Governor Ousts Auto Shop Regulator

Gov. Arnold Schwarzenegger has ousted the chief of a state office that regulates auto repair shops, shifting him into another job even though supporters credit him with tough enforcement of the industry.

Patrick Dorais headed the Bureau of Automotive Repair for 11 months, a time when one of his most high-profile inquiries centered on Caliber Collision Centers, a company that runs 38 auto body shops in California.

In December, Atty. Gen. Bill Lockyer filed a $50-million lawsuit against the Irvine-based Caliber and its subsidiaries, charging that they had defrauded customers by billing for services and parts that were not provided. The case is pending. In its own investigation, the Bureau of Automotive Repair moved to yank or suspend registrations of some body shops owned by Caliber and shared case files with local authorities and the attorney general’s office.

Advocates for the auto repair industry complain that the bureau has been overly aggressive in its enforcement methods, and some lawmakers have agreed. But consumer groups saw Dorais’ transfer as troubling.

“Look at what they did with Caliber -- that was really remarkable,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety. “They were taking on not only the small repair shops, but the big players ... and that was enormously courageous for the agency to do. We have the best Bureau of Automotive Repair in the country, and we have a lot to lose if their mission is compromised.”

With Dorais gone, a struggle is ensuing over his replacement. Consumer organizations fear the governor will tap a new chief sympathetic to the auto repair industry, and a coalition of industry groups and state legislators wants an appointee whose regulatory style is not as strict -- possibly someone from an auto repair business.

“I think they’re doing a good-to-fair job in serving the constituents,” said Sen. Liz Figueroa (D-Fremont), who chairs a legislative oversight committee that held a hearing on the auto repair bureau in January. “But the constituents are also the small business, the industry. And they haven’t been keeping that balance. It’s been making sure that the average person who has a complaint is taken care of.”

For Schwarzenegger, the choice is a sensitive one. Having cast himself as the “people’s governor,” he risks undercutting his populist message if he is seen as weakening an agency that fields 25,000 customer complaints a year. But Schwarzenegger is also a pro-business Republican who has promised to protect jobs in California -- and who counts as one of his advisors a critic of the bureau: Bob Hertzberg, the former Assembly speaker who is an attorney for Caliber. Hertzberg said in an interview that he has not discussed the automotive bureau with the governor.

“It’s always good with elected officials to not just listen to what they say, but to watch what they do,” said Lockyer. “So you want to see what kinds of appointments [the governor] makes, and that’s probably more revealing than just the press releases.”

Lockyer said that his Caliber lawsuit would move forward regardless of leadership changes in the auto repair bureau.

“Their decisions and their operation ... won’t affect our lawsuit,” the attorney general said. “We’ll continue to seek restitution and fines and to change business practices.”

The governor’s office said that Dorais was an appointee of former Gov. Gray Davis and that he is being replaced as part of a routine effort to fill the government with Schwarzenegger’s people -- a prerogative of any new governor. Dorais was moved to the state Bureau for Private Postsecondary and Vocational Education.

Of the 22 political appointees who serve within the Department of Consumer Affairs, which includes the auto repair bureau, Schwarzenegger has removed two: Dorais and the former director of the department, Kathleen Hamilton.

A brief e-mail message that Dorais sent to his staff of 550 announcing his departure last month was posted on the website of the Automotive Repair Coalition, an industry group, under the title “What’s Hot.”

Dorais could not be reached for comment. He worked at the bureau for nearly nine years in jobs that included chief, deputy chief and interim chief.

At issue is the future of a consumer protection bureau that can provide substantial restitution to customers who’ve been wronged. Testifying before Figueroa’s committee in January, Dorais said the bureau returns more than $5 million a year to consumers in rebates, refunds, adjustments to bills and additional repair work.

Proponents credit the bureau’s enforcement efforts with cutting consumer complaints in California by more than 65% over the last 20 years -- even though the number of auto repair transactions has climbed from 15 million to 25 million per year, according to Shahan.

“He was doing his job and he was doing it effectively, and he wasn’t letting schlock operations slide,” said state Sen. Jackie Speier (D-Hillsborough). She said she hoped that Dorais was not removed because of his treatment of Caliber. Speier said that “if in fact this is an effort to accommodate Caliber Collision ... who has been under great scrutiny by both [the Bureau of Automotive Repair] and the attorney general’s office ... then I would be very disappointed.”

Caliber’s chairman and chief executive, Matthew Ohrnstein, said in an interview that the company will not make known its views on who should lead the bureau. In any case, he said, “Nobody’s asked.”As to the bureau’s treatment of Caliber, Ohrnstein said, “I don’t really have an issue with the people. You need to separate the people from the regulations. The regulations need to be more current for the 2004 business world.”

He also said that the company is “disappointed” that Dorais left. Coming at a time when the company hopes to resolve its dispute with the state, Dorais’ departure creates a vacuum at the bureau, he said.

“We intend to be a player in the collision repair business for many years to come, and we certainly have an interest in the direction that our regulator goes -- and the leader of this regulator -- and we endeavor to be compliant with the regulations,” Ohrnstein said. “We would certainly like to have a very positive working relationship with whatever direction the [bureau] leadership goes.”

The bureau has drawn complaints from industry groups and some lawmakers who contend that its approach is unfairly punitive. Within this camp, opinions differ about what should be done. Some call for transforming the bureau into a board that would include industry representatives, thus diluting what critics see as its zealous consumer focus. Others want the governor to consider appointing as the new chief someone from the industry.

“I wouldn’t be opposed to someone who has actual technical experience and who maybe owned a couple of smog shops,” Figueroa said. “I know there might be some criticism that it’s not someone who necessarily sees it from the customer’s perspective, but I think you can have a balance. You can do both.”

Assemblyman Rudy Bermudez [D-Norwalk] said, “They (the bureau) haven’t addressed certain complaints and they’re too aggressive.”

Of Dorais’ reassignment, Bermudez said, “It’s a positive step forward. The governor now has the ability to bring in a new person with a fresh attitude toward consumer protection.”

Before the Schwarzenegger administration replaces Dorais, it wants to hire a new consumer affairs director -- an appointment that may come in the next few weeks, said Fred Aguiar, a cabinet secretary who heads the State and Consumer Services Agency. Then, the administration will look for an auto repair bureau chief who is “able to communicate with the industry,” Aguiar said. He added that “there’s got to be a balance here.”