In Economic Downturn, Registrar Kaprielian Proposes to Give State Jobs to Private Corporation
March 10, 2009
David J. Holway, NAGE national president, has called on the Massachusetts Office of the Inspector General to investigate a plan proposed by the Patrick administration that jeopardizes privacy rights, costs taxpayers money, and is an example of the high cost of backroom deals. (Letter to the Inspector General)
The Patrick administration’s plan awards a contract to American Automobile Association, a Rhode Island-based company, to distribute and process drivers’ licenses and registrations, giving AAA access to personal information of every Commonwealth driver, including Social Security numbers and home addresses.
“We have two basic questions for the Inspector General that the RMV will not answer," Holway said. “First, where does the law allow a political appointee simply to hand public jobs to a private company? Second and importantly, where's the evidence that taxpayers benefit from this action?”
The Registrar’s plan does not calculate the cost of protecting Massachusetts’ residents from identity theft. In fact, the proposal does not include a detailed cost/benefit analysis that shows taxpayers benefit under her plan. One state where AAA provides this service, Rhode Island, is suffering economic ills second only to Michigan.
Holway explained that the Office of the Inspector General said in 2004 that the state does not have legal authority to enter into contracts in the way in which it formalized its deal with AAA. In fact, the Patrick administration has filed legislation that would allow this deal even if the IG determines the contract process was flawed. (Inspector General's 2004 statement)
The Inspector General requires the state to “conduct adequate research to determine if the deal is legitimate…,” except in emergencies. According to Registrar Kaprielian, no such research was conducted.
However, the labor leader added, inherently governmental functions, like access to Social Security numbers, never should be placed in the hands of any private sector entity without an individual’s consent.
The NAGE president, a 35-year observer of state politics, believes something stinks with the AAA deal, a result of backroom politics. “The people who benefit from this deal sit on AAA’s Board of Directors and it reads like a who’s who list in Massachusetts politics and business.”
The Administration’s plan specifically benefits AAA, where the Board of Directors, according to 2009 filings with the Massachusetts Secretary of State, includes such political and business luminaries as Wayne Budd, Peter Meade, J. Michael Costello, and David I. Finnegan, among others. Taxpayers must pay AAA a membership fee to use the new service proposed by the Registrar of Motor Vehicles.
"Our fight here is twofold," said John Mann, president of Unit 1, Local 292. "We are bound to protect the jobs and benefits of our members, but as citizens of the Commonwealth, we also have a duty to protect the public trust.
"In these uncertain economic times, I don’t know how many people will be able to afford the luxury of maintaining auto club memberships, nor do I believe that state government should channel work to insurance company interested in creating VIP lounges to conduct state business. It just doesn’t pass the sniff test," he said.
Registrar Rachel Kaprielian, a former state representative, has proposed shifting the costs from the Commonwealth to consumers for a service to which they are entitled as taxpayers.
Kaprielian is paid $133,256 annually to oversee an agency with 1,000 employees and a $70 million budget despite lacking either managerial qualifications or prior RMV experience. The RMV is responsible for safety and homeland security, in addition to issuing motor vehicle licenses and registrations. An entry-level RMV customer service representative earns $27,927 per year.
“The perfect storm for this move began when the Registry began reducing hours of operation at RMV offices, decreased staff hours, and raised user fees,” explained Holway. “It is hard to believe the order of these events is coincidental, when three Republican governors who preceded this administration recognized the Registry produces revenue for the state and fully-funded its operations.”
Holway further explained that in addition to increasing fees for licenses and registrations, the Registrar has requested additional funding from the Legislature for the RMV, while reducing services the agency provides.
“I think we need to look closely at any proposal that calls for eliminating entry-level jobs, leaves upper-management unscathed, and requests an increased budget appropriation from the Legislature while reducing services,” said Holway.
Kaprielian’s previous efforts at reducing costs at the RMV have created public furor aimed at the RMV, including ending the practice of notifying licensees and registrants when renewals were due, an act that delayed the timely collection of fees by the state; and more recently reducing staffing levels and the numbers of hours Registry offices are open to the public.
Consumers who see an immediate advantage to renewing their registration at a local AAA office are unaware that staffing levels and RMV office hours have been reduced, while the number of licenses and registrations issued by the agency continue to rise.
AAA will have a strong incentive to target-market personal information to insurance companies, banks, financial services companies, and health organizations, many of which are represented on AAA’s Board of Directors.