14 Probate Referees Flunk Tough New Test : Estates: Controller Kathleen Connell suspends them. She vows to raise standards for the appointive posts.

After imposing a tough new qualifying exam for probate referees, state Controller Kathleen Connell revealed Wednesday that 44% of the candidates seeking reappointment had flunked the test.

Connell said she was immediately suspending the 14 who failed to pass, including several veteran referees who had been evaluating estates for the state’s probate courts for decades.

After reviewing the qualifications of the existing referees, the controller said she had appointed an independent panel of lawyers and judges to evaluate referee candidates and eventually decide whether the appointed positions are needed at all.

“A probate referee may be a job without a need,” Connell said, noting that some appointees report income as high as $100,000 a year. Although appointed by the controller, referees are not state employees and are paid 0.1% of the value of the estates they appraise on behalf of the courts.

Meeting with reporters in her capital office, the controller said she was determined to raise the standards for the referee posts and to prevent abuses that have haunted the system under her predecessors.

Connell pledged to take politics out of the appointment process and will require all 162 referees in the state to sign a new conflict of interest statement, pledging that they will seek no campaign contributions for politicians from the attorneys, judges, executors and heirs with whom they do business. Under current law, referees can contribute no more than $200 to any candidate for state office and nothing at all to the controller.

Connell referred to sporadic scandals that have haunted the probate referee system under previous controllers.

In 1993, The Times reported that then-Controller Gray Davis--who has since been elected lieutenant governor--had appointed political allies and personal friends as well as relatives of campaign contributors and politicians to the part-time posts. Among Davis’ appointees were the son of then-Assembly Speaker Willie Brown (D-San Francisco), the daughter-in-law of one of his largest campaign contributors and spouses of labor leaders whose unions gave large sums to Davis campaigns.

The stories also pointed out that two appointees continued in their jobs even though they were spending large amounts of time out of state. One was a prominent Democrat who had moved to Maryland; the other was a politically well-connected accountant who was out of the country for months at a time, developing business interests in China. Both resigned.

Many of the appointees were able to pass a qualifying test after answering fewer than half the questions correctly. They were allowed to take the same test repeatedly until they passed.

In response to the disclosures, Davis took steps to change the system--creating a new qualifying exam and asking an appointed committee chaired by former state Atty. Gen. John K. Van de Kamp and ex-U.S. Education Secretary Shirley Hufstedler to evaluate candidates for the job.

In a June, 1994, letter to Davis, Van de Kamp and Hufstedler noted problems with the work done by a number of referees who were up for reappointment to new four-year terms. They complained that they had too little independent information to assess the candidates and “in a small number of cases were unable to say definitively whether the candidate was qualified or unqualified.”

On Wednesday, Connell was careful not to criticize Davis, a fellow Democrat and a potential political rival. Both have been discussed as possible candidates for governor in 1998.

The lieutenant governor’s chief of staff, Garry South, said, “The entire probate referee system was fully revamped” under Davis, including tougher tests, regular audits and screening by a nonpartisan panel. “By and large, the referees he appointed served the public extremely well at no cost to the taxpayers. The lieutenant governor, however, welcomes any further substantive improvements to the profession.”

Connell made it clear that she wanted to distance herself from appointment politics and was open to the idea of eliminating the jobs altogether if that is what her appointed panel should recommend. California, she said, is the only state in the country with a system of state-appointed probate referees.

Soon after taking office in January, Connell ordered a new, more demanding test and raised the minimum qualifying score to 75%.

Of the 162 probate referees, only about a fourth were up for reappointment this year. For the first time, Connell required all of those to take the qualifying tests again--just like new applicants for the posts.

Of the 32 referees who took the test last month, 14 failed to score high enough to qualify. Among those who flunked were two referees who were first appointed more than 30 years ago by then-Controller Alan Cranston, who went on to become a U.S. senator.

Six of the 20 referees first appointed by Davis failed to meet the new test standard. Those who failed to pass were all sent letters this week, advising them that they could no longer perform their duties as referees.

They were told that they could qualify for a future appointment by taking the test a second time, but that their combined scores on the two tests would have to average at least 75%.

Even those who passed the test will have to wait for their reappointment until Connell’s review panel decides whether the system should be continued.

In the meantime, Connell has ordered changes in the system for the remaining referees. For example, she wants to eliminate the possibility of referees’ farming out their estate work to others, while keeping a percentage of the fees for themselves--a practice she variously described as “skimming” and “fee splitting.” She said she would increase auditing of referee records to ensure that referees “actually do their own work” and provide full documentation of their appraisals.