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Sacramento’s new sleazy cost-cutting measures for the California State Athletic Commission

By Zach Arnold | August 8, 2012

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At Wednesday’s California State Athletic Commission hearing in Sacramento at the HQ of the Department of Consumer Affairs, the CSAC board announced that DCA lifer Kathi Burns would continue as the interim Executive Officer. Burns, who has no experience in combat sports, is your classic bean counter from DCA. Take a look at her recent work history (via tax records):

She is stuck in a position by DCA to either succeed temporarily & get rewarded or, should everything go to hell, get punished by Denise Brown and Awet Kidane in Sacramento.

Burns noted that CSAC had around $96,000 in the bank at the end of July. You don’t say. She projected that CSAC would have $178,000 in the bank by the end of August and that the Fall time period is lean for business. I guess she didn’t know about the Andre Ward fight on September 8th in Oakland at Oracle Arena or about Daniel Cormier vs. Frank Mir perhaps happening in California as well.

Eugene Hernandez, the CSAC Vice Chairman, asked Kathi Burns to explain to the audience about the financial issues at CSAC. “How did we go from such dire straits of insolvency to money in the bank?” She simply replied, “I want people to understand the difficulty we’ve had over the last three months so that we remained solvent.” There was discussion about three office employees being let go and how former Executive Officer George Dodd helped saved money by not going to an arbitration meeting in Los Angeles.

“It was a very difficult task for us over the last three months.”

The atmosphere at the CSAC meeting was both antiseptic and, yet, tense. John Frierson, the CSAC Chairman, didn’t mention our site by name but was clearly talking about us when he described how he has been facing heat lately and that he’s not some old, senile stooge. You can read our two reports from May on him here and here. Frierson’s demeanor at the Sacramento hearing was of interest to us, especially since he didn’t follow DCA’s orders at the June 26th El Monte, California hearing to terminate George Dodd’s career as Executive Officer. Frierson was probably read the riot act. It’s important to note that he has a political relationship with Karen Bass, the former Assembly Speaker who is in the US House of Representatives. Her chief adviser a few years ago, Awet Kidane, is the #2 at DCA now.

At the Sacramento hearing, Kathi Burns made sure to note that the staff cuts have been significant but that the amount of work needed to be done has not decreased. Her tone and demeanor was that of an outsider to the fight game, as someone coming over from another agency to try to oversee a virtual exploding keg of dynamite that is CSAC with all of the various financial & legal issues facing the commission. It should be entirely noted that the continuance of Burns as E.O. means that DCA’s power grip over CSAC is in full force. There is no line of independence whatsoever.

She focused on talking about the budgeting process for the next two years in order to get cash in the bank at CSAC and stated that her goal is for the commission to be in a financial situation where everyone can look forward as opposed to trying to catch up to past debt.

As far as regulations are concerned for issues like testosterone & hand-wrapping changes, the paperwork hasn’t been processed yet to deal with those matters.

The situation at CSAC’s front office is as follows: there will only be four employees under DCA’s umbrella. The E.O., an analyst, and two office technicians (secretaries). Curiously, Kathi Burns brought up the idea of hiring temporary help. In the meeting materials for Wednesday’s session, the next two years of budgeting by DCA shows $0 in temporary help. In fact, George Dodd was criticized during his tenure for hiring temporary help. So, this is a u-turn by DCA.

While all of these happenings came across as mundane, there was a stinky bombshell dropped by Kathi Burns on behalf of DCA that should raise a lot of red flags. The Department of Consumer Affairs is now having inspectors, who are paid hourly by the state, sign what are called Volunteer Service Agreements. I had not heard of such a deal before, but I did discover that these kinds of deals are used at agencies like the California state library system (here), the Bureau of Land Management (here), and the Department of Water (here).

When Burns brought up the Volunteer Service Agreements, CSAC VC Gene Hernandez said that this raised a red flag for him because he is concerned that CSAC is being set up for legal action to pay back inspectors for the time they have worked under the volunteer agreements. She assured Gene that everything would be in the clear, including workman’s comp. Incredibly, she brought up an example of Chief Athletic Inspector Che Guevara volunteering to work weigh-ins at a recent event as an example of how the process will play out.

If the idea of DCA pushing inspectors to sign “Volunteer Service Deals” sounds Orwellian to you, that’s because it is. Given who is making this call and the reasoning behind the deals, it’s entirely plausible to envision a judge viewing this as an act of coercion by using contracts of adhesion. Why would a judge view a VSA as a contract of adhesion? Consider the huge disparity in bargaining power & rights between the state of California/Department of Consumer Affairs and an athletic inspector, who in theory is supposed to be protected by a union-negotiated contract but is being asked to basically sign away the ability to get paid by the state while working, under state law, as an intermittent state employee.

Why this all smells horribly pungent

Kathi Burns’ example of Che Guevara working as a volunteer came across as incredibly bizarre. Why? He’s the Chief Athletic Inspector. It’s a salaried position at the Department of Consumer Affairs. It’s not like he is getting paid overtime to do his job. He’s supposed to show up and work weigh-ins and handle duties in the field. That’s baked in the salary cake already.

All athletic inspectors at CSAC are considered intermittent state employees. This means, technically, that inspectors are protected by union-negotiated contracts with the state. This is why the inspectors who work as full-time state employees during the day get paid time-and-a-half as inspectors — because it’s considered overtime pay. The inspectors who don’t work full-time state jobs during the day aren’t paid time-and-a-half hourly — but they still are considered employees of the state of California during their activity as inspectors.

What the Department of Consumer Affairs is trying to pull on the inspectors is unbelievable. They are going to claim that they are cutting the amount of inspectors per show from 7-9 (or more) to 3-5 inspectors. Here’s the catch — they’re going to have 3-5 inspectors per show that are paid and have the rest of the inspectors working the shows on a ‘volunteer’ basis based on the ridiculous Volunteer Service Agreement (VSA) scheme. As you can imagine, this clearly would get smacked down in court if such a contract was challenged because state law says that the athletic inspectors are considered intermittent state employees during their time of service for CSAC at the shows. A VSA deal isn’t going to wipe that protection away if it’s challenged in court. But that’s exactly what the Department of Consumer Affairs is counting on here. If you’re not Mohammad Noor, Larry Ervin, or Sid Segovia, you’re likely not going to push back against the state because of the money you would need to spend in litigation. Most lawyers, on contingency, probably would not take on a case against the state if they think that the amount of money they would get in return would be peanuts. However, there may be labor attorneys out there who would be more than happy to challenge Sacramento and bust their balls.

Another interesting aspect of today’s new policy being revealed — many of the Volunteer Service Agreements used allow state employees to get reimbursed for travel costs, lodging, per diems, so on and so forth. Given that at least half of the inspectors work for the state full-time during the day, this means that the VSA agreements would not alleviate CSAC from any of the exploding costs they had with inspectors for in-state travel.

However, the real weapon here for the Department of Consumer Affairs with the Volunteer Service Agreements is the ability to create a climate a fear to foster retaliation and discrimination with the athletic inspectors. Retaliation for not signing a VSA. Discrimination for those who aren’t full-time state employees during the day versus the most-favored inspectors who get primary show bookings over others. It’s very easy to see a scenario where DCA sends the following message to an inspector, directly or indirectly: either sign the agreement and get booked for shows or else we’ll stop booking you for events.

Remember, DCA is the same Sacramento behemoth that destroyed the careers of former Chief Athletic Inspector Dean Lohuis & inspector Mike Bray when those two individuals decided not to go along with the viewpoint of California supervising deputy Attorney General Karen Chappelle & Che Guevara over what happened with the Antonio Margarito illegal hand-wraps in 2009. Lohuis and Bray saw their careers savaged by retaliation and we demonstrated this in our previous article talking about the tax records of those working for CSAC.

The Department of Consumer Affairs is already facing one lawsuit for retaliation & age discrimination from inspector Dwayne Woodard. The chances of them facing more lawsuits in the future for retaliation, thanks to these ridiculous Volunteer Service Agreements, is high.

Consider the following — since athletic inspectors are considered intermittent state employees while working shows on behalf of CSAC, they are supposed to be covered by insurance (workman’s comp) if they get hurt on the job. But what about medical cases involving doctors diagnosing health-related problems for inspectors due to the on-the-job stress from working at shows? How would the VSA deals handle workman’s comp and would the funds to pay for medical bills come from the state?

If you’re an athletic inspector and you are pressured to sign a VSA deal, you are supposed to be treated as someone with the same amount of rights as a state employee while working in an official capacity for CSAC. That means if you are forced by DCA to work shows for free as a ‘volunteer’ under the VSA deals, you more than likely have a legitimate complaint to make to the California Department of Labor in order to get reimbursed at the end of the year for the work that you’ve put in. When you work for the state, we’re talking about being covered by SEIU (Service Employees International Union) here. And if the state’s Labor department turns a blind eye, the federal Labor department will not. This is not a predicament the Department of Consumer Affairs wants to face… but apparently they have decided that no one will challenge their authority and raise a stink. I suspect they would lose that bet pretty quickly. There’s some irony in all of this, given that Governor Jerry Brown’s latest appointment to CSAC is Dean Grafilo. Grafilo is a former SEIU representative in Sacramento.

There’s also a unique, and final, angle to this new cost cutting policy by DCA for CSAC. When George Dodd was Executive Officer at CSAC, DCA did nothing to help him out in cutting costs. After they managed to get him out of his job, all of a sudden they are very motivated to make changes. One of those changes is to work with the State Personnel Board to have inspectors get paid a daily lump sum for work instead of getting paid hourly. Here’s the problem for the SPB and DCA — you can’t pull this stunt on the inspectors if they are considered, by law, to be state employees during their time of work. Even if someone isn’t a full-time state employee during the day, they are considered an intermittent state employee during their time of service as an inspector at a show. That means, by law, you have to pay the person as if they are working for the state as an employee. They aren’t independent contractors. Unless you change the actual state law, SPB & DCA is setting themselves up for a private right of action claim for a lawyer who is willing to take them on. Given the amount of enemies that have been made by the Department of Consumer Affairs, I’m sure there’s a few attorneys right now who would be interested in challenging Sacramento on this maneuver.

Bottom line — Kathi Burns as interim Executive Officer is not a surprise at CSAC. She’s DCA’s lynchpin here. DCA is exacerbating the real budgeting problems at CSAC and at their department by coming up with schemes like Volunteer Service Agreements that simply won’t hold up in a court of law or in front of a labor board. The fact that DCA’s legal department (Doreathea Johnson, Anita Scuri, Michael Santiago, Donald Chang) even think this kind of legal shenanigan would hold up to any kind of scrutiny is absurd. By pulling this stunt, DCA has managed to poison the well even further here and will continue to reward their most-favored inspectors while other inspectors will be told to go work shows for free. You can thank Denise Brown and Awet Kidane for the unneeded politicization of an already messed up situation at the California State Athletic Commission.

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