One of the six ballot measures Washington voters will consider this year is Initiative 1501. The measure is being promoted as a way to protect seniors and other vulnerable individuals from identity theft and fraud. However, the substance of I-1501 involves altering the state Public Records Act (PRA) for the benefit of the Service Employees International Union (SEIU).
While I-1501 modestly increases penalties under state law for identity theft in certain circumstances, federal law already provides penalties for identity theft that exceed those proposed under the initiative. Additionally, I-1501 attempts to increase the financial damages available to plaintiffs in civil cases regarding consumer fraud, but the initiative’s poor drafting is likely to make the implementation of the added damages unworkable.
The measure also makes changes to the PRA that would prevent state-paid individual provider home care aides (IPs) and family child care providers from being informed of their recently recognized constitutional right to choose for themselves whether to pay union dues or fees. The measure is funded entirely by the SEIU, which represents both groups, and comes after two years of legal and legislative fights in which the union has sought to prevent the Freedom Foundation from contacting these workers and informing them of their constitutional rights.
In the process of curbing public records access, I-1501 would limit, in a potentially unconstitutional manner, journalists’ ability to use public records. It would also prevent SEIU-represented providers from using the only means at their disposal to communicate with each other about issues of common concern and prevent them from ever being able to decertify or change SEIU as their union representative.
The title for I-1501 generated by the state Attorney General that will appear on the ballot reads as follows:
Initiative Measure No. 1501 concerns seniors and vulnerable individuals.
This measure would increase the penalties for criminal identity theft and civil consumer fraud targeted at seniors or vulnerable individuals; and exempt certain information of vulnerable individuals and in-home caregivers from public disclosure.
Should this measure be enacted into law? Yes [ ] No [ ]
The political action committee (PAC) supporting I-1501 calls itself the “Campaign to Prevent Fraud and Protect Seniors.” Records filed with the state Public Disclosure Commission (PDC) indicate that the PAC is chaired by Adam Glickman, SEIU 775’s secretary-treasurer. So far, the PAC has received $1.4 million in cash and in-kind contributions from SEIU Local 775 and Local 925, the measure’s only financial backers.
The text of I-1501 is divided into 13 sections. Sections 1, 2, 4 and 7 consist of non-binding intent language primarily about the importance of protecting “seniors” and “vulnerable individuals,” as those terms are defined by section 3. Section 9 directs the Department of Social and Health Services (DSHS) to engage in a non-binding study. Sections 12 and 13 are both technical in nature and have to do with how the law is interpreted.
The remaining substantive sections can be divided into three categories. Section 5 addresses criminal penalties for identity theft, section 6 deals with civil penalties for consumer fraud, while sections 8, 10 and 11 have to do with changes made to the PRA.
Under current state law (Chapter 9.35.020 RCW), identity theft is defined as knowingly obtaining, possessing, using or transferring a means of identification or financial information of another person with the intent to commit a crime. If the perpetrator “obtains credit, money, goods, services, or anything else of value” exceeding $1,500, it is considered a class B felony. State law (Chapter 9A.20.021 RCW) establishes that the maximum penalty for a class B felony is 10 years in prison and/or a $20,000 fine.
If, however, the perpetrator engaging in identity theft obtains less than $1,500 in value, it is considered a class C felony, punishable by up to five years in prison and/or a fine of $10,000.
Section 5 of I-1501 establishes that, when an individual engages in identity theft and “knowingly targets a senior or vulnerable individual,” it is considered a class B felony, regardless of the amount involved. Consequently, the practical effect of the change is to establish that identity theft targeting seniors or vulnerable individuals involving less than $1,500 is bumped from a class C felony to a class B felony. If the amount is over $1,500, it makes no difference whether the perpetrator intentionally targets a senior or vulnerable individual; the offense is already considered a class B felony no matter the victim.
I-1501’s advocates contend the steeper penalties for engaging in certain kinds of identity theft would have some kind of deterrent effect. However, there are two reasons to believe the minor penalty change in I-1501 would have little to no effect on the frequency of identity theft.
First, federal law sets penalties for identity theft that are substantially higher than both current state law and I-1501. Congress made identity theft a federal crime in 1998 with the passage of the Identity Theft and Assumption Deterrence Act. The law provided for a 15-year maximum prison sentence for perpetrators of identity theft (up to a 30-year maximum in certain circumstances). Congress further strengthened federal identity theft laws in 2004 with passage of the Identity Theft Penalty Enhancement Act, which added a mandatory two-year prison sentence to existing identity theft penalties for “aggravated” cases in which the compromised information is used in connection with other felony crimes. Finally, in 2008, Congress passed the Identity Theft Enforcement and Restitution Act which, among other things, gave federal courts jurisdiction over cases of identity theft in which the victim and perpetrator both live in the same state. Previously, federal courts only had jurisdiction in interstate cases.
Consequently, even the enhanced penalties for identity theft that I-1501 would establish under state law are well below the maximum penalties prescribed by existing federal law. As such, I-1501 is likely to do little to deter would-be identity thieves.
Second, even increasing identity theft penalties would likely have minimal effect because of the difficulty involved in successfully identifying, apprehending and prosecuting identity thieves. The U.S. Department of Justice’s (DOJ) Office for Victims of Crime noted in 2010 that 38 percent of identity theft victims “never informed anyone of their victimization.” Those who do report it generally approach their financial institutions rather than law enforcement. Consequently, a 2007 paper from the DOJ’s National Institute of Justice pointed out, “Of the estimated 9.3 million individuals victimized in 2004, an estimated 9 million cases never made it to the criminal justice system.”
A 2014 report from the Federal Trade Commission indicates that, of the 371,000 identity theft complaints the agency received in 2012, only 73,578 of the complainants also contacted law enforcement and filed a police report.
Of the cases reported to law enforcement, very few are ever solved. The National Institute for Justice paper also cited surveys finding that, “on average, law officers surmised that only 11 percent of identity theft cases received by their departments are solved.”
Even if I-1501 meaningfully increased penalties for identity theft, the effectiveness of the stiffer penalties would be dramatically undermined the by difficulty of bringing perpetrators of identity theft to the point of facing a penalty.
In section 6, I-1501 provides,
(2) Any consumer fraud that targets a senior or vulnerable individual, as defined in RCW 9.35.005, is subject to civil penalties of three times the amount of actual damages.
(3) This section creates no new cause of action. This section increases penalties where a plaintiff proceeds under any existing cause of action under statute or common law and successfully proves that he or she was victim to consumer fraud that targeted him or her as a senior or vulnerable individual.
While not objectionable in itself, section 6 could easily amount to very little because of poor drafting. Rather than modify an existing statute, section 6 is listed as a new, standalone section of law. As such, it does not automatically fit into the framework of any existing statutes, which presents several problems.
First, I-1501 nowhere defines the term “consumer fraud.” Additionally, there is no cause of action specified in the initiative, meaning there is no standard for when a person could bring a civil lawsuit seeking the treble damages specified in section 6. In order to be workable, the definitions, cause of action and other important technical details need to be specified elsewhere. Because such details are not specified in I-1501, the Office of the Code Reviser would have to choose where to integrate section 6 into current law. But it’s not clear that section 6 fits properly with any other section of law.
For instance, if section 6 is meant to be paired with Chapter 9.35 RCW, the statute governing identity crimes, then it could conflict with the civil penalties already specified in current law and left unchanged by I-1501. Again, the fact that neither I-1501 nor Chapter 9.35 RCW defines “consumer fraud” adds another layer of complication in trying to determine when someone could seek treble damages in a civil suit.
Another potential statute for section 6 to be paired to is Chapter 19.86 RCW, the state’s Consumer Protection Act. Even that chapter fails to define “fraud,” however, much less “consumer fraud.” Additionally, the statute already permits treble damages to be awarded in civil cases under certain circumstances. Its provisions do differ somewhat from section 6 but, since I-1501 does not change the language of the Consumer Protection Act, section 6 would not be easily integrated with existing language on civil penalties in Chapter 19.86 RCW.
Lastly, the statute dealing specifically with various types of fraud, Chapter 9A.60 RCW, only establishes criminal penalties and contains no civil cause of action. It, too, fails to offer a definition of “consumer fraud.” Because section 6 also provides no mechanism to bring civil suits and just establishes damages, it would be effectively inoperative if paired with Chapter 91.60 RCW.
As a result, the drafting of section 6 likely means that it would, at best, be unclear or subject to significant litigation and, at worst, meaningless or unworkable.
If the identity theft and consumer fraud provisions of I-1501 are lacking, it is likely because they serve merely as a smokescreen to obscure the initiative’s primary purpose — to change the PRA in such a way as to allow SEIU to control the flow of information to state-paid home care aides and family child care providers. Properly understanding I-1501 requires understanding the history behind the measure.
The state pays 35,000 individual providers (IPs) to provide home care services to Medicaid-eligible disabled and elderly persons. In 2001, SEIU successfully passed Initiative 775, which set up the framework for SEIU to unionize IPs. After the union’s formation in 2002, the state and union required all IPs to pay dues to SEIU 775 and the state automatically deducted dues from IPs’ pay. In 2006, SEIU 925 successfully implemented a similar legislative scheme to unionize the approximately 7,000 home-based family child care providers serving low-income families receiving state Working Connections benefits.
Although paid by the state, both groups are technically employed by their clients and, for legal purposes, are considered public employees “solely for the purposes of collective bargaining.”
However, in its 2014 Harris v. Quinn decision, the U.S. Supreme Court denounced this type of union arrangement as a money-making “scheme” and ruled it was unconstitutional to force “partial-public employees” like IPs and family child care providers to pay union dues or fees against their will.
Consequently, in July 2014, the Freedom Foundation requested from DSHS the list of IPs, which is disclosable under the PRA, in order to inform them directly of their new options regarding union membership. But rather than turn over the list, DSHS delayed the release of the records long enough to allow SEIU 775 to file a lawsuit seeking to block its release (SEIU 775 v. DSHS and Freedom Foundation, Case No. 46797-6-II).
A Thurston County judge ruled in October 2014 that, as the Freedom Foundation contended, the list was disclosable under the PRA. The union appealed the decision.
SEIU 775’s efforts to “(keep) workers in the dark about their rights” drew the condemnation of former state Attorney General Rob McKenna, who described the union’s lawsuit as “weak,” “unseemly,” “a stalling measure” and “silly.”
Having lost the first round in court, SEIU 775 turned its attention to a stealthy attempt to simply re-write the PRA in its favor during the 2015 legislative session.
Touted as a measure to protect Department of Corrections (DOC) workers from retaliation, SB 5678 was introduced by three Republicans and a Democrat in the state Senate. A companion bill, HB 1349, was introduced by Rep. Sam Hunt (D-Olympia) in the House. While Teamsters 117, which represents DOC employees, took point lobbying for the bills, SEIU was nowhere to be seen, at least publicly.
The Freedom Foundation mobilized against both bills, which would have done nothing substantive to protect DOC staff and were narrowly drafted to prevent specifically the type of activity the Freedom Foundation sought to use the lists for.
Documents obtained by the Freedom Foundation from the governor’s office via a public records request after the session confirmed SEIU 775 as the force behind both bills.
HB 1349 eventually passed out of the House on a party-line vote, with all Republicans voting against it, and died in the Senate. SB 5678 never made it to the Senate floor for a vote.
While its appeal dragged on in court, SEIU 775 made another run at the PRA during the 2016 legislative session. This time, the union jettisoned the stealth approach in favor of a higher profile pressure campaign to pass SB 6542, introduced by Sen. Don Benton (R-Vancouver). In an email sent to IPs on Feb. 11, SEIU 775 pulled out all the stops in its attempt to make the situation sound as dire as possible and get caregivers to contact the Legislature in support of the bill.
SEIU 775 neglected to mention, however, that the vast majority of IPs “personal contact information” is already exempt from disclosure under the PRA. The Freedom Foundation is seeking names and birthdates, which are the only two pieces of information not exempt from disclosure.
Additionally, despite the PRA exemption, Article 5.1 of the collective bargaining agreement requires the state to provide SEIU 775 with monthly updates of all IPs’ personal information, including not just names, but date of birth, physical and mailing addresses, email addresses, phone numbers, marital status, language preference and even Social Security numbers.
The Freedom Foundation again blew the whistle on SB 6542 and it died in the Senate without receiving a hearing.
In another setback for the union, a state appeals court ruled unanimously against SEIU 775 in April 2016 and upheld the trial court’s decision finding the list of IPs is disclosable to the Freedom Foundation under the PRA. The union is currently appealing the decision to the state Supreme Court.
Having failed twice in the Legislature and twice in the courts, SEIU 775 appears to have now turned to the ballot box for relief.
Implications of Public Records Act Changes
Sections 8 and 10 of Initiative 1501 would alter the PRA to bar the release of any information about IPs and family child care providers. However, section 11(d) of the measure allows for all detailed personal contact information of IPs and family child care providers to be released to “a representative certified or recognized under RCW 41.56.080,” the statute governing the unions that represent IPs and family child care providers. In other words, SEIU 775 and SEIU 925 — both private organizations — would have sole and unrestricted access to providers’ detailed personal information while groups like the Freedom Foundation would be barred from receiving even a list of names to try and inform providers of their constitutional rights.
Furthermore, I-1501 could have serious implications for journalists. Section 11 provides several exceptions to the categorical bar against releasing information about providers, including when “information about specific public employee(s) is released to a bona fide news organization that requests such information to conduct an investigation into, or report upon, the actions of such specific public employee(s).” However, I-1501 does not define the term “bona fide news organization,” meaning the issue would have to be determined through litigation, with uncertain results. Quite conceivably, any number of legitimate but unconventional news sources (blogs and online news websites, magazines, radio show hosts, etc.) could ultimately be prevented from investigating the activity of public employees due to I-1501.
Even if the definition of “bona fide news organization” was interpreted broadly by the courts, section 11’s strict limits on journalists’ use of the information could constitute an unconstitutional “prior restraint” of First Amendment free speech rights. If passed, I-1501 would have the dubious distinction of being the first law in Washington state to limit the ability of the press to use public records.
Lastly, the PRA changes would block providers from communicating with each other and would effectively cement as permanent SEIU 775 and 925’s current monopolies on the representation of IPs and family child care providers.
Both IPs and family child care providers are scattered in homes around the state, with no common workplace or means of communicating. Under current law, groups like the Eastern Washington Family Child Care Association have been able to obtain lists of providers under the PRA and use them to keep providers up to date on issues of common concern, like the Department of Early Learning’s increasing regulation of the child care industry. Their ability to communicate has already been hampered, thanks to SEIU’s litigiousness against its own members, but it would be permanently shut down under I-1501.
One consequence of preventing providers from communicating with each other would be to make it impossible for them to ever decertify SEIU as their bargaining representative or change to a different union. Current collective bargaining laws already make the process nearly unmanageable. For instance, at least 30 percent of the state’s 35,000 IPs must sign a petition calling for an election before the Public Employment Relations Commission will hold a vote in which a majority of IPs could choose to change unions or decertify. The task of gathering so many signatures would be hard enough for IPs desiring a change even with access to a complete list. Under I-1501, it would be impossible.
The initiative’s backers may contend these consequences are outweighed by the interest of protecting providers’ privacy. However, the PRA (Chapter 42.56.250 RCW) already protects the vast majority of caregivers’ personal information from disclosure, including: residential addresses, residential telephone numbers, personal wireless telephone numbers, personal electronic mail addresses, Social Security numbers, driver’s license numbers, identicard numbers, and emergency contact information. Furthermore, the PRA (Chapter 42.56.070) also exempts lists of names and birthdates from disclosure if they are being requested for a “commercial purpose,” meaning that businesses could not access such information to use in marketing, advertising or solicitation.
Obtaining a list of names and birthdates does not provide sensitive information in itself, but would allow the Freedom Foundation to match the list against other publicly available sources, like the state voter registry, to look up providers’ mailing addresses. If a provider’s address is not already publicly available from other sources, it will not be possible for it to be discerned from simply a list of names released under the PRA. Consequently, the risk of the records being helpful to engage in identity theft or related activities is relatively low.
Much has been written about the causes of identity theft and ways to prevent it. In 2010, the Office for Victims of Crime noted some of the common sources of identity theft: “…a lost or stolen wallet, pilfered mail, a data breach, a computer virus, phishing, a scam, or paper documents thrown out by an individual or a business and retrieved by a thief (dumpster diving).” No mention is made of public records. Similarly, when the President’s Identity Theft Task Force presented its report in 2008 with 31 recommendations for ways to address and prevent identity theft, limiting public records access and increasing penalties were both conspicuously absent.
Despite the poll-tested messaging being used to promote it, I-501 would do little to protect anyone from identity theft or other forms of financial crimes. Existing penalties for identity theft under federal law are more severe than those proposed for state law by I-1501, meaning the measure would not deter identity theft from occurring. The difficulty involved in successfully prosecuting perpetrators of identity theft means that even genuinely higher penalties may not have the desired deterrent effect. At the same time, the provision of the initiative seeking to increase civil penalties for “consumer fraud” is so vaguely written as to be potentially unworkable.
I-1501 is primarily about altering the state Public Records Act to prevent the state from releasing lists of the names and birthdates of SEIU-represented individual provider home care aides and family child care providers. As the measure’s only financial supporter, SEIU hopes to accomplish through the initiative process what it has been unable to accomplish through the legislature and the courts: prevent the Freedom Foundation from informing providers of their recently-acknowledged constitutional right to resign their union membership and cease paying dues.
In so doing, I-1501 would undermine the public’s access to government records and potentially unconstitutionally restrict the ability of the press to use public records. It would also prevent providers from communicating with each other and, in so doing, would ensure that SEIU remains the monopoly provider of union representation to these groups indefinitely.
As with the identity theft and consumer fraud provisions, the changes to the PRA would do little, if anything, to protect providers’ privacy.