Investigators call for contractors board audit

Monday, Oct. 30, 2000 | 11:13 a.m.

One former and one current investigator with the state Contractors Board are charging the board with favoritism in its treatment of construction companies, and asking for an independent program audit of the board.

The investigators also charge that they lack the resources to responsibly check out the thousands of complaints against contractors that the board, the front line against construction-related problems, receives each year.

The board's responsibilities were broadly expanded by the 1999 Legislature in reaction to a wave of complaints of substandard workmanship in residential construction.

Margi Grein, the board's executive director, flatly denies the investigators' charges. She characterized the complaints as coming from disgruntled employees, unhappy with the new role and responsibilities of the board. She noted that the investigators tried and failed to unionize this summer.

Lloyd Mead, a former investigator who was fired in September, and a current investigator who asked that his identity not be revealed, are the source of the complaints.

Both say that the seven-member Contractors Board, which rules on contracting disputes of all sorts, influences the day-to-day administrative actions by staff. That includes investigating reports of substandard workmanship and licensing new contractors.

In the first case, Mead especially said the board is responding to political and media pressure to find workmanship violations in nearly all residential construction. Construction defects have become a flashpoint of controversy between homebuilders, attorneys representing homeowners and politicians.

"You'd better come up with what they want to hear, or they'll make you do it all over again," Mead said. "You better find that the contractor is always wrong."

The investigators said the board administration is trying to score points with the public by targeting new, smaller companies without political ties to board members.

Grein said the increase in the number of violations -- a 500 percent increase for the last six months of 1999, compared to the same period in 1997 -- cited by the agency is due to the enhanced inspection and enforcement statutes passed in 1999.

On the licensing side, Mead and the current investigator say that some companies with ties to board members get new licenses in a period of weeks, rather than the months is usually takes. Employees at the agency tell prospective contractors that it usually takes three to six months to get a license.

As evidence, the investigators point to a "general building" license issued to Jerome Robelen in November 1999, 34 days after the application. Robelen's wife, Roberta Robelen, is the financial officer for Hansen Mechanical Contractors, a company headed by Kim Gregory, the contractors board president.

According to the investigators, Robelen referred to his indirect relationship with Gregory to expedite his application and to waive the examinations usually required for the license.

Grein, however, said Robelen received his license quickly because he had an existing license in California.

Robelen could not be reached for comment, but Gregory said board members do not influence the process for any would-be contractor.

"I've never asked anybody to pull strings," he said.

In another case, Midwest Drywall, a Wichita, Kansas-based company, was issued licenses for carpentry, plastering, steelwork and general engineering in April 2000, one month after it applied. Lawyers for the company work for the same firm that represents the board.

But Grein said the licenses came quickly because the company had other existing licenses in Nevada, so most of the paperwork was already in place.

"Each application is considered on its own merit," said Nancy Mathias, the board's licensing administrator. The time period to get a new license "can vary substantially from applicant to applicant."

While most new licenses will take months to process, contractors with existing licenses in neighboring states or who already had some sort of license in Nevada can be processed more quickly, she said.

And the board has broad authority to waive examination requirements when other licenses are in place, Mathias said.

But the criteria for granting a license is the same for all applicants, she said.

The investigators also complain that they have too many responsibilities. They said that the office has only seven field investigators, and that each investigator carries about 200 open cases.

Grein also disputes that account. She said the office has more than a dozen investigators who work in the field, although some of them also have administrative duties. She said investigators have about 70 open cases.

In response to the investigators' call for a review of the management and activities of the board, Grein said the agency is thoroughly audited by agents for the Legislative Counsel Bureau on an ongoing basis -- and that the problems cited by the investigators aren't backed up by those audits.

She said another audit is welcome, although she is concerned about where the funding would come for the job.

Politicians who worked to revamp the board in 1999 said they hadn't heard the concerns expressed by the investigators.

State Sen. Dina Titus, D-Las Vegas, said she heard allegations of political influence affecting board decisions before the overhaul, but not since then. However, she said she is concerned about the investigator's reports that the agency doesn't have the manpower to do a thorough job.

That job is essential for protecting both homeowners and contractors, she said.

Nancy Quon, a Las Vegas attorney who specializes in home defects cases, said that the issue of resources is a matter of concern. She noted that it can take a year for issues to come before the board members for final resolution.

State Sen. Mike Schneider, D-Las Vegas, said he is concerned about the reports that some contractors might be treated unfairly, but the reports also were new to him.

"I know they've been very aggressive in going after the bad contractors over the last year," Schneider said. "That's what we wanted.

"Are they taking it too far? I hope not," he said.

Three residential contractors told the Sun they agree with the investigators' reports of unfair treatment but were unwilling to go on the record.

But Steve Holloway, executive vice president of Associated General Contractors, a Las Vegas trade group, said he hasn't received similar complaints.

"What I have heard is that it's nice to see some enforcement, and I wish that it will continue," Holloway said. "Of course that is from contractors who haven't had to go before the contractors board."