02/07/2006 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB399 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 34 | TELECONFERENCED | |
| *+ | HB 399 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
February 7, 2006
8:05 a.m.
MEMBERS PRESENT
Representative Carl Gatto, Vice Chair
Representative Jim Elkins
Representative Bob Lynn
Representative Berta Gardner
Representative Max Gruenberg
MEMBERS ABSENT
Representative Paul Seaton, Chair
Representative Jay Ramras
COMMITTEE CALENDAR
HOUSE BILL NO. 399
"An Act establishing the office of elder fraud and assistance;
and relating to fraud involving older Alaskans."
- MOVED HB 399 OUT OF COMMITTEE
HOUSE BILL NO. 34
"An Act relating to the expungement of records relating to
conviction set asides granted after suspended imposition of
sentence."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HB 399
SHORT TITLE: ELDER FRAUD AND ASSISTANCE/OPA
SPONSOR(s): REPRESENTATIVE(s) CHENAULT
01/27/06 (H) READ THE FIRST TIME - REFERRALS
01/27/06 (H) STA, FIN
02/07/06 (H) STA AT 8:00 AM CAPITOL 106
WITNESS REGISTER
SUE WRIGHT, Staff
to Representative Mike Chenault
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 399 on behalf of
Representative Chenault, sponsor.
LALANYA SNYDER, Staff
to Representative Mike Chenault
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of Representative
Chenault, sponsor.
JOSH FINK, Director
Office of Public Advocacy (OPA)
Department of Administration
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of OPA during the
hearing on HB 399.
DAN McDOWELL
Wasilla, Alaska
POSITION STATEMENT: Testified on behalf of himself during the
hearing on HB 399.
BOB DREYER, Ombudsman
Long Term Care Ombudsman
Alaska Mental Health Trust Authority
Department of Revenue
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions on behalf
of the Long Term Care Ombudsman during the hearing on HB 399.
ACTION NARRATIVE
VICE CHAIR CARL GATTO called the House State Affairs Standing
Committee meeting to order at 8:05:07 AM. Representatives
Elkins, Lynn, Gardner, and Gatto were present at the call to
order. Representative Gruenberg arrived as the meeting was in
progress.
HB 399-ELDER FRAUD AND ASSISTANCE/OPA
8:06:30 AM
VICE CHAIR GATTO announced that the only order of business was
HOUSE BILL NO. 399, "An Act establishing the office of elder
fraud and assistance; and relating to fraud involving older
Alaskans."
8:06:38 AM
SUE WRIGHT, Staff to Representative Mike Chenault, Alaska State
Legislature, introduced HB 399 on behalf of Representative
Chenault, sponsor. She said the proposed bill is an event-
driven piece of legislation. She related the case of the
McDowell family, in which a relative from Colorado "bought a
$250,000 note and filed liens on every piece of property the
McDowells owned, [including their] vehicles." She stated, "This
man, by the time our office got involved, was evicting them from
their property that he had gutted over the summer, having
removed the bathroom facilities, the kitchen, and the insulation
to the house." Mr. McDowell is in the early stages of
Alzheimer's and Mrs. McDowell is now living with public
assistance in the Sterling Senior Center. The Office of Public
Advocacy (OPA) has stepped in to stop what has been going on
with this particular case. Ms. Wright said when Representative
Chenault became involved in this case, phone calls from around
the state started coming in from people in similar situations.
She said people are ashamed to admit that they have been
"taken," and they are scared. There are people who have
experienced physical abuse and having food withheld.
MS. WRIGHT said more than half of the states have some type of
protection in effect for senior citizens for senior citizens
over 55 or 60; in some states the age is 65. She directed
attention to an article included in the committee packet,
entitled, "Stolen 'Golden Years'." Ms. Wright reported that
almost half of the representatives in the House have added their
signatures to the bill.
8:10:08 AM
MS. WRIGHT expressed willingness to "take care of that little
conflict that some of you have with the age restriction," by
increasing the age to 65 from 55. She explained that the bill
sponsor chose 55 because it is the generally accepted age for
which AARP is looking at financial fraud.
8:11:21 AM
REPRESENTATIVE LYNN asked if there are any other specific groups
that are particularly vulnerable to fraud.
8:11:41 AM
MS. WRIGHT answered yes, but noted that most of the disabled
populations have a mechanism in place already for protection.
8:12:19 AM
LALANYA SNYDER, Staff to Representative Mike Chenault, Alaska
State Legislature, testified on behalf of Representative
Chenault, sponsor. Regarding cases that go unreported, she
referred to a quote from the previously mentioned article, which
read in part: "Seventy percent of the nation's net worth is
owned by those aged 50 or older. This makes seniors a rich
target." She noted that financial abuse of seniors takes many
forms, including: credit card fraud, real estate scams, and
burglary. As many as 5 million seniors may be victims of
financial exploitation each year. Ms. Snyder said the proposed
legislation would benefit seniors by establishing an office of
elder fraud and assistance.
8:14:49 AM
REPRESENTATIVE LYNN said an increasing number of seniors are
becoming comfortable with the use of the Internet. He said the
Internet is rife with fraud and that issue needs to be
addressed. He surmised that "that would probably come under
[the Federal Communications Commission (FCC)]."
8:15:33 AM
REPRESENTATIVE ELKINS noted that the article specifies some
states have associations between their elderly fraud programs
and banks, and he asked if there is anything similar ongoing in
Alaska.
8:16:01 AM
MS. SNYDER stated her understanding that there is not, but
opined that the article has information in it that makes it a
valuable source for Alaska to start its own office.
8:16:28 AM
REPRESENTATIVE GARDNER mentioned the Long Term Care Ombudsman,
under the Alaska Mental Health Trust Authority, within the
[Department of Revenue], and noted that that entity's focus is
primarily on the elderly in long-term care, with the ability to
do investigations. She offered a description of that entity as
follows: "They're a specially trained and certified state
government employee, given authority by federal and state
statutes to identify, investigate, and resolve complaints made
by or on behalf of Alaskans who are 60 years of age and older."
She suggested that the state already may have what the bill is
proposing and that just needs to be advertised. She noted that
HB 399 would authorize OPA to investigate complaints. She asked
if OPA already has an investigator on staff. She observed,
"They currently provide services to people who have a
conservator or legal guardian, but investigations is a different
kind of bailiwick ...."
8:17:48 AM
MS. SNYDER concurred with Representative Gardner's statements.
Notwithstanding that, she said she thinks the state needs a
resource that is specifically devoted to the elderly outside of
long-term care.
8:18:50 AM
REPRESENTATIVE GRUENBERG said the committee has not received any
fiscal notes for the bill.
8:19:02 AM
MS. SNYDER said information is still being gathered into a
fiscal note, and she said the committee would receive a fiscal
note as soon as possible.
8:19:33 AM
REPRESENTATIVE GRUENBERG asked why something like the Office of
Elder Fraud and Assistance isn't established within the
Department of Law in the Office of the District Attorney, in
order to pursue criminal complaints.
8:20:02 AM
MS. SNYDER deferred the question to Josh Fink.
8:20:10 AM
REPRESENTATIVE GRUENBERG directed attention to page 3,
[beginning on line 9 through line 12], which read as follows:
The office shall work in cooperation with local,
state, and national law enforcement agencies and may
bring civil enforcement actions for injunctive and
other relief for fraud committed against older
Alaskans.
REPRESENTATIVE GRUENBERG said, "Often these result in criminal
actions." He indicated that the ability to bring criminal
enforcement would give the office "more teeth." He referred to
page 4, [lines 18-21], which read:
(3) in cases involving fraud, the department
or its designee may refer the report made to the
department under AS 47.24.010 to the office of public
advocacy for investigation; in this paragraph, "fraud"
has the meaning given in AS 44.21.415.
REPRESENTATIVE GRUENBERG asked why the Department of Health and
Social Services is authorized to make the report only to the
Office of Public Advocacy (OPA) and not also to the police or
the Office of the District Attorney.
8:20:48 AM
MS. SNYDER agreed with a further comment from Representative
Gruenberg that doing so would increase the effectiveness of the
bill's plan.
8:21:31 AM
REPRESENTATIVE GARDNER said Adult Protective Services, under the
Division of Senior and Disabilities Services, within the
Department of Health & Social Services, offers investigation of
reports, protective placement, and guardianship conservatorship
counseling. She stated, "It seems to me that this might also be
a place to put teeth in or strengthen their existing strengths
rather than bringing ... a third office into it. I'm just
wondering if there's a benefit to doing this under OPA instead
of Adult Protective Services or under the other offices that we
have."
8:22:12 AM
MS. SNYDER deferred that question to Josh Fink.
8:22:53 AM
JOSH FINK, Director, Office of Public Advocacy (OPA), Department
of Administration, informed the committee that he has not yet
had a chance to fully discuss the proposed legislation with the
other agencies charged with addressing financial exploitation of
the elderly and other vulnerable adults. Accordingly, he said
he doesn't believe the administration has an official position
on the specifics of HB 399. Notwithstanding that, on behalf of
his commissioner, he commended the sponsor of the bill for
introducing legislation to address the exploitation of older
Alaskans, a practice which is an unconscionable growing trend.
He continued:
While we have a myriad of state agencies to report
these incidents to, with one exception there currently
is no agency actively pursuing civil remedies for the
exploited individuals in court - private individuals.
MR. FINK listed the following state agencies as having some
jurisdiction in financial exploitation matters: Adult
Protective Services, Long Term Care Ombudsman, Division of
Banking & Securities, Office of the District Attorney, and
Office of Public Advocacy, as well as numerous federal agencies.
The leading agency on processing and investigating reports of
harm is Adult Protective Services. According to the director of
that agency, Brenda [Mahiatini], in fiscal year 2005 (FY 05),
Adult Protective Services investigated 500 cases of financial
abuse and found 87 percent of them to be valid. According to a
hand count conducted by Ms. Mahiatini, the agency investigated
397 cases of financial abuse in FY 04. He continued:
While Adult Protective Services can investigate these
cases and, when they're valid, put in safety measures
relatively quickly to stop the future exploitation,
they currently have no statutory ability to retrieve
monies and properties lost for individuals; they don't
have the ability to go to court and file a suit on
behalf of an individual to recover lost monies or
defrauded funds.
MR. FINK said a similar situation exists with the Division of
Banking & Securities. That division can investigate complaints
regarding fraudulent security scams targeted at the elderly, but
it cannot undertake any private action in civil court on behalf
of the those individuals.
MR. FINK said OPA has the ability to undertake private action to
recover fraudulently obtained funds and property if it is the
ward of the individual. He said OPA has approximately 900
adults ranging in age from 18 to senior citizen for whom it
serves as public guardian. He said he conducted an informal
survey yesterday which shows that about 10 percent of OPA's
clients have suffered financial exploitation. Like Adult
Protective Services, he said, when OPA gets appointed, the first
thing it does is put safety measures into place to stop future
exploitation. As guardians and conservators, OPA can do more
than APS with its wards; it can go to court on their behalf,
individually, and sue to recover fraudulently taken funds. He
added, "To be honest though, if the recovery involves more than
going to small claims court, we're very limited in what we can
do with out resources and expertise ...."
8:26:54 AM
MR. FINK said if there is enough at stake, OPA can interest
private attorneys to take the case on a contingency basis. He
noted that OPA is currently working with a private attorney on
the case to which Ms. Wright previously referred. The amounts
of money involved vary greatly, he said. The clients OPA aids
are generally poor, but the agency has received a number of
appointments from people who had funds that were taken from them
and, thus, ended up poor. He said OPA sees fraudulent
exploitation ranging from $800 to $4,000.
MR. FINK explained that exploitation occurs in a variety of
ways: direct theft of money, such as taking a permanent fund
income (PFD) entitlement income, or native corporation
distribution income; theft of personable belongings or food,
including taking advantage of food and housing allowances;
running up credit cards for large purchases; and obtaining liens
against property. Mr. Fink said family members' friends exploit
people by selling the victim's goods and services. He said
oftentimes they will obtain court appointed status and then take
advantage of the incapacitated person's resources by signing
things over to themselves, such as benefit checks and property.
Some relatives have become guardians in order to write checks to
themselves, turn homes over to themselves, or transfer property
to themselves. He offered further examples.
8:30:21 AM
MR. FINK said it would greatly serve the public to have a state
agency that could go to court on behalf of defrauded individuals
who cannot do so themselves. The proposed legislation
anticipates that responsibility would fall to OPA; however, he
said there are other agencies that could handle the work, and
that would be a policy call. Regarding the question about the
fiscal note, he said he is trying to come up with some
standards, given the case numbers he received from Adult
Protective Services regarding what sort of caseload an attorney
could handle. He said however this works out, OPA doesn't want
to be duplicating what other agencies do. He said APS has five
investigators. He suggested one possibility could be that if
APS investigates and finds that court action needs to be taken,
the case could be referred to OPA. He said the committee may
want to consider whether OPA's involvement would be needs based.
He explained that generally OPA is appointed only when
individuals cannot take care of the problems themselves. He
said, "The committee may want to consider if we litigate on
behalf of individuals that there'd be some mechanism by which,
if we were successful, we could recover our actual costs, if
there was not financial hardship on the individual we were
litigating for." He said currently OPA charges its wards a
small fee of $40 each month, but it waives that fee if paying it
is a financial hardship for the client.
8:31:57 AM
MR. FINK, in response to a request for clarification from
Representative Gardner, reviewed that under current law OPA
would not act on behalf of a person unless it was their guardian
or ward; however, HB 399 would expand that statutory mandate.
He noted, "Under current statute, if we become aware of a
protective appointment - a private guardian or private
conservator - and it comes to our attention that there's
exploitation going on, we do have the statutory to go to court
and intervene in that proceeding and ask that the guardian or
conservator be removed."
8:32:39 AM
REPRESENTATIVE GARDNER asked how OPA would respond to a
situation in which it had somebody on its caseload who had been
mistreated and their assets taken improperly but, perhaps due to
Alzheimer's, refused to take OPA's advice in going to court.
8:33:23 AM
MR. FINK replied that if the individual does not have an
appointed conservator or guardian, whether or not to have one
would be his/her decision, because OPA cannot litigate on
someone's behalf if that person doesn't wish it. If that person
has Alzheimer's, dementia, or some developmental disability,
family members can petition for a guardianship or
conservatorship. Adult Protective Services often petitions for
those. Then the probate court appoints that guardian or
conservator an attorney, a court visitor conducts an
investigation, and the court looks at the issue of capacity and
makes a determination as to whether that person needs a
protective appointment because he/she lacks the capacity to make
the decisions. If the court finds the person does not lack
capacity and does not grant a protective order, then it would be
up to that individual as to whether any litigation was pursued
at all, he concluded.
8:34:24 AM
REPRESENTATIVE GARDNER asked if someone's inability to protect
him/herself from predatory relatives could be in and of itself
evidence that he/she doesn't have the capacity to make
decisions.
8:34:49 AM
MR. FINK answered, "For a conservatorship, possibly, yes." He
clarified the difference between a conservatorship and a full
guardianship is that the former's appointment is limited to
managing the financial aspect of the individual's life, whereas
the latter's appointment can also make legal, medical, and
housing decisions - basically acting as a parent.
8:35:12 AM
REPRESENTATIVE GARDNER asked Mr. Fink if he anticipates that
sometimes the actions that OPA would want to take would be
opposed by the client.
8:35:30 AM
MR. FINK said sometimes OPA's wards oppose appointment, but most
don't.
8:36:15 AM
MR. FINK, in response to a question from Representative Gardner,
said his previous statement that OPA can go to court and APS
cannot, does not take into consideration the Long Term Care
Ombudsman, which can go to court, but only has one attorney
general working with it. He said [the Long Term Care Ombudsman
agency] is an option as one place to put the function of the
bill if the committee decides not to assign it to OPA.
8:37:49 AM
REPRESENTATIVE GARDNER asked what the benefit would be in
putting the function of the bill into OPA.
8:38:01 AM
MR. FINK reiterated that that is a policy decision for the
committee to make and said he needs to work with his
commissioner regarding what the administration's position will
be. He said OPA currently has applicable experience; it has
been in service since 1984, and has provided public guardian
services since then.
8:38:34 AM
REPRESENTATIVE GARDNER asked, "If you were representing somebody
who was not in a long-term care facility and then was moved to a
long-term care facility, would the case then move to the Long
Term Care Ombudsman?"
8:39:00 AM
MR. FINK answered no. He explained that the Long Term Care
Ombudsman does not provide guardian or conservatorship services,
but OPA does; therefore, wherever OPA's ward transfers, OPA
would remain in that capacity. He continued:
If the question was, "Would we still pursue a private
civil remedy if they were financially exploited or
return it over to the [Long Term Care Ombudsman]?," as
a conservator of a ward it would be our obligation to
pursue the litigation. Now, if the [Long Term Care
Ombudsman] offered to provide that for us, we would
utilize that, because that would lessen the draw on
our resources. If they did not provide that, it would
be incumbent upon us to use either an in-house
attorney or contract with someone to pursue that.
8:39:41 AM
REPRESENTATIVE GRUENBERG said there seems to be a real
fragmentation in responsibility in this area and the potential
for duplication. He observed that there are at least eight
different agencies in this area: the Long Term Care Ombudsman,
the Office of Public Advocacy, Adult Protective Services, Alaska
Legal Services, the district attorney, the Division of Banking &
Securities, the Division of Insurance, and both local police and
the Alaska State Troopers. He asked Mr. Fink, "What's the best
way of making this the most efficient and effective?"
MR. FINK said there would probably be some value in having these
agencies form a working group. He said the agencies that
Representative Gruenberg just mentioned all have somewhat of a
different role.
8:41:53 AM
REPRESENTATIVE GRUENBERG emphasized that was the intent behind
his question. He listed questions that have to be addressed,
including: who will be responsible and how the costs will be
borne. He mentioned SB 132 and an amendment that allowed the
use of "the little ... private attorney general theory." He
explained, "There was limitation on the funding for the agency,
and if people, in that case, took discrimination cases on a
private basis and they prevailed, they would be able to get
actual full attorney's fees." He said that is something else
that should be considered. He said the model that was used in
SB 132 was taken from the consumer protection law of Alaska.
8:44:20 AM
REPRESENTATIVE GRUENBERG directed attention to the previously
mentioned language on page 3, [lines 9-12], and then referred to
[OPA's] existing authority in AS 44.21.410(a). Referring back
to the language in the bill again, he asked, "That doesn't say
that you can do it unless you first take a guardianship, right?"
8:46:16 AM
MR. FINK said he thinks the language could be clearer. He said,
"Currently we cannot unless we have an appointment as a
conservator or guardian; however, I believe with the language on
[page 3], lines 9-12, the intent of the sponsor was to allow us
to bring action on behalf of an individual who was not a
guardian or ward, but simply was an Alaskan 55 or older." He
directed attention to the language on page 3, lines 2-4, which
read:
(11) investigate complaints involving fraud
committee against residents of the state who are 55
years of age or older; in this paragraph, "fraud" has
the meaning given in AS 44.21.415.
MR. FINK indicated that the phrase "and bring private civil
action on behalf of individuals" should be inserted somewhere in
that language.
8:46:44 AM
REPRESENTATIVE GRUENBERG said he would like to know whether it's
more cost effective for the state to simply contract the work
out to legal services, rather than having to having to hire new
state employees.
8:47:09 AM
MR. FINK said that is a policy decision. He noted that OPA has
the right to contract out work when it cannot do it in house and
Alaska Legal Services has recently taken on some of OPA's
caseload in Juneau. He said if the function proposed in the
bill "sat at OPA," then OPA may make arrangements with Alaska
Legal Services to do some of that work.
8:48:17 AM
REPRESENTATIVE GRUENBERG said it looks like the only thing HB
399 addresses is financial abuse of elders, but not physical or
mental abuse, and he questioned why all three are not addressed
together.
8:48:51 AM
MR. FINK replied that physical abuse is a crime and presumably
the district attorney would be involved. If an elder was in an
unhealthy situation or living environment, a report of harm
would be made to Adult Protective Services who would then
investigate and take action within 10 days. He said APS will
often file a petition for a guardianship or conservatorship. He
stated that OPA is an appointment of last resort, after first
looking to family members, friends, or private entities for
help. He continued:
Speaking of ... civil remedy in court for physical ...
or mental abuse, we don't ... really do much of that.
I suppose you could do that - that's a tort - but
given the demands on our resources it's not something
-- I'm not aware of any time where we've gone into
court and sued someone for a tort on behalf of a
client.
8:50:32 AM
REPRESENTATIVE GRUENBERG responded:
I'm just thinking you might have the same person
committing the physical tort and also some
misappropriation conversion in the legal sense - that
sort of thing - and you'd want to probably combine
them in the same suit. There may even be some
insurance; it may be a small amount involved. It
wouldn't be worth a private attorney's time and [it
would be] difficult to get a private attorney. But
I'm thinking that if we're going to do this, you ought
to have the broadest possible authority.
REPRESENTATIVE GRUENBERG stated his strong support of the bill,
but said if the concept is adopted it should be dealt with in
the best possible way to "give these people the most protection
we can."
8:51:24 AM
VICE CHAIR GATTO said the elderly are susceptible to spending
money on things such as magazine subscriptions that never get
read or $29.95 gadgets from television infomercials. He
indicated that the only way to stop that kind of spending is to
take away the person's ability to write a check or use a credit
card. He offered his understanding that that can be done by
having a conservator.
8:53:13 AM
MR. FINK said oftentimes family members become the conservator
by becoming power of attorney. There are lesser appointments
than that of conservator, he said. For example: representative
payee, which is not a protective appointment in court, but is
something that can be formerly set up with private entities that
receive the person's benefit checks and pay his/her bills. With
the representative payee system, he said, the individual still
maintains the power to take that control back from the
representative payee.
8:53:57 AM
VICE CHAIR GATTO asked if the only option is to "pile agency
upon agency" or if Mr. Fink is endorsing the creation of a new
agency.
8:54:35 AM
MR. FINK, regarding Vice Chair Gatto's previous remark, said
there is a difference between someone who is not spending money
wisely, as perhaps in the case of purchasing magazines that
never get read, and fraudulent exploitation, where people come
in and, through means of deception and dishonesty, clean people
out who have diminished capacity. The latter is criminal and
puts the victims in untenable situations. He reiterated that
this is a growing problem. He said the Disability Law Center
and Alaska Legal Services don't have the resources and are
declining referrals from APS, so there are people who have been
"fleeced in some pretty significant ways" with no redress. He
said the district attorney in Anchorage has informed him that he
does not recall one financial exploitation case last year in
Anchorage. He said, "They are very difficult cases to
prosecute. Your victim by nature often is incapacitated or
incompetent to some degree; they don't make the best witnesses."
He suggested the legislature may want to address that issue.
MR. FINK said HB 399 addresses, in a real way, the civil remedy
for someone to be made whole who has been defrauded and is a
necessary function. He revealed that he is a fiscal
conservative who does not believe in creating agencies
unnecessarily, but he thinks this is a real need. He added,
"And I'm not advocating that just because it would be coming to
OPA. Wherever the committee or the legislature decides it
should go is fine with me, but it's something I think needs to
be done."
8:56:40 AM
VICE CHAIR GATTO asked Mr. Fink to estimate the fiscal cost of
the bill.
8:56:59 AM
MR. FINK said he is leery about [offering an estimate]. He said
the key question would be to ask how many civil fraud cases an
attorney can handle a year. He said he is looking for some
standards and guidance by contacting other state agencies and
national organizations to see what their experience is. He said
he would hate to say anything and then "be grossly
underestimated." Notwithstanding that, he said he initially is
thinking it would take perhaps two attorneys and "something
under $.5 million with staff and space." He reemphasized that
that is an unsupported number at this stage.
8:58:12 AM
REPRESENTATIVE GRUENBERG proffered that ultimately it may be
that the person who is the perpetrator finally declares
bankruptcy and nothing can be retrieved from the situation. He
said he thinks Mr. Fink's suggestion of gathering together the
various agencies to come up with the best solution to this
problem is an excellent one.
8:59:24 AM
MR. FINK thanked Representative Gruenberg. He said he saw the
bill last Friday, and he offered his understanding that the
governor's office would be setting up a meeting.
8:59:52 AM
REPRESENTATIVE GRUENBERG suggested that the Division of
Occupational Licensing also be included in the discussion. He
said, "Because one way you can get at these people is - we're
finding - when they don't pay their child support ... you pull
their licenses." He offered a list of licenses that can be
pulled.
9:00:12 AM
MR. FINK concurred.
9:00:20 AM
DAN McDOWELL, testifying on behalf of himself, said he is a
lifetime Alaskan born in the Territory of Alaska. He said his
father, who has lived in Alaska since the age of 19 is almost 80
and his mother is in her mid-70s, and they spent their entire
working lives in Alaska. He emphasized the importance of HB 399
[which is legislation primarily in response to the McDowell
family's situation]. Mr. McDowell told the committee that his
father has suffered from Alzheimer's and dementia for the last 6
years. When his father began having difficulty with his
finances, Mr. McDowell said, his mother took over, but she
experienced difficulties and didn't want to tell anyone in the
immediate family. She met a man from Colorado who is a distant
relative. The man had Mr. McDowell's parents sign documents,
telling them that he would set up a trust for the family. Mr.
McDowell described the man's systematic defrauding of his
parents' properties and finances and said the man took every
dime his parents had until they could not even fight back. His
father now lives in the Heritage House in Soldotna - an assisted
living home - and his mother lives on public assistance in a
senior center. He praised Representative Chenault and his staff
and Mr. Fink for their tireless efforts to help in this matter.
Mr. McDowell said his father is an honest man and was a self-
made millionaire, but is dying of a broken heart right now.
9:05:34 AM
MR. McDOWELL offered further details regarding the man from
Colorado and the steps he took to defraud the family. Mr.
McDowell expressed his appreciation for Representative
Gruenberg's questions and concurred with the idea of finding one
agency that can handle this situation, rather than duplicating
services in several agencies. Regarding the man from Colorado,
Mr. McDowell said, "I don't know if he's done it to other
Alaskans, but we're almost convinced that he has done it
certainly in the Lower 48." He asked for the committee's
support.
9:08:19 AM
MR. McDOWELL, in response to a question from Vice Chair Gatto,
said several attorneys looked at the case and said it is
absolutely criminal and winnable, but there is a lot of money
involved and the family cannot come up with the amount of money
necessary. He related further tactics used by the man from
Colorado to defraud the family. He mentioned OPA and Mr. Fink
and indicated that there may be an attorney now that will take
the case. If not, he said, he doesn't know what to do.
9:10:41 AM
REPRESENTATIVE GARDNER asked Mr. McDowell if he has any
suggestions on how to prevent defrauding of the elderly.
9:12:07 AM
MR. McDOWELL responded that his mother relied on the man from
Colorado because of her religion and what he said his was. He
said there is information available about seniors and fraud, but
it is difficult for seniors to separate the bad advice from the
good. He stated that a criminal who takes advantage of seniors
needs to be prosecuted to the full extent of the law, because
this is a criminal matter, not just a civil one. He added,
"This is an FBI-across-state-lines matter." Mr. McDowell said
that he loves his parents and, out of all the children in his
family, he has spent the most time with his mother and father,
but he was unaware of what was going on with his mother, because
the man from Colorado convinced her she could not talk to anyone
about what he was doing.
9:13:50 AM
REPRESENTATIVE GRUENBERG suggested that since the man from
Colorado talked to the mother on the telephone, it may be a wire
fraud case; therefore, he recommended that Mr. McDowell talk to
the U.S. Attorney.
9:14:16 AM
MR. McDOWELL said he supplied the FBI with information, but that
entity looked at the letters that the mother signed and said it
appeared to be a civil case. He offered his understanding that
if an attorney first looked at the case and sent a letter to the
FBI stating that he/she believes there is criminal wrongdoing,
then the FBI would get involved. He said he is asking the State
of Alaska if that is possible. He declared, "If you help us,
I'll make sure you get every darn penny back."
9:15:10 AM
REPRESENTATIVE GRUENBERG said if Mr. McDowell "put a little
money into a private investigator and ... had a small report
done," then an attorney could send a letter to the FBI.
9:15:43 AM
MR. McDOWELL reiterated that his funds are limited. He said he
has spent most of his savings taking care of his parents and
cannot even promote his own business right now. He concluded,
"But that's what I want to happen; I would love to see the FBI
get involved."
9:16:15 AM
BOB DREYER, Ombudsman, Long Term Care Ombudsman, Alaska Mental
Health Trust Authority, Department of Revenue, said the Older
Americans Act requires that each state have a Long Term Care
Ombudsman for the purpose of protecting and advocating for the
elderly. He said Alaska's own state statutes mirror that
requirement, further clarifying that the state's position is to
advocate for and protect the rights of Alaskans 60 years of age
and older. In response to prior testimony, he said the Long
Term Care Ombudsman office has the authority to issue subpoenas.
He offered his understanding that APS does not have that
authority, and he said he is not sure whether OPA does or not.
MR. DREYER confirmed that Mr. Fink was correct that the Long
Term care Ombudsman is represented by legal council that can go
to court on its behalf regarding exploitation cases. He said
the Long Term Care Ombudsman is currently working on a couple of
cases: one involves multiple guardianships appearing to be
exploiting the elderly, and another involves a person that is
providing personal services that border on physical therapy at
an exorbitant cost, without benefit of being licensed. He said
people 60 years of age and older who have money are being
targeted.
9:18:23 AM
REPRESENTATIVE GARDNER asked if there would be any benefit in
moving the function to OPA.
9:18:36 AM
MR. DRYER responded that, as has been previously mentioned, he
is concerned about the duplication of effort. He said he thinks
it would make sense to [house the function of the bill in the
Long Term Care Ombudsman office], because that would give the
elderly a "one-stop-shop place they can call with all their
concerns."
9:19:12 AM
REPRESENTATIVE GARDNER said that's a good point, because it is
already difficult for people to figure out what all the
different agencies do, and it seems like it would result in
another level of complexity to have "a different service
elsewhere."
9:19:41 AM
VICE CHAIR GATTO closed public testimony.
9:19:53 AM
REPRESENTATIVE GARDNER shared that her mother was a fiercely
independent person who had Alzheimer's, and it was a matter of
pride for her not have to acknowledge the need for help. She
said she doesn't know what the solution is but said it's clear
that something needs to be done. She said HB 399 would redress
a wrong, but the real issue is in preventing [abuse of the
elderly].
9:20:48 AM
VICE CHAIR GATTO indicated that there can be misunderstandings
between family members and in those cases it is better for the
elderly person to find independent advisors.
9:21:19 AM
REPRESENTATIVE ELKINS stated that he thinks the bill doesn't go
far enough. He said, "I personally would like to see a bill
that says to people who might be interested in defrauding
seniors that you better not do it in Alaska." He said he would
not like the bill moved out of committee today because he would
like to investigate how to "toughen it up a little bit and put
that message out."
9:21:52 AM
VICE CHAIR GATTO stated his understanding that the next
committee of referral for HB 399 is the House Finance Committee.
9:22:15 AM
REPRESENTATIVE GRUENBERG asked Ms. Wright what the wish of the
sponsor is regarding whether or not to move the bill out of
committee today.
9:22:27 AM
MS. WRIGHT said she would like to work on bill further because
there have been issues brought to attention that the sponsor had
not thought about. However, she said the sponsor would like to
see the bill moved out of the House State Affairs Standing
Committee and have that work done in the House Finance
Committee. She stated that this is the most difficult issue
other than child abuse in which she has ever been involved.
Regarding the previously mentioned case around which the bill
was formulated, she said the sponsor "tried everywhere to get
private attorneys to take this." She said Mr. McDowell searched
all through Anchorage, but all the attorneys approached wanted a
large retainer before they would even look at the case. she
said the sponsor wrote a letter to the Federal Bureau of
Investigation (FBI).
MS. WRIGHT noted that there currently is a case in front of the
U.S. Attorney that addresses wire fraud, and she stated her
belief that that's where this case will eventually wind up. In
the mean time, she said, "this gentleman from out of state needs
to be stopped from his further legal action." She said that's
why OPA became involved. She noted that Adult Public Assistance
was not interested at the time and she did not receive a return
call from the Long Term Care Ombudsman office. She explained
that she had to go with the person who responded to her and she
emphasized that Mr. Fink responded, understood the issue, and
visited the site of the McDowell home firsthand. She explained,
"Because these people, instead of living on public assistance,
should be enjoying their lives. ... If someone did this to me
it would be devastating. And that's why we're asking that the
bill pass out, and we will come to you and incorporate as many
ideas as what fits."
9:25:29 AM
MS. WRIGHT, in response to a question from Vice Chair Gatto,
said the bill sponsor has been out of town and will be present
in about a week.
9:25:36 AM
VICE CHAIR GATTO suggested holding bill to Thursday so that
Representative Elkins could have the time he had requested.
9:26:11 AM
REPRESENTATIVE ELKINS responded that he believes Ms. Wright and
Representative Chenault's staff are sincere when saying they
will address everybody's needs, and he is "comfortable with
that." He restated that the bill needs to send a stronger
message, but admitted he is not quite sure how to do that.
9:26:40 AM
REPRESENTATIVE GARDNER revealed that she used to work as a
guardian ad litem for OPA and has a tremendous respect for that
agency. Notwithstanding that, she said it seems that the thrust
of the bill should be with the ombudsman. She said if the Long
Term Care Ombudsman did not respond to the sponsor's request,
then that's appalling and needs to be addressed. She asked, "Do
you see a way to ... give them the responsibility that this bill
attempts to move to OPA?"
9:27:21 AM
MS. WRIGHT said it is certainly something that the sponsor would
consider. At the time, the only response was from OPA. She
said it is difficult to take care of a problem that has such an
immediate need when an agency does not respond.
9:28:09 AM
REPRESENTATIVE GARDNER restated her question and asked Ms.
Wright to consider it as a policy matter. She continued:
If the ombudsman can pursue actions without requiring
that the victim be under guardianship or be a ward of
the state - and for OPA they have to be made guardian
or conservator at some level - the ombudsman's office
can proceed without that. And it may be that people
are capable of taking care of themselves normally, but
a family member is defrauding them, and they're not
willing to act on their own, or something like that.
And I would hate to have to see them have a
conservator appointed to their affairs in order to
pursue action against somebody. That seems to create
a problem. And they could be resisting and fighting
and not have the choice, in order to pursue it.
MS. WRIGHT responded that Representative Gardner's point is well
taken.
9:29:05 AM
REPRESENTATIVE GRUENBERG said the committee is engaged in this
subject, but to do the job right will take coordination among
various agencies and a working group of legislators who are
willing to spend time on this issue. He indicated that this may
require a slower process than Ms. Wright may desire.
9:31:05 AM
MS. WRIGHT suggested she could host a meeting with all the
representatives in Representative Chenault's office, rather than
forming a subcommittee. She said she doesn't want the bill to
become too complex.
9:31:48 AM
VICE CHAIR GATTO stated that he has no intention of forming a
subcommittee and he suspects the committee will move the bill
today, but he encouraged Ms. Wright to contact the
representatives for input that can be passed along to the
hearing in the House Finance Committee. Vice Chair Gatto said
this is a dynamite issue and he wants the state to have the
ability to chase down the criminals. Without the ability to do
that, he indicated, the bill will have a very limited effect.
9:33:42 AM
REPRESENTATIVE GRUENBERG said he is interested in learning more,
but is happy to see the bill moved out of committee. He stated,
"This is a very, very important issue - far beyond one family's
problem, and ... because [the] Baby Boomers are coming up, this
is going to - in the next 20 years - multiply in importance."
9:36:05 AM
REPRESENTATIVE LYNN moved to report HB 399 out of committee
[with individual recommendations]. There being no objection, HB
399 was reported out of the House State Affairs Standing
Committee.
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at
9:36:38 AM.
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