PRETEXTING: GOVERNMENT STYLE

By Rick Johnson

On October 15, 2000, M. Michael Cooke, Executive Director of the Colorado Department of Regulatory Agencies, issued a report by the Office of Policy and Research entitled, Private Investigators, 2000 Sunrise Review.

This report is the Department's evaluation of the sunrise application for licensure of private investigators. At issue in this report and in the proposal for licensing, is whether licensing would "protect the public from potential harm, whether regulation would serve to mitigate the potential harm, and, whether the public can be adequately protected by other means in a more cost effective manner."

After 29 pages, the report essentially determines that private investigators are less significant to the health, welfare, and security of the people of Colorado than are hairdressers, barbers, guides, manicurists, outfitters, and plumbers.

In other words, you have to be trained, even bonded and/or insured, and licensed to poke around in somebody's hair; but you don't have to be trained, bonded and/or insured, and licensed to poke around in somebody's private life, financial affairs, or business interests. It wouldn't be cost-effective.

Ridiculous!

It should have taken a lot less than 29 pages to state that conclusion, but government is government, and paperwork is paperwork, and if there is any way to avoid taking on a responsibility, government and paperwork apparently have to be as complex, obtuse, and time-consuming as possible.

The report clearly acknowledges that "there are no formal education requirements for most private investigator jobs." I didn't know that there are any such formal requirements. If there are, the report doesn't identify them.

The report clearly acknowledges that "computers allow detectives and investigators to obtain massive amounts of information in a short period of time from the dozens of online data bases…."

The report clearly acknowledges that "the majority of the states and the District of Columbia require private detectives and investigators to be licensed…" and that "…some states have stringent regulations," California, specifically.

On the other hand, the report cites the opposition of unidentified former FBI agents who want to prevent the state from meddling in their now unencumbered turf and some unidentified small PI business operators who don't have and don't want to be compelled to purchase liability insurance.

Also in opposition is the report's contention that there haven't been enough complaints lodged against private investigators since the original 1887 PI licensing law was declared unconstitutional by the Colorado Supreme Court in 1977.

The report also labels the proposal for licensing a "scheme" (Interesting choice of words) that, in part, would prevent known felons from becoming practitioners and victimizing clients, and would provide consumer protection against inexperience, misconduct, and negligence by requiring minimum qualifications and experience.

So we are scheming to keep known felons out of the PI business and to protect the public from unqualified practitioners. What a terrible idea.

As to the lack of complaints, where do people complain… and under what basis does somebody file a complaint? Oh, of course, the report notes that people with complaints can resort to the courts. That's certainly a cost-effective alternative.

Discussing a letter of opposition to regulation by the 27 FBI agents mentioned earlier, the report delivers the following quote: "the proposed licensing bill is financially repressive and would be such an expense as to force many of these former FBI agents, who work in what may be described as a cottage industry, out of business."

It's interesting that former FBI agents would consider the probing of public and private lives to be a cottage industry, as if they were throwing pots in the basement for an upcoming arts festival.

In its analysis and recommendations, the report notes that, while no law currently restricts someone from setting up a PI business, it does prohibit misrepresentations and false statements. Good. As long as you don't say you aren't a felon, as long as you don't claim you never bungled a job, as long as you say you're insured without identifying it as auto insurance, rather than liability insurance, you can open up shop.

Here's the nut of the Department's conclusions:

"… a potential for public harm exists in the unregulated practice of private investigators, but the extent of this potential harm does not appear to reach a threshold sufficient to warrant regulation. The public can be adequately protected by other means in a more cost-effective manner. Not only is this occupational group relatively small in Colorado, but existing avenues of remedy, such as the FTC and the courts, are capable of addressing the most egregious cases of public harm, while the remainder are adequately handled by market forces, such as consumer choice and the reputation of practitioners."

By relatively small, the report identified investigators as numbering about 250 in Colorado. It says nothing about the potential size of the effected public group of individual and business clients.

My office alone has investigated thousands of cases for thousands of clients. Many are repeat clients, of course, but consider all of the clients served by all of the PI agencies in Colorado. And many of us have clients in other states, who ask for help in Colorado, including states where regulation and licensing exist.

The report speaks of "Market Forces" and "Reputation of practitioners." Is there some secret regulatory reasoning as to why those are enough for private investigators and not enough for hairdressers, manicurists, and guides?

What isn't stated clearly in the report is the Colorado Legislature's irrational fear, even loathing, of regulatory authority, and the companion intent by governmental agencies in Colorado to do whatever is necessary to avoid crossing the regulatory boundary that the Legislature has created.

In a word familiar to unscrupulous investigators, this report by the Office of Policy and Research is a pretext intended, not to fairly evaluate the need for licensing, but to establish a credible basis for denying licensing.

There ought to be a law.

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