$1.6 Million in Real Estate : Pair Prosper by Providing Homes, Care for Retarded

California’s retarded people have been good to Edward T. and Marcia Dawson.

Edward Dawson receives a salary of more than $110,000 a year in his publicly funded business to house, treat and train the retarded. His wife is paid $60,000 more for her role in the operation.

The couple possess $1.6 million in California real estate, including a home in Palos Verdes Estates and a condominium in San Francisco. Much of this accumulation of real estate has been made possible by a controversial lease-back arrangement between the Dawsons and the corporation they operate.

While the couple have prospered, the state Department of Social Services has found that the quality of care provided to the retarded in their charge has been so poor that the Dawsons’ 13-home operation was placed on probation last fall.

Retarded clients in several of the Dawsons’ group homes have suffered from serious neglect and mistreatment during the last few years, including physical and sexual abuse, according to state licensing officials.

The terms of probation prohibit the Dawsons from opening any new facilities for 18 months and require that they provide better supervision for clients in their group homes and in their training programs or face loss of the group home licenses, according to state attorneys.

Meanwhile, the Dawsons continue to operate the programs, known as Social Vocational Services in Southern California and Developmental Services Assn. in the San Francisco Bay Area.

These two tax-exempt nonprofit companies--with combined yearly budgets of $14.8 million--raise questions about California’s publicly funded system for caring for the retarded.

Edward Thomas Dawson is a slender, youthful-looking man of 41 with strawberry blond hair and wide green eyes. People tend to like him. Even estranged associates who are disappointed in the direction Dawson’s business has taken seem to regard him fondly.

Dawson tends to be non-confrontational. He acknowledges that there have been shortcomings in his programs--even some serious ones--but he maintains that most of them were in the past and have been corrected. He appears to genuinely believe, despite the accusations of his critics, that he is doing a superior job in caring for the retarded.

Dawson entered the business of caring for the retarded when he was a 31-year-old graduate student in educational psychology at UCLA.

He founded Social Vocational Services as a nonprofit corporation in 1978 and became the president, treasurer and chief executive officer. Dawson’s program basically involves providing care for severely retarded and autistic people in small group homes and developing training programs that theoretically attempt to integrate the residents into normal community life, relying extensively on a fleet of vans to take the clients to various locations, mostly outdoors, where they perform such tasks as distributing advertising leaflets, cleaning up litter and doing yardwork.

Dawson receives $30 to $40 per client per day from the state for this out-of-home training program, which serves about 800 people.

Depending on the severity of the clients’ disabilities and problems, Dawson also is paid $18,000 or $35,000 per client per year by the state for home care in his 13 group homes throughout the state.

The facilities house about six residents each. Most of the residents in these homes have been transferred from state hospitals.

About the time Dawson was setting up Social Vocational Services, he met his future wife, who has a retarded son. Marcia Dawson was then working as a caseworker for the Harbor Regional Center, a private nonprofit agency with which the state Department of Developmental Services contracts to place clients in programs and homes for the retarded in the South Bay area of Los Angeles, where Dawson began his programs.

‘Service for My Clients’

“His ideas,” Marcia Dawson said of her husband, “were just what I was trying to find and develop as a service for my clients.”

Marcia Dawson subsequently went to work for Social Vocational Services, and she and Edward Dawson were married in 1984. Her retarded son lives in a Social Vocational Services home.

Edward Dawson got his doctorate in educational psychology from UCLA in 1982, as his business grew. In 1984, he founded Developmental Services Assn. in Northern California. It was originally formed as a for-profit corporation but was subsequently converted to nonprofit status.

Before opening Social Vocational Services and Developmental Services Assn., Dawson had dabbled modestly in real estate in Southern California. After going into the business of providing care for the retarded, Dawson made substantial investments in property up and down the state.

Between June, 1984, and May, 1985, Edward and Marcia Dawson purchased seven homes in Los Angeles and San Mateo counties, a condominium in San Francisco and their home in Palos Verdes Estates, according to assessors’ records.

The seven houses are leased by the Dawsons to Social Vocational Services and Developmental Services Assn. for $1,300 to $1,700 per month and used as group homes for the retarded. The houses remain in the Dawsons’ names as individuals and--while public funds are used to pay for the maintenance and, in effect, the mortgages--the equity building in the homes is the Dawsons’ personal property.

The condominium in San Francisco is leased from the Dawsons by Developmental Services Assn. for $1,400 per month. It is used, according to an accountant working for Dawson, as an office and a residence by the Dawsons and by a staff psychologist while they are on Developmental Services Assn. business in Northern California.

Such lease-back arrangements apparently are legal but frowned upon by many advocates for the retarded.

“You hear about things like that and you hope it isn’t true,” said Lore Radisch, who helped establish an Assn. for Retarded Citizens group home in Marin County in which her autistic daughter lives.

Radisch, a member of the Assn. for Retarded Citizens’ California governing board, said the organization’s 10 homes in Marin County are legally owned by a nonprofit corporation, not by private individuals.

She was also critical of the amount of Dawson’s salary.

“I didn’t know that anyone (providing care for the retarded) was making this kind of money,” she said. “To hear of this kind of thing just appalls me.”

Dawson contended that nonprofit corporations set up by parents of the retarded, such as networks of Assn. for Retarded Citizens homes, are fundamentally different from his operation because he has invested his own money in his firm.

Dawson argued that he is entitled to his six-figure salary and pointed out that, because his companies ran in the red in 1987 he loaned the operation $78,000 of his own money and arranged a $200,000 bank loan guaranteed by the Dawsons’ equity in the group homes.

“In order to draw a salary,” he said, “money has to come from someplace and somebody had to extend (it). . . . There’s a level of exposure. I have assumed that level of exposure in order to keep the organization . . . afloat.”

Dawson’s firms have begun paying back the $200,000 loan with 12% interest, and Raymond A. Hebrank, an accountant working for Dawson, said the operations should soon be in the black and have a bright financial future.

Hebrank also acknowledged that in the unlikely event that the companies were to go under, it would be up to Dawson to decide which debts to pay. In other words, with a $14.8-million annual budget, Dawson would be in a position to pay back his loans to himself before his companies went into bankruptcy.

Loan arrangements between Dawson and his companies have not been a one-way street.

Hebrank acknowledged that in 1986, Dawson borrowed $52,900 from Social Vocational Services. In addition, Dawson said he borrowed $9,500 from Developmental Services Assn. in 1987 to pay property taxes on his personal real estate. Hebrank said both loans have been repaid with 12% interest.

Meanwhile, Dawson said he pays $4.65 to $6.93 an hour to his direct-care workers in the homes dealing with retarded and autistic residents, many of whom have severe behavior problems and are sometimes violent.

There are no state regulations controlling how much operators of homes for the retarded may pay themselves, how much they must pay staff members or even how the public money is to be spent.

“The Department (of Developmental Services) doesn’t care and neither do we . . . as long as the care to the clients is still adequate,” said Gail P. Sass, associate director of the Harbor Regional Center.

“Some people are more economical and can run a facility more economically than others,” she continued. “If you can buy food in bulk and run your facility at less cost, more power to you.”

Gary D. Macomber, director of the state Department of Developmental Services, takes a similar view.

“My primary concern is that clients are getting the quality service that we are paying for,” he said. “If they (home operators) can be real creative in how they are operating and effect some other economies that are not detrimental to client care, then they may be able to do that. . . . (But) if the quality of care is not what we’re contracting for, it’s never OK.”

Dawson continues to operate even though the quality of the services provided by Social Vocational Services and Developmental Services Assn. has been under frequent and severe criticism by state officials and others over the last few years.

Before a settlement resulting in probation for Dawson’s group home operations, Developmental Services Assn. and Social Vocational Services faced formal accusations by the state Department of Social Services seeking revocation of the licenses of six group homes for the retarded in Los Angeles, Anaheim and San Mateo County.

An accusation dated Sept. 12, seeking revocation of the four Developmental Services Assn. group home licenses in San Mateo County, contended that a mentally retarded resident was sexually molested in January, 1987, by a staff member on parole for armed robbery.

“An allegation doesn’t mean it’s true,” Dawson said.

He acknowledged that the suspect in the alleged molestation was on parole from Illinois for armed robbery and that Developmental Services Assn. had not sent in his fingerprints to the state for a background check required by law.

Evidence Lost

Dawson said, however, that Developmental Services Assn. had checked the employee’s California job references for the previous 18 months and was satisfied with the results.

Social Service attorneys also contend that evidence in the molestation case was lost when Developmental Services Assn. staff members in San Mateo delayed reporting the incident to the police.

Dawson said that a Social Vocational Services administrator in Los Angeles had instructed a Developmental Services Assn. staff member by phone to gather additional information before making a police report because it did not appear clear “whether that was a reportable incident.”

He said contradictory statements had been made by the alleged victim of the molestation.

State accusations also listed a raft of other charges against Developmental Services Assn. and Social Vocational Services homes, including a complaint that in April, 1986, “a client was beaten, placed in a chokehold until he passed out, bound at the hands and ankles with a rope and left out in the garage for several hours.”

At the same home later that year, a staff member allegedly broke the nose and bruised the torso of a client who was not given medical treatment for two days, according to the accusation.

The document charges that staff members in two of the homes, through “lack of training and/or insufficient numbers, were unable to control these (violent) clients.” Marcia Dawson acknowledged that there were about “five incidents of a serious nature” in the Developmental Services Assn. homes in San Mateo but said such things caused a “shock within the agency.”

Edward Dawson argued that all the accusations are “not necessarily true” and denied that a “pattern” of client mistreatment exists in the homes.

“Given the fact,” he said, “that there are 72 people with behavior problems (in Social Vocational Services and Developmental Services Assn. homes), there will be problems in the care of these people. But I believe we are doing everything we can to prevent any problems.”

A state accusation seeking revocation of a Social Vocational Services home in Lawndale listed case after case of alleged neglect from 1982 to 1986. One of them: “On numerous occasions (from) . . . October, 1982, to November, 1985, Client No. 2 was allowed to wander away from the facility. On one occasion, the child sustained minor injuries when he was struck by a car. On another occasion, the child was picked up by the (California) Highway Patrol while he was roller skating on the freeway.”

“I don’t think it was on the freeway,” said Marcia Dawson, “I think it might have been on an on-ramp.”

“We are not allowed to lock the doors,” said Edward Dawson. “We’re supposed to supervise the children, (but) this particular child was very clever, and when a staff member was out of sight for a moment, he would dash out the door. They would maybe notice five seconds after he was gone and they would run out after him.”

Dawson voluntarily closed the Lawndale facility.

In addition to problems with Department of Social Services officials, Dawson has run into trouble with state health department inspectors, who are responsible for inspecting homes for retarded patients who need medical attention.

Health inspectors accused Social Vocational Services of negligence in the 1985 rape and impregnation by a staff member of a profoundly retarded resident in a home in Mt. Washington. The young woman was about six months pregnant before her condition was diagnosed in the spring of 1986, according to a state inspection report.

The case has similarities to the later San Mateo case involving the Developmental Services Assn.

Once again, inspectors accused Social Vocational Services of failure to obtain a required fingerprint clearance for the night attendant at the home, who police say had a criminal record. The staff member was subsequently convicted of rape and sentenced to prison.

Procedures Tightened

Dawson contended that the fingerprint clearance for the rapist had been requested as required and that, at any rate, he has since tightened up the fingerprint checking process.

Dawson has been repeatedly cited in the last few years for failure to seek criminal background fingerprint checks of his staff members, as required by state regulations.

In August the state Department of Social Services licensing office in Santa Ana accused Social Vocational Services of trying to circumvent the fingerprint checking process “in order to avoid the close scrutiny of our (licensing inspector),” according to an Aug. 8 intradepartmental memo.

In a March 10 Social Vocational Services internal memo obtained by state officials, Dawson’s employees were directed to avoid sending fingerprints to an Orange County licensing inspector who had challenged the corporation on the employment of several people with criminal records.

“We are having a great deal of trouble with Orange County licensing regarding the (training program) fingerprint cards,” said the memo. “There have been 11 so far that (license inspector) Ronalee Frost has called us on because of criminal convictions. . . . Please see that no cards are submitted to Ronalee Frost or Orange County Licensing as of this date.”

Social Vocational Services rescinded the directive in a May 26 memo and on June 7, Marcia Dawson wrote to Frost in Santa Ana to say the whole thing was a misunderstanding.

“I was told by our former group home program administrator that you did not like so many fingerprints going through your office,” wrote Marcia Dawson, “The intention was not, I believe, on any person’s part to circumvent the fingerprint clearance process.”

Edward Dawson reiterated that denial and explained that Social Vocational Services had been trying to process large numbers of prints belonging to training program employees.

He said Social Vocational Services was also seeking clearance to hire “people that had minor criminal records.”

Such potential employees, he said, might have committed “petty theft . . . five years before.”

“Licensing (officials in Orange County) didn’t want to process that number of prints,” said Dawson, “and they had problems with that number of appeals (regarding applicants with criminal convictions).”

Social Vocational Services also has run into trouble in Orange County over quality of care in its homes for the retarded.

In August, for example, it was cited for being unable to control a client in its Yorba Linda home who “poses a serious health problem because she continuously flicks urine” on other residents, “even at the dinner table.”

The inspection report says of Social Vocational Services:

“Licensee has not demonstrated the ability to hire, train or maintain qualified staff or to supervise facility operations. . . .”

“I believe we do have staff that is qualified to work with the clients,” Dawson responded.

In July, 1987, a Social Vocational Services home in the city of Orange was cited with nine pages of deficiencies, including dirty walls, a rotting floor molding, a dirty refrigerator, missing screens, dirty carpeting throughout the facility and feces on a chair and in a bathtub.

“If that was the case,” said Dawson, “it’s no longer the case.”

Dawson also has run into controversy in Orange County and elsewhere over his out-of-home training program for the retarded.

Although the Community Work Adjustment Program, as it is called, has been certified by the Tucson-based Commission on Accreditation of Rehabilitation Facilities, it has been severely criticized elsewhere.

Supervised Employment

Some of the components of Dawson’s program--such as those that provide jobs for clients who are considered relatively “high functioning”--have been praised. In these instances, clients are taken to jobs at fast-food restaurants or automobile dealerships where they are supervised by Dawson staff members.

But Dawson’s programs for the severely retarded, some of whom have serious behavior problems, have come under heavy fire.

In these programs, clients--who live in Dawson’s homes and elsewhere--are picked up each morning in vans and taken to various locations for training.

The clients are driven six at a time to such places as parks where they pick up litter, to residential neighborhoods to distribute flyers, to homes to do yardwork, to stores to learn to make purchases and to intersections to learn to cross streets. Theoretically, the program integrates clients into the community, rather than segregating them in training centers or workshops with other retarded people, as is done in more traditional programs.

In reality, say critics, the clients in Dawson’s van programs frequently spend much of their time simply being driven around in the care of poorly trained staff members.

Rated ‘Inadequate’

For example, a Social Vocational Services van program in Fullerton was rated “inadequate, poor,” last April in an official confidential report done by a private consultant for the Orange County Developmental Disabilities Center.

“(The) majority of program time is spent on van or in parks,” says the report, a copy of which was obtained by The Times.

The program, says the report, “utilizes isolated community settings; no interaction with non-handicapped were observed.”

The report quotes a staff member as ordering a client: “Don’t go over there. There are people over there.”

Staff turnover, says the report, is 133% per year and adds, “Staff could not state program goals.”

Dawson contended that the consultant who did the evaluation in 1988 changed the criteria from the year before, when the program was found satisfactory.

“Now that we understand . . . the evaluation instrument that was used,” he said, “we’ll change our program.” The Times observed similar conditions last year during two days spent with clients in Social Vocational Services van programs in Los Angeles County.

Clients from a Social Vocational Services home in Mt. Washington were driven to an intersection where staff members hurriedly walked them, one and two at a time, across the street, supposedly to show them how to safely cross with the light. On one occasion, a staff member led two clients across the street directly against the “Don’t Walk” light as a car stopped at a green light to allow them to pass.

In a South Bay area program, a Social Vocational Services staff member tried to show one or two clients at a time how to distribute advertising flyers to doorsteps, while the remaining four or five sat in the van waiting.

Most of the clients were severely impaired and some had to be watched constantly to prevent them from abusing themselves or from wandering away.

Tracy Faulkner, a community college student making $6.29 an hour, was in charge of the van in the South Bay, accompanied by an assistant being paid $4.25 per hour.

“There’s a lot of useless driving around,” said Faulkner, who later resigned. “When it rains, we have nothing to do. We usually stay in the van all day driving around.”

State health inspectors in San Gabriel made a similar observation about Social Vocational Services clients in a van program.

“On a particularly rainy day that may have been the case,” acknowledged Dawson, “but we’re very sensitive about the amount of time the clients are spending in the van, and we’re increasing the amount of work time and the amount of time integrated in the community.”