State of Cali seizing citizens bank accounts to pay bills
http://cbs13.com/consumer/Call.Kurtis.I ... 51854.html
Call Kurtis Investigates: Keeping Your CashWhy Is The State Using Your Money To Pay The State's Bills?
Reporting
Kurtis Ming SACRAMENTO (CBS13) ―
Some call it theft. California is using your unclaimed property to keep the state running during the budget battle. A Call Kurtis Investigation reveals how the state refused to return $13 million dollars.
If you don't touch money in your bank account for several years the state takes it and holds it for you. They call it unclaimed property. You'd think it was like a giant lost and found box. A Call Kurtis Investigation learned during the budget battle the state refused to return what belongs to as many as 14,000 people.
Teaching people how to ride horses is how 17 year-old Bridgette Trahan of Acampo earned $366 several summers back. The award winning rider opened a Bank of America savings account and saved all of it.
"How many years did you save this money," Kurtis asked Bridgette. "I would say 5 or six years."
Now she wants to use her savings to buy a dress for the upcoming rodeo queen competition. But, it's gone.
"Where's all my money," Bridgette asked.
Bank of America says because she didn't touch the account for so long, they considered it inactive and sent the money to California's Unclaimed Property Division. State Controller John Chiang oversees that cash. Bridgette was told the state wouldn't cut her a check to return her money, because the state didn't have a budget.
Unclaimed money and property go into the state's general fund. The Call Kurtis Investigation reveals Chiang didn't return $13.5 million dollars in unclaimed property to as many as 14,000 people in February because of the state's budget battle. Chiang says he needed that money to keep the state afloat.
It's money that belongs to people like Bridgette Trahan.
"It's really important to me," Bridgette told Kurtis. "This money means a lot to me. Even though it's only a couple hundred dollars it goes a long way for a 17 year-old".
Attorney Bill Palmer calls it criminal. The outspoken critic of Controller Chiang accuses him of illegally using these funds to pay the state's bills.
"He's using that little girl's money as a free loan to the State of California," Palmer told Kurtis.
Palmer says the money was never the state's to use, and once people like Bridgette realize the state is holding it, Chiang should cut them a check right away.
"To turn to people and say, 'I can't return your money to you because we're having a fiscal crisis, yet I'm the trustee of your funds-' that's a fiduciary breach" he told Kurtis.
Kurtis sat down with Controller Chiang and asked, "How do you justify holding on to this money, that doesn't belong to the state?" "My principal responsibility is to make sure everyone gets paid."
Controller Chiang says by law, any money in the general fund including unclaimed property must first go toward education and other bills before it's returned to its rightful owner.
"Some call it theft," Kurtis told Chiang. "It's not theft. I'm paying people back as quickly as we can. I'm paying people as the law says".
So what about Bridgette's story?
"I'm going to do everything I can once I have the cash in the state's bank to pay her immediately," Chiang said.
Chiang points the finger squarely at lawmakers and voters for the way the system is designed, and said Bridgette should talk to her state senator. His critics say it's ultimately his decision who gets paid.
"That's classic passing the buck," said Palmer.
Bridgette wants the bucks- all $366 of them- to buy that dress for her competition this month. Instead she's getting a lesson she never wanted in Sacramento politics.
"I think they need to stop pointing fingers and get to the bottom of it."
A Controller's office spokesperson tells CBS13 Bridgette will be mailed her money on Monday, March 9th. Spokesperson Hallye Jordan also says 3,000 checks totaling $3.4 million were written this week. The Controller will announce when the rest of the money will be released on Friday, March 6th.
Chiang supported a bill last year that would pay interest on unclaimed money being used to balance the state budget. The bill died. He says he's open to changing the Unclaimed Property Program so it operates outside the general fund in a trust. Right now there is no legislation to change the program.
Controller's Statement on Withholding of Payments:
We regret to inform you that beginning February 1, 2009, cash payments for unclaimed property will be delayed for 30 days due to the State's cash shortage crisis. Claims involving securities or safe deposit box contents, which have not yet been sold as required by law, will not be affected by this delay.
The Controller has taken this action with great reluctance, but he has no other option to preserve the state's cash for education, debt service and other payments that are deemed by the State Constitution, federal law or court rulings as having first claim to available state general funds. We will continue to process all claims so that we can resume payments as soon as the Controller determines there is cash available.
To check to see if you have any unclaimed property, go to http://sco.ca.gov/col/ucp/index.shtml
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
