Politician Defends Assisting Dealer with DMV

October 19, 2010 by · 3 Comments 

When a Fresno, Calif., RV dealer wanted a new sales permit recently, the state of California initially said no, citing “past business practices,” the Los Angeles Times reported.

The man’s firm had bounced $15,000 in fee checks to California’s government, failed to follow a host of business regulations and misled consumers in an advertising campaign, officials said. The dealer also had lost a couple of lawsuits accusing his firm of selling defective motorhomes, and he has been convicted of bribing a lender.

Although field staffers at the Department of Motor Vehicles refused to approve a temporary permit, the businessman was allowed by their superiors to resume selling motor homes after Assemblyman Mike Villines (R-Clovis) intervened. The Fresno-area lawmaker, the GOP nominee for state insurance commissioner in the Nov. 2 election, had used his clout to help Dan Gamel keep the doors at his Internet-based dealership open.

A month after DMV Director George Valverde met with Villines and Gamel’s attorney at the assemblyman’s urging, Gamel was notified that he would get a three-year probationary license, DMV records show.

The same day, Valverde replaced the DMV’s chief counsel, who had strenuously objected to a request by Villines’ office to allow Gamel to go over the heads of the enforcement staff.

Gamel subsequently wrote a $6,500 check to Villines’ campaign and agreed to co-sponsor a fundraiser for the candidate with Gov. Arnold Schwarzenegger, according to campaign records and an invitation posted on Villines’ website. Though the fundraiser was later cancelled, activists say they were deeply troubled that Villines helped a potential contributor make an end run around the licensing staff.

“They politicized the process,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a nonprofit based in Davis. “The DMV had really good reasons for denying a license…. You can’t just short-circuit that entire process. It’s a betrayal of the public interest.”

Valverde said that although his staff had “appropriately denied” the initial request for a permit, the probationary license that was given to Gamel was not out of order. The refusal had set the stage for a more detailed examination of the applicant’s background — a routine practice — before a decision was made on a longer-term license, officials said.

“Certainly Mr. Villines’ involvement may have made it more urgent, but I don’t know that it would have changed the outcome,” said Valverde, a Schwarzenegger appointee. “We wanted to make sure we weren’t negatively impacting consumers, but we want to make sure there is a relatively friendly business environment too.”

Craig Stevenson resigned as DMV chief counsel when Valverde decided to replace him. He moved to another job in the DMV. Valverde said Stevenson’s handling of the Gamel case “may have been a factor” in his decision to remove Stevenson, but not an “overbearing” factor.

E-mails obtained by The Times show Villines and his staff appealing to the DMV director to help Gamel. Other e-mails show Stevenson warning against such special treatment.

“Can you communicate with the Fresno staff that we are working on a resolution,” Villines said in an e-mail to Valverde. “We all need to work as a team.”

In a later e-mail, Villines’ legislative director asked some DMV managers “why the Fresno DMV is still giving [Gamel] a hard time” and requested a meeting for Gamel and Valverde. Stevenson objected, telling Villines’ staff in an e-mail that the proper procedure is to appeal to an administrative law judge if an applicant disagrees with a licensing decision.

“Going directly to the director bypasses this entire process,” Stevenson wrote, calling such circumventing “poor public policy” because every applicant does not have the same access.

Gamel’s firm received its probationary dealer’s license April 8, the day after Stevenson sent an e-mail objecting to a second meeting with the director. The meeting did not take place, and the case was not submitted to a judge.

Villines defended his intercession.

He said Gamel was “getting the runaround,” and he offered to set up a meeting. “I would for any of my constituents,” he said.

The assemblyman said he had been unaware of the extent of the previous problems at Gamel’s company. He said the information he received from Gamel about the dispute argued for a probationary license. “The result, I thought, was a fair one,” Villines said. “I didn’t know some of the past issues. But I do know he wants to put jobs on the street and they [DMV officials] want to protect consumers, and I feel like we found that balance.”

Villines said he did not ask for Stevenson’s dismissal or for the department to waive its normal appeals process. “I don’t think anybody was trying to get out of anything,” Villines said.

Gamel’s attorney, Gary Huss, said the DMV was trying to penalize the businessman for problems that occurred at Gamel Inc. while other people were primary owners of the company. Huss said Gamel had turned over management of his firm to two other people, although he would not say whether Gamel kept some ownership interest. Gamel has resumed management of the firm, Huss said.

“The conduct that was being dealt with did not involve him,” Huss said. “It involved the prior owners of that company.”

But Gamel’s license application, signed in January under penalty of perjury, says he has headed Dan Gamel Inc. since 1983. DMV officials said Gamel was the “sole officer of record” on the dealer license issued to Dan Gamel Inc. when it bounced checks and its license was suspended for deceptive advertising.

The ads, which offered free gasoline in 2004, ran afoul of a state prohibition on making free merchandise contingent on the sale of a vehicle, among other violations, the DMV found.

The DMV’s administrative law judge, Leonard L. Scott, said Dan Gamel Inc. had its license suspended in 1994 after Gamel was convicted of bribery of an officer of a financial institution in an effort to procure a loan for a customer.

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