Bail bonds dispute surfaces in resignation fracas
Posted May 24, 2013
Updated May 28, 2013
Raleigh, N.C. — When Rep. Robert Brawley, R-Iredell, resigned his post as a House Finance Committee chairman this week, his resignation letter aired a number of grievances with how House Speaker Thom Tillis was running the chamber.
One of the items on Brawley's list made an not-so-oblique reference to a long-running battle between two groups of bail bondsmen, a pair of state legislators, the Department of Insurance and the vagaries of legislative process.
Brawley wrote to Tillis that the legislature had passed "a bill giving a monopoly to the family of a Republican legislator. I am sure you know what I am referring to since all conversations I have had with anyone seem to lead back to you."
Speaking Friday, Brawley confirmed he was talking about a 2012 law that granted the N.C. Bail Agents Association the exclusive right to conduct continuing education courses for bail bondsmen.
"It violates our constitution," Brawley said, referring to a section of the state constitution that prohibits state-granted monopolies. House leaders thwarted his effort to repeal the measure earlier this year, despite the fact a Wake County Superior Court judge has barred enforcement of the measure.
Brawley said he never intended his resignation letter to become public and insists he was trying to dispose of the bail bonds issue without raising any ethical red flags for his colleagues.
"I was trying to take care of this issue without involving anyone else," Brawley said.
Last-minute legislation leads to lawsuit
In 2011, the state Senate passed a bill dealing with how much liability insurance people who held certain kinds of alcoholic beverage control permits needed to carry. For the better part of a year, it sat unnoticed in a House committee.
Then in the closing days of the 2012 legislative session, the House Insurance Committee gutted the measure of its liquor-related language and replaced it with a bill requiring that all bail agents in North Carolina be certified by and get annual continuing education courses from the Bail Agents Association.
Members of the committee were told by representatives of the association that there was no other company offering such training, and the Department of Insurance endorsed the bill.
However, had the measure gone into effect, it would have put the Rockford-Cohen Group, a private bail training business, out of work.
"They don't like the competition," said Lynette Thompson, the company's owner. The training bill cleared the state House and state Senate with little debate.
Thompson took the matter to court, and Judge Donald Stephens granted a preliminary injunction preventing the law from being enforced.
"The Court finds that restricting the teaching of bail bond continuing education and pre-licensing education to one private provider ... is not a valid exercise of the police power of this State, and it constitutes an unconstitutional monopoly in favor of a single company or provider," Stephens wrote in his ruling.
The case is now before the Court of Appeals.
Thompson said that one of the reasons the bill slid so quickly through the General Assembly was that it had the backing of two powerful lawmakers: Senate Rules Committee Chairman Tom Apodaca, R-Henderson, who controls the flow of legislation through his chamber, and Rep. Justin Burr, R-Stanley, a co-chairman of the powerful House Appropriations Committee and a fast-rising star within the Republican Party.
Both men are bail bondsmen, and both men have recused themselves from all votes relevant to this measure.
Burr's father, Phil Burr, is president of the Bail Agents Association, and it was his connection that Brawley targeted in his letter to Tillis. The younger Burr's great-uncle was on the board that founded the association, a nonprofit group, and IRS records show its board members are uncompensated.
"I do try to stay out of it," Justin Burr said Thursday, referring to bail bonds laws. "I recuse myself, unlike folks who might be insurance agents and serve on the Insurance Committee and vote on insurance bills. It's a little frustrating when someone makes an accusation like that and does it with no facts behind it at all. It's disappointing. I don't know what to tell you. I didn't introduce the bill to repeal the ethics laws."
Burr's comments were pointedly directed back at Brawley, who did file a measure to repeal a 2006-era ethics reform bill. Brawley does list his occupation as an insurance representative and is a vice chairman of the House Insurance Committee.
It is worth pointing out that lawmakers can have influence over legislation without voting on it.
"I didn't even know it was going on," Apodaca said this week when asked about the how the 2012 continuing education bill came about and pointing out that he has been excused from voting on all bail bonds bills.
However, emails obtained by the Rockford-Cohen group through a public records request and shared with WRAL News suggest that Department of Insurance officials at least consulted with Apodaca in advance of the legislation coming up.
"Rose: What is the status of Sen Apodaca on this matter? (I know you've had conversations following up on his inquiries.)" Insurance Commissioner Wayne Goodwin wrote to his legislative liaison, Rose Williams, on Nov. 1, 2011, well before the 2012 session.
Repeal effort sputters
Brawley served in the legislature for nine years in the 1980s and 1990s. He returned to the legislature this year, so he was not a sitting lawmakers when the continuing education bill passed.
Told about the measure this year, and its subsequent legal setback, Brawley set about to repeal the measure.
On May 15, a bill authored by Rep. Jeff Collins, R-Nash, dealing with making sure North Carolina insurance law comported with the federal Affordable Care Act came to the House floor. Brawley offered an amendment to Collins' bill, citing Stephens' decision and repealing the 2012 law. It passed with little debate or comment.
But a day later, Collins took the unusual step of recalling the bill, essentially nullifying the vote by which it passed, and asking that it be sent back to committee, where the bail bonding language was stripped out.
Collins said he took that steps to avoid "introducing controversy" into his bill.
"I don't understand the controversy because I'm not in the middle of it," Collins said this week. "Apparently, there are two warring groups of bail bondsmen."
Collins said he was told by "numerous" fellow lawmakers that the bail bonds amendment would draw unwanted attention to his bill.
"That needs to be fought out in a separate measure," he said.
Collins' measure is now in the Senate, without the repeal language attached.
Dispute raises other questions about continuing education
Brawley said "this is the only thing out there that I know of" when asked if he were going to take on any other bail bonds-related issues.
Thompson is adamant that the continuing education bill is merely one example of Apodaca and Burr using their clout on behalf of bail agents and themselves.
For example, she points out that both men have been excused from taking continuing education classes while they serve in the legislature.
"Just like Realtors don't, just like insurance agents don't, just like numerous folks since we're so involved in lawmaking and know current events," Apodaca said when asked about the exception. There are probably 25 industries to which such an exception applies, he added.
According to the Department of Insurance, a rule exempting insurance agents who were sitting legislators from the industry's continuing education classes was put in place in 1994. In 2001, regulation of bail bondsmen was put under the department's control. At the time, then-Insurance Commissioner Jim Long extended the same rules for lawmakers who were insurance agents to those who were bail bondsmen.
"Legislators who are licensed by the Department of Insurance are only exempt for the period of time in which they are serving in the General Assembly," Kerry Hall, a spokeswoman for the agency, wrote in an email.
Thompson argues that the law doesn't give the insurance commissioner, now Goodwin, the right to exempt bondsmen who are lawmakers from training. The department, she said, is doing a special favor for two lawmakers who can influence bills affecting its purview.
"It amounts to bribery," Thompson said.
If that's the intent, the plan doesn't seem to be working, at least not on all occasions. The Senate, and Apodaca in particular, pushed through a measure turning down the expansion of Medicaid in the state over Goodwin's express objections.
Hall said the department is merely following long-standing policy that was established before either Apodaca or Burr was a sitting lawmaker.
"The standing procedures have been followed," she said.