franklin.  Training is underway. 

2.                  CSLB INVESTIGATOR TRAINING  

The Enforcement staff has done a wonderful job in creating a listing of various Business and Professions Code sections, interviewing techniques, and strategies.  Report writing and trouble shooting are also addressed and become part of the investigation.  The outline is substantial.  The Highlights are as follows: 

                                                  a.                 Investigator Duties and Responsibilities 

                                                 b.                 Elements of Commonly Used Business and Professions Code Sections 

i.                     7107. Abandonment without legal excuse; 

ii.                   7108. Diversion of funds or property; 

iii.                  7109(a). Willful departure in any material respect from accepted trade standards; 

iv.                 7109(b). Willful departure from or disregard of plans or specifications in any material respect; 

v.                   7110.  Willful or deliberate disregard and violation of the building laws; 

vi.                 7113. Failure in a material respect on the part of a licensee to complete any construction project or operation for the price stated in the contract; 

vii.                7114(a).  Aiding and abetting an unlicensed person to evade the provisions of the License Law or conspiring with an unlicensed person or allowing one’s license to be used by an unlicensed person, or acting as agent or partner or associate of an unlicensed person; 

viii.              7116.  The doing of any willful or fraudulent act by the licensee as a contractor which substantially injures someone; 

ix.                 7119. Willful failure or refusal without legal excuse on the part of a licensee as a contractor to prosecute a construction project or operation with reasonable diligence causing material injury; 

x.                   7120. Willful or deliberate failure by any licensee or agent or officer thereof to pay moneys when due for any materials or services rendered; 

                                           c.                        Interview Techniques and Strategies  

i.                     Preparation before beginning interviews; 

ii.                   Statements; who, what, when, where and how; 

iii.                  Securing an experts opinion; 

                                          d.                        Report Writing 

i.                     Organizing the report for format to be used; 

ii.                   Purpose; 

iii.                  Content; 

                                           e.                        Overview of Evidence 

3.                  COMPLAINT-HANDLING STATISTICS

There was an increase in the number of complaints and the time within which they were handled.  The increase was the result of an increase in pending consumer complaints filed during July through December of 2007.   

During 2007, staff exceeded the production goal of ten closures per Enforcement Representative.  However, during November and December 2007, the majority of Southern California staff were directed to provide assistance to wild fire victims, resulting in a reduction in the overall state wide production average for those two months. 

II.                PROACTIVE ENFORCEMENT EFFORTS UPDATE 

1.                  Proactive Enforcement Activities 

CSLB staff continued to partner with various state agencies and local law enforcement representatives to conduct simultaneous stings in seven different locations throughout California.  These operations resulted in the issuance of 175 Notices to Appear and the arrest of 15 individuals.   

2.                  Comments of Interest Arising out of the Stings: 

                                           a.                        A suspect who received a Notice to Appear is also an employee of the City of American Canyon.  He apparently bids side jobs while on his lunch break; 

                                          b.                        One suspect who had been set to appear on day two of a sting was over-eager and showed up a day early;

                                           c.                        One appointment in Anaheim netted a truckload of laborers along with two unlicensed contractors.  One of the unlicensed contractors had a $50,000 outstanding warrant; 

                                          d.                        One arrestee has been the subject of a six-month investigation by the SWIFT unit.  His MO was to pick up day laborers and work them for 12 to 14 hours a day on projects throughout the Sacramento area.  He would promise to pay them on Friday, but when Friday rolled around, he failed to return to pick them up and never paid them for their work; 

                                           e.                        One suspect was arrested after a background check revealing that he had a $100,000 outstanding felony arrest warrant for rape; 

                                            f.                        This report could go on and on.  The staff is doing a wonderful job; 

3.                  Update on Proactive Priorities and Criteria 

In February 2008, staff met with Dan Kurtilla, Chief of Underground Economy Operations for the Employment Development Department (EDD), to explore ideas to improve proactive enforcement efforts in the ongoing effort to combat the underground economy.  Specific items of discussion include how CSLB and EDD can work more effectively together in developing processes and procedures that will assist industry associations in partnering efforts. 

4.                  Industry Outreach 

Recognizing that CSLB shares a mutual goal with industry associations, consideration should be given to developing a fact sheet that explains to associations what they can do to assist EDD and CSLB by ensuring that their members are verifying subcontractors license status and providing lead information that will likely result in a formal action.  For example, obtaining business cards, names of employees, and/or taking photographs of work trucks to identify offenders.   

5.                  Proposals for Enforcement Committee Consideration

There are numerous other proposals for the Enforcement Committee’s consideration.  However, it would be much too long to set them out herein. 

III.             PARTNERING WITH STATE AGENCIES

1.                  Memorandum of Understanding 

Over the last three years, the CSLB has worked diligently to develops operation agreements with its partner agencies to facilitate the sharing of records and databases.  In the past, agencies rarely shared information about violations of state licensing, labor, and tax laws.   

The CSLB has the authority to impose suspensions against licensed contractors who fail to pay employee wages, pay taxes, or carry workers’ compensation insurance.  Now there is a system in place for other regulatory agencies to notify the CSLB about these violations.  CSLB is currently discussing with Department of Industrial Relations Office of Director-Legal the development of a Memoranda of Understanding which would provide express authority for investigators to have access to the Board’s database for purposes of ensuring compliance with worker’s compensation laws. 

The CSLB also entered in to four different Memoranda of Understanding as follows: 

                                          a.                         Employment Development Department; 

                                          b.                         Department of Industrial Relations – Division of Labor Standards Enforcement; 

                                          c.                         Department of Industrial Relations – Division of Occupational Safety and Health; 

                                          d.                         Department of Insurance; 

As you can tell, the Enforcement staff has been very busy and very productive.  Remember, this is a very shorthand review of the great amount of work done by the Enforcement staff.

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