Rules on Reporting Settlements Against State Spark Conflict

Gray Davis revels in his image as a hands-on leader who is tight with taxpayers’ dollars.

But the Democratic governor appears less than interested in an issue that plagues California government--big settlements in lawsuits against the state, particularly against the Corrections and Transportation departments.

The Davis administration, apparently viewing five-figure settlements as chump change, doesn’t want to be bothered with the details of such cases.

The governor used his line-item veto to delete legislators’ language in the new state budget that would have forced all departments to provide details on all settlements of $10,000 or more. Davis called the $10,000 threshold “overly broad and duplicative.”

Instead, he inserted language saying that departments need only provide information on settlements of $400,000 or more. That policy has been in effect since July 1, the start of the fiscal year.

“Taxpayer money spent tracking every $10 paid out in a claim can be costly,” said Davis spokeswoman Hilary McLean. “The governor wants to strike a balance between the cost of tracking it and the need to keep track of the claims paid out by the agencies.”

Davis’ stand differs from that of his predecessor, Pete Wilson, himself something of a detail man.

Wilson’s last budget required that all state agencies prepare itemized lists of “all claims, judgments, compromises and settlement payments paid” and provide the accounting to the Department of Finance, the Legislature and the legislative analyst’s office.

The new administration’s “don’t ask, don’t tell” policy on lesser lawsuits conflicts with efforts by state Sen. Jackie Speier (D-Daly City) to combat on-the-job harassment of state workers.

She is pushing a bill--opposed by the administration--that homes in on lawsuits by state workers who claim sexual harassment and other job-related discrimination in the Corrections Department and Caltrans.

“We’re hoping they see the light,” Speier said of the Finance Department, which opposes her bill, SB 794.

Work-related lawsuits are “epidemic” in those departments, Speier contends. Corrections paid out more than $5 million to settle such suits two years ago; Caltrans spent almost $2 million.

Speier’s bill, which is awaiting an Assembly vote, would require that the departments file quarterly reports specifying the nature of claims--whether they are, for example, sexual harassment lawsuits. She also wants to know at which prison or office the problem occurred.

And she wants to know about any settlement in job-related cases of $10,000 or more.

“If you’ve got a cancer, you’ve got to deal with it,” Speier said. “I don’t think there’s the ability to audit the conduct if the standard is $400,000.”

Speier points to 63 settlements by the corrections agency in 1997 and 1998, many of which involved sexual harassment and discrimination claims brought by prison employees. Only four involved more than $400,000.

Under Davis’ standard, the Legislature would have received no information about the other 59 cases. Under Speier’s $10,000 standard, the Legislature would have received reports on 26 settlements.

Such information would provide lawmakers with the ability to identify problem facilities and employees, Speier said. That, in turn, would allow officials to provide more training and take enforcement action.

“It is important for us to have more direct oversight,” Speier said.

In a letter opposing the bill, the Finance Department cites a corrections agency estimate that the cost of providing the information would be $50,000 to $100,000 a year. The letter says, however, that the basis for the estimate “is not clear.”

“Further,” the letter says, “requiring department personnel to prepare and file six additional reports each year would create additional workload that could result in costs not contemplated in the budget.”

Under Davis’ standard, settlement details would still be public information. But the information no longer would be readily accessible.

“It’s rare that there are settlements over $400,000,” said Sacramento-area attorney Kathy Felch, who represents employees in suits against employers and is familiar with details of Speier’s bill.

Additionally, Felch noted, the Davis policy might restrict information about another issue that troubles some--amounts the state pays in private attorneys’ fees in such cases.