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Consumer Advocates Assail Gov.;
Schwarzenegger's plan to abolish independent regulatory boards called blow to public interest. Cabinet member says citizens will have input.

Los Angeles Times | January 8, 2005

by Jordan Rau

SACRAMENTO -- Gov. Arnold Schwarzenegger's plan to abolish the independent boards that regulate California professionals has outraged public watchdogs, who say it would eradicate years of reform that curtailed the influence of trade groups over those who oversee them.

The changes would save no taxpayer money but would give the governor complete power in setting the rules that govern doctors, nurses and most of the state's 230 professions.

In the last decade, the boards that regulate contractors, barbers, accountants and other professionals have undergone quiet transformations. Once controlled by the professions they regulated, many now are run by a majority of public members who sit alongside professionals.

Boards that are still dominated by professional members must place consumer protection as their top goal. Members are appointed to fixed terms by state leaders and cannot be fired by anyone, including the governor.

But Schwarzenegger's plan to overhaul state government, submitted late Thursday, would transfer the jobs of those boards to administration agencies such as the Department of Consumer Affairs. Many of the boards -- including those that oversee physicians, dentists and nurses -- had not been slated for elimination by Schwarzenegger's own expert panel, the California Performance Review.

"This is ill-advised on the part of the administration," said Julianne D'Angelo Fellmeth, administrative director of the Center for Public Interest Law at the University of San Diego School of Law.

"A board has to meet in public; it has to respond to public comment. The only interest in Sacramento who's not a special interest is the public interest, and that's going to be blocked out," said Fellmeth, who is currently the state-appointed monitor of the Medical Board. "We're shoving public government into a private closet where only the special interests and the trade interests will be able to go."

In his annual address to the Legislature on Wednesday, Schwarzenegger portrayed the boards as expensive and "unnecessary" and implied that they were staffed with political appointees who did little work. "No one paid by the state should make $100,000 a year for only meeting twice a month," he said.

But out of the 88 boards and commissions Schwarzenegger targeted for abolition, only four pay six-figure salaries. The rest provide nominal fees -- usually $100 for each day worked -- or no compensation beyond expenses.

Administration officials said they did not know how much, if any, money the changes would save. But because most of the regulatory boards are supported by the fees of those they license, savings would not go back to taxpayers.

Fred Aguiar, secretary of the State and Consumer Services Agency, which would handle the work of three dozen boards, said the quality of oversight would not be diminished by the reorganization. He said the staff that currently evaluates disciplinary complaints for the boards would continue the same tasks in the administration and would ultimately be accountable to an elected official, the governor.

Administrative law judges would evaluate accusations brought against professionals. Aguiar said the public would have ample access through advisory panels set up by departments.

"This administration has had a priority of consumer protection," Aguiar said. "This does not change under this proposal. I believe this will be open government."

But many public interest advocates and lawmakers say the Schwarzenegger administration has consistently tilted toward businesses over consumers, both in the making of laws and the appointment of officials to administer them. Schwarzenegger's choice of Charlene Zettel, a former Republican assemblywoman, as director of his Consumer Affairs Department was criticized during her confirmation hearing last year because of her pro-business record.

Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, a Santa Monica nonprofit, said Aguiar also revealed a hostility to consumers while he was a Republican assemblyman.

"He is very much a political animal who, when he was in the Legislature, was fed and bred by the medical insurance complex," Court said. "We fought with Fred Aguiar on every major consumer protection matter we passed during his tenure, including HMO reforms, medical board changes and other consumer protection issues.

"The whole reason we have professional boards with private citizens deliberating in open meetings is because political bureaucrats like Aguiar botched the job and were working for the professional industries that were supposed to be regulated," Court said.

A Schwarzenegger spokeswoman declined to respond to the criticisms of Aguiar. In his remarks Wednesday, Schwarzenegger said he anticipated opposition. "Anytime you try to make something more efficient, there are a half-dozen special interests trying to prevent it."

Schwarzenegger's plan would also wrest power away from the Legislature, where leaders are now able to appoint some members of boards. That is one reason it is expected to encounter resistance when it arrives next month, after the Little Hoover Commission, an independent state oversight agency, concludes its analysis. The Legislature will have 60 days to approve or reject the governor's plan but cannot make changes; Schwarzenegger has threatened to bring it to the ballot if it fails.

Professionals overseen by boards where public members are still a minority -- including those for doctors and registered nurses -- said Schwarzenegger's changes would make regulation less democratic by vesting all of the power in the hands of the governor and his appointees.

"In the present system, going from [Gov. Pete] Wilson to [Gray] Davis or Davis to Schwarzenegger didn't change the philosophy," said Dr. Robert Hertzka, president of the California Medical Assn. He said that because the people overseeing regulators under Schwarzenegger's plan would be the governor's political appointees, "if we have a major partisan switch, you could have a significantly dramatic change in how physician discipline was being managed and run."

Rose Ann DeMoro, director of the California Nurses Assn., said that eliminating the nursing board would make it easier for hospitals to get rid of patient-friendly rules created by the board, such as one allowing nurses to block the release of patients they deem too ill to be discharged.

"He's trying to appear as a populist, while he's promoting perhaps the worst corporate agenda we've seen," she said.

Overall, Schwarzenegger proposed eliminating less than a third of all of the state's boards and commissions. One left standing is the California Film Commission, which Schwarzenegger, a former actor, has taken a great interest in, appointing his friends Danny DeVito and Clint Eastwood. The commission is supposed to encourage movie making within the state.

The governor also declined to eliminate the New Motor Vehicle Board, which handles disputes between car dealers and manufacturers, even though the performance review had said "there is no need for a governmental body to take on this work." The board is supported by California's car dealers, who are among Schwarzenegger's largest financial supporters.

Schwarzenegger also rejected his panel's advice to eliminate the Horse Racing Board, the Fair Employment and Housing Commission, the California Commission on Aging and the Athletic Commission. That last board has been faulted for mismanaging the pensions of boxers, and the CPR report said that no other sport in California requires its own public overseer.

State Sen. Liz Figueroa (D-Fremont), who heads the legislative committee that will be examining Schwarzenegger's proposal, said: "I don't see there's any rhyme or reason on why he decided to eliminate some boards and not others."

Recommended for elimination

Gov. Arnold Schwarzenegger endorsed the recommendations of his expert panel, the California Performance Review, to eliminate 88 of the state's independent boards and commissions. Those include:

* Architects Board

* Board of Barbering and Cosmetology

* Contractors State License Board

* Court Reporters Board

* Board of Geologists and Geophysicists

* State Board of Guide Dogs for the Blind

* Professional Engineers and Land Surveyors Board

* Landscape Architects Technical Committee

* Speech-Language Pathology and Audiology Board

* Structural Pest Control Board

* Board of Forestry and Fire Protection

* Building Standards Commission

* Integrated Waste Management Board

* Industrial Welfare Commission

* Occupational Safety and Health Appeals Board

* Unemployment Insurance Appeals Board

Schwarzenegger also is proposing the abolition of several other boards that the CPR did not see fit to eliminate. They include:

* Board of Accountancy

* Acupuncture Board

* Dental Board

* Medical Board of California

* Board of Occupational Therapy

* Optometry Board

* Board of Pharmacy

* Physical Therapy Board

* Board of Podiatric Medicine

* Board of Psychology

* Registered Nursing Board

* Vocational Nursing and Psychiatric Technicians Board

* Registered Veterinary Technicians Committee

* Veterinary Medical Board

* State Mining and Geology Board

* Alarm Company Operator Disciplinary Review

* Workers' Compensation Appeals Board

Sources: Governor's office, California Performance Review