Probate System Under Scrutiny Again : Politics: David A. Elder, an appointee of Lt. Gov. Gray Davis, resigns as a referee because of a possible violation of state law. The move adds fuel to reform movement.

A former assemblyman, named a probate referee in Democrat Lt. Gov. Gray Davis’ final days as state controller, resigned from his post last week after acknowledging that his appointment may have been in violation of state law.

David A. Elder, a Democrat who once represented Long Beach in the Assembly, stepped down as probate referee in Orange County because of a statute that bars anyone who has raised more than $200 for a candidate for partisan state office in the past two years from taking the part-time job evaluating estates for the courts.

Elder was an unsuccessful Democratic candidate for the State Board of Equalization last year and raised more than $20,000 for his own campaign, records show.

He said in an interview that he believed the law was never intended to apply to referee applicants who raised money for their own election but that “a strict reading of it suggests that I was appointed prematurely.”

Despite efforts over the years to take the politics out of the appointment of probate referees, Davis in his last year as controller appointed a number of politically well-connected individuals to the posts, including Elder and the son-in-law of former Lt. Gov. Leo T. McCarthy--both appointed just days before Davis left the controller’s office to become lieutenant governor.

Of the eight first-time referees named by Davis last year, most listed prominent political figures as references, controller’s office records show.

One new referee in San Diego County, a professional real estate appraiser, was a high school classmate and friend of former state Sen. Gary K. Hart (D-Santa Barbara); a Los Angeles lawyer and real estate investor listed Democratic gubernatorial candidate Kathleen Brown as a reference, and an Alameda County accountant had the enthusiastic backing of Oakland Mayor Elihu Harris and his wife.

Davis’ chief of staff, Garry South, said that all of the referees appointed in 1994 passed a revised written exam put into place last year and were deemed “well qualified” or “qualified” by an independent screening committee appointed by Davis.

“The bottom line is that all of these people passed muster,” South said.

He said that it was common for politicians to appoint people with whom they are connected, citing as examples ex-Gov. George Deukmejian’s selection of his former law partner, Malcolm Lucas, as chief justice of the California Supreme Court and Gov. Pete Wilson’s appointment of longtime political contributors to the University of California Board of Regents.

Davis instituted a number of changes in the way referees were named after The Times reported in 1993 on his appointment of a number of well-connected referees, including the son of then-Assembly Speaker Willie Brown, the daughter-in-law of one of Davis’ top contributors, his own chief deputy and relatives of labor leaders whose unions’ political action committees had contributed substantial sums to Davis’ campaigns.

While not directly criticizing her predecessor, the new state controller, Democrat Kathleen Connell, has vowed to further reform the system, ending what was once considered a last vestige of political patronage in state government.

When Connell for the first time required referees up for reappointment to take a new tough qualifying test, 44% failed. To pass, applicants had to correctly answer at least 75% of the questions. Under Davis, the passing grade on earlier tests had dipped to as low as 45.5%.

Connell also is requiring all candidates for reappointment who do pass the test to be interviewed by an independent panel. After testing and interviews, Connell reappointed only 16 of the 35 referees up for reappointment this year.

Because California is the only state in the nation to have probate referees, Connell is asking the panel to recommend whether the posts should be abolished.

Depending on the county, referees receive as much as $100,000 a year in fees from the estates they appraise, although most report that their gross incomes from the part-time probate work are less than half that amount.

Davis supporters see Connell’s assault on the probate referee system as an indirect attack on the lieutenant governor. Democrats Connell and Davis are seen as potential rivals for the governorship in 1998.

The political appointment of probate referees has a long history of controversy. In 1967, a newly elected state controller, Houston Flournoy, promised to end “a spoils system” in which appointments often were treated as political favors for politicians and contributors.

Flournoy instituted a qualifying examination and pushed legislation that prohibited referees from making any contribution at all to the controller and no more than $200 to any individual candidate for partisan office in any year.

Later, the law was tightened to require all newly appointed referees to sign sworn statements saying that they had not engaged in “prohibited political activity” in the two years before they took office.

Controller’s office records indicate that former Assemblyman Elder was sent such a statement to sign, but there is no record that he returned it.

Elder, who says he would have never signed such a statement, said that at the time of his appointment on Dec. 22 he relied on Davis’ decision to appoint him as proof of his eligibility.

Davis “knew that I had run for State Board of Equalization and I was raising money for my own candidacy,” Elder said.

South said that legal counsel for the former controller concluded that the law did not apply when the applicant was the candidate for office. In a letter accepting Elder’s resignation, however, Connell said that her legal counsel concluded that “the prohibitions appear to apply on their face to such situations.”

Former state Atty. Gen. John K. Van de Kamp said he reviewed Elder’s qualifications for the post as a co-chairman of Davis’ screening committee, and concluded that Elder “appears qualified, short of well-qualified.”

Elder, an audit manager for Long Beach, said that he also holds a real estate license. He passed the referee qualifying test in 1992 with a 74% score.

Another referee appointed in December was Dale Allen Jr., the son-in-law of then-Lt. Gov. McCarthy. Allen, a lawyer specializing in personal injury cases, is a former San Francisco police officer and the recipient of three commendations for valor.

Allen said he learned about the probate referee job through articles on the controversy over political patronage in the appointments.

He said he talked to his father-in-law about whether he should take the test because of concern that his appointment could prove an embarrassment to the politician.

McCarthy said that he personally called Davis. “I said, ‘Before he [Allen] goes to the trouble of taking the exam . . . the fact that he is my son-in-law, does that mean he gets eliminated even if he passes the exam and does it on the merits?’ ”

According to South, Davis told McCarthy that Allen could be considered but that there was no commitment that he would be appointed.