Two witnesses in a civil suit against the besieged School Insurance Program for Employees (SIPE) claim that David Cumberland, an attorney for SIPE, asked them to adopt his version of the truth in an attempt to cover up possible illegal acts, according to court documents.
Two state-licensed private investigators contracted by SIPE Alan Bond and Loren White were slated to testify in an invasion-of-privacy civil lawsuit this past February.
"[Cumberland] asserted privileges and stopped our testimony after he found out how we would testify," White and Bond stated in a memorandum they provided to the court in July, when White's testimony resumed. "This put us in the impossible position of choosing between our duty to testify truthfully and our duty to honor appropriately asserted privileges. He privately asked us to 'spin' our testimony (not be truthful) we said we would simply tell the truth."
"Any allegations that I told Bond and White to spin or not tell the truth are not true," Cumberland said in response to the investigators' claims.
He refused to comment further on the case.
How it began
In the past decade, pledges to reduce worker-compensation costs and prevent employees from ripping off the system have devoured funds earmarked for education and become a nightmare for some injured workers.
One such worker, Klare Richardson-Tunnell, was apparently trailed and secretly videotaped by an investigator paid by the district to weed out fraud. A teacher for 20 years, Richardson-Tunnell has endured two back surgeries as a result of work-related injuries.
On Oct. 25, 2003, Richardson-Tunnell celebrated her wedding at the Victorian Pitkin Conrow House in Arroyo Grande where Tony Esparza, working on behalf of Lucia Mar Unified School District, recorded the unsuspecting bride as she bid farewell to her guests and headed for her honeymoon in Cambria, and later as she and her husband sunbathed on their balcony (see "Fraud Busters" in the March 23 New Times).
"I did not trespass, and we will prove it," Esparza maintained.
In response to the alleged illegal surveillance, Richardson-Tunnell filed an invasion-of-privacy suit naming numerous public agencies and officials as defendants.
Faced with allegations of illegal videotaping and mismanagement, agencies and officials entangled in the controversy began to blame one another. SIPE terminated its 13-year relationship with Workers Compensation Administrators (WCA) of Santa Maria (a third-party administrator responsible for dispersing benefits) and, consequently, WCA is suing SIPE for wrongful termination.
Court documents and numerous depositions taken over the past seven months provide details of the controversy.
A law that took effect in California in 1999 California Code 1708.8 requires that an "articulable suspicion" of criminal activity must exist before investigators can secretly tail a worker who's seeking benefits due to an alleged injury.
Michael McGuire, SIPE's general manager and head of the Workers Compensation Task Force, testified that the 15 videotapes of Richardson-Tunnell "were taken without any articulable suspicion of fraud on her part."
SIPE also claimed that Esparza trespassed and invaded Richardson-Tunnell's privacy.
The primary argument now appears to be over who ordered the videotaping and whether the SIPE board and its attorneys conspired to conceal possible criminal activity.
Linda Larkins and Bruce White, co-founders of Santa Maria's WCA, testified that retired SIPE Board President Diana Larsen clued them in about Richardson-Tunnell's upcoming nuptials and requested that an investigator secretly videotape the event.
However, President Larsen testified that she had never heard of Richardson-Tunnell until after Esparza crashed the wedding. She said that WCA ordered the surveillance.
Even though the Richardson-Tunnell wedding surveillance implied that the teacher was in fact injured, Larsen received a tip in early 2004. According to the informant, Richardson-Tunnell was turning and twisting as she performed karaoke at a few Arroyo Grande night spots, so claim administrators sent investigators to check out the bars and to again covertly videotape Richardson-Tunnell, this time in front of her home.
The tip, however, turned out to be another dead end. Though Richardson-Tunnell did in fact twist and turn a few years earlier, her injury had forced an end to her karaoke performances.
The alleged cover-up
In the middle of 2004, private investigator Bond told the SIPE board that Esparza had committed a crime by trespassing at Richardson-Tunnell's wedding. Bond advised the board to furnish authorities and Richardson-Tunnell with the facts.
"[The alleged trespass] became more of an issue after Mr. Bond talked to me about it, and said that it appeared that Mr. Esparza had gone into the wedding when he should not have been allowed to videotape that wedding, and that there may have been a problem with the law at that point," Larsen said, according to a deposition of a conversation she had with Bond in spring 2004. "He was concerned with the fact that the tape had not been turned over to her attorney with all the other tapes."
In March 2005 18 months after the alleged trespassing and illegal videotaping Richardson-Tunnell was given copies of the controversial tapes. In an October 2005 memorandum, titled "Potential Criminal and Regulatory Liability," SIPE notified the San Luis Obispo County District Attorney's Office of the alleged trespassing. Arroyo Grande police were also notified. However, due to the statute of limitations, it was too late for police to act on the information.
SIPE Board President Larsen testified that, on the advice of her attorney, she kept the trespass under wraps.
Bond and White both claim that they were asked to spin the truth regarding when the investigation into the trespass ended.
According to investigator White's testimony, SIPE attorney Cumberland asked Bond to adopt his interpretation of the facts.
"Mr. Cumberland said the reason the situation wasn't reported when there was a suspected trespass was that Diana Larsen simply needed more time to look into the matter," White added.
"There are people that believe there is no absolute truth it's what you make it," said John Messer, an attorney contracted with SIPE. "The idea that the truth is ultimately malleable and the contradictions that come up in these SIPE and WCA cases 'That's my truth, and this is your truth' is a noxious notion. ... It is wrong and ineffective to shade testimony and lie about the truth as you know it."
Who's paying the bill?
SIPE's hunt for school employees defrauding the system is funded by money earmarked for education. The organization has doled out more than $95,000 for investigations into the WCA lawsuit and, in three years' time, paid Esparza just one of many investigators contracted by SIPE approximately $250,000, according to SIPE's records.
"There are millions of dollars at stake here," attorney Messer said. "The money that could be saved in the administration of the SIPE comes out of money for the school district. This is a system that can bleed because of the large numbers."
Prior to Bond's refusal to testify as allegedly requested, he worked hand-in-hand with Messer to turn around the mismanaged system and establish a protocol for determining whom to investigate and a template for implementing appropriate investigations, Messer said.
Bond and White no longer hold their contractor positions with SIPE.
"There's an old saying: 'The truth will set you free,'" Bond said. "But it can be costly to tell the truth."
In June, the San Luis Obispo County District Attorney's Office was provided a copy of Bond and White's allegations. The office, however, isn't investigating.
"We can't do anything unless someone tells the police and they ask us to look into it," said Chief Deputy District Attorney Stephen Brown. "We can route complaints to the proper agency."
Staff Writer Karen Velie can be contacted at firstname.lastname@example.org.