"There has to be a better way" – Q&A with Richard Hoffman

(Excerpts) From Texas Lawyer, March 6, 1995. Used by permission.
Copyright © 1995 Texas Lawyer. All rights reserved.

These are heady times for players in the field of child-support enforcement. From the White House to the Republican controlled Congress to the Texas Legislature, there's a move to step up enforcement on delinquent parents and privatize collection efforts.

The latest step came Feb. 27, when President Bill Clinton signed an executive order intended to strengthen collection efforts against the estimated 105,000 federal workers who are delinquent in child support payments.

Richard G. "Casey" Hoffman has worked in the field one way or another for most of his 26-year legal career. Following a lucrative family law practice in Massachusetts - and a stint as Massachusetts Bar Association president - Hoffman, 50, came to Texas in 1986 to run the state's child support enforcement program for Attorney General Jim Mattox. Under his direction, the program won a number of congressional and advocacy group honors. But Hoffman had seen enough of government at work and left in 1991 to try his hand in the private sector as president of Child Support Enforcement* (CSE), a national child support enforcement firm based in Austin. The 22-employee firm has handled cases from all 50 states, using a network of about 80 lawyers, including 28 in Texas.

Hoffman spoke about current developments in the field with senior reporter Robert Elder Jr. in Austin Feb. 27. The transcript has been edited for length and clarity.

Q: Why does a company like yours exist?

A: It exists for only one reason, and that is the overwhelming problem in the country with collecting child-support. There were two choices that people had before our company came into existence. One, they could go to government agencies, which are called IV-D agencies under title IV-D of the Social Security Act, and those services were provided to anyone whether you were on welfare or not. Those government agencies over the last 20 years have never collected on more than one in five cases.

The other choice was one I knew a lot about, because I was a family law attorney. You went to a private attorney and paid a retainer, and that lawyer promised to be of great help and sometimes was, if A) that person lived in the jurisdiction, and B) the lawyer knew how to find him. So now, women have three choices. They can come to a company like ours and not pay a retainer and not wait in line like they have to for government services.

Q: Why is the percentage of paying caseloads going down - for government agencies that are collecting?
A: The caseload has gotten so overwhelming that it's no longer manageable, so that the government workers are having to answer complaints, run from case to case, never getting to cases. And they're all absolutely dedicated people, but the system has broken down to the extent that they're not able to provide help to all those who apply.

The solution lies in looking to minimize the caseload and reduce it to manageable levels... the average caseload in the country is 1,000 cases per worker. In Texas at one time it was 1,500, and we've had people who work here who had caseloads of 2,000 (at government agencies). So the numbers are huge.

Q: What's your caseload?

A: About 20 percent of what the average is in Texas.

Q: Which is what?

A: Somewhere between 1,500 and 2,000 in the cities.

Q: The state collects on about 13 percent of its cases.
What's your rate?

A: Our rate is about four times that. In fairness to them, they have three types of cases we don't do. They are required to establish paternity, they're required to do modifications, and they're also required to establish court orders in non-paternity situations. We don't do those kind of cases, and that enables us to look much better statistically.

Whether they're collecting 13 or 15 or 20 percent, I don't think the government is satisfied to say, we're collecting on one in five cases so there's no problem. I think everyone in this country readily admits that program is dysfunctional. And that's why I think the private bar has a role to play...if the government is not going to find a way to bring the army of family law attorneys onto the battlefield, they're not going to win this war.

Q: You've testified before Congress several times recently, and the Republican welfare proposals have an emphasis on child support enforcement. What are you advocating? I noticed in testimony you talked about a "Pay Now or Pay More Later" program. What is that?

A: It's designed to have the non-custodial parent pay, let's say, $300 a month for support. And if they don't pay it by the 15th of the month their order is automatically increased to, let's say, $350 a month.

Q: Like a late utility bill?

A: Exactly. It's exactly like a situation we face with mortgage payments, our utility bill, our MasterCard. I think if the non-custodial parent was aware it was going to cost more money, he would make payment on time and in the full amount. The other advantage is that the cost could then be borne by the person responsible for the problem, the non-custodial parent who didn't pay. I would recommend that the money paid as a penalty go to the government or a private attorney for the work they had to do to enforce the case.

Q: If a deadbeat parent is going to scoff at paying 300 bucks a month, why wouldn't they stiff the custodial parent for $350?

A: Well, that's a good question. There are a number of people who choose not to pay child support because there is no penalty imposed when they do get caught. So if you choose to say, I'm going to ignore my $300 a month, the worst thing that happens to you in most jurisdictions is that they catch up with you and say pay up the three hundred. They don't add interest, they don't add penalties. Most businessmen will tell you that that's not a bad way of beating the system.

Q: Invest the three hundred a month?

A: Right. And the poor custodial parent doesn't get the present value of the money. There's really no incentive to pay child support if you're not going to impose strict penalties. And I'm not talking about strictly monetary penalties. I've advocated weekend jail terms. I think that would send a strong message for those who violated a court order on more than one occasion. And I don't think you'd have to worry about filling the jails. I think if they saw there was going to be punishment, you would see a lot of people not want to be embarrassed that way.

And, we need a cultural shift in this country, where we look at people who do not pay child support as economic child abusers. I strongly applaud the programs where they embarrass the non-custodial parents who have the means to pay and don't pay...they're the ones we ought to make examples of.

Q: Are jail and some other options realistic in a place like Texas, where we can't get a pared-down alimony bill passed? Will that kind of attitude shift–is it realistic on a national level and here in Texas?

A: I'd have to say given that I've been advocating it for the past five years and it hasn't taken place, I probably should be thinking twice about it.

Q: Well, here's a Senate Research Center report ("State licenses and unpaid child support," Jan. 26, 1995) that starts with this... "Parents who fail to pay court-ordered child support are fugitives from justice." You don't hear that blunt language very often.

A: Yes. I'm actually more optimistic about the cultural shift in Texas than I have been for some time. In Texas, we see Governor Bush proposing that licenses be suspended. And it appears to me there's a strong feeling for him personally and his administration that child support is one of the cornerstones for welfare reform. I think it's going to take men speaking out against other men for this change to take place. We'll just have to wait to see what the governor can do with this issue.

Q: Are these various legislative proposals, like driver's license and occupational license revocation, are they going to have any real impact or just help in shifting attitudes?

A: It clearly will make a dent in the problem. It will help in the change of attitude. Right now we have a case in California where the lawyer just got his notice from the Attorney General's office there that they were taking his law license, and that he had six months to clear up his problem. Without that license revocation we would never have gotten to the point where this fellow is going to pay.

When it comes to taking away somebody's driver's license, you're going to see them go out and find the money. They're not going to give up their vehicle. The argument that they're going to lose their job just carries no weight. There will be special circumstances. I'm aware of the testimony of a woman before a (Texas) legislative committee that if she lost her right to drive she couldn't take the opportunity to find work, or whatever her rationale was. Well, if somebody's making an effort to pay, there is discretion in the law. You're not going to go out willy-nilly and grab everybody's license.

Q: There's been a men's movement, kind of a fathers' rights movement brewing for a while. Aren't there some corollary issues, like visitation and unfair support orders, that have to fit into the big picture in order to solve this?

A: First off, the position we've always taken as a company and in my legal career is that every order needs to be obeyed, period. When it comes to visitation rights and any other orders, they all should be obeyed. When you talk about men's rights in this issue, we get into the battle of the sexes. This is about children; it's about what roles parents have to play in the lives of their children.

Statistically, I'm satisfied that the nine out of 10 kids on welfare who are owed child support should be the primary focus of our government programs. And since 40 percent of those children are the responsibility of parents who can support them, we ought to focus on parents who can afford the support and not get drawn off into a whole lot of consideration about the poor non-custodial parents who can't afford to pay child support. Those people exist; I don't question it. But what excuse do we have for the 40 percent of kids who are living below the poverty level whose parents can afford to pay? As taxpayers we ought to be outraged we're not enforcing those cases first.

Q: Why has the number of non-welfare cases risen so much in the past 10 years - it's risen 200 percent - while welfare cases rose by about 20 percent?

A: In 1984, there was a (federally mandated) movement to open up this IV-D program to non-welfare clients and give them free services. If you ask for help as a non-welfare client in this country, the state has to give it to you. And in Texas it's free, I don't care if you're Ivana Trump. So the program was originally designed to help children who were on welfare or about to fall onto the welfare rolls, and the federal government, in its non-infinite wisdom, decided to just open the program up. So you saw this huge increase in the caseload... where the state agencies are getting bogged down is with the non-welfare population.

Q: And you advocate government giving priority to welfare cases and private companies taking other cases that already have enforceable court orders?

A: I've recommended a two-tier system. The first priority of government is to take care of children most needy. After they've demonstrated they've taken care of the welfare caseload and the marginally indigent, people living below 175 percent of poverty line, then they can move into taking care of the non-welfare caseload if the state legislature chooses to fund it, and that should be a choice for each state, not mandated by the federal government that they have to work every case.

The federal government says to work every case. But if you're only collecting on one out of five cases, you're not working every case now.

Q: You've also advocated a voucher system to pay private lawyers. How does that work?

A: Let the government determine how much it costs to do an enforcement case. Then say, look, I'm willing to save 25 percent of the cost by providing a voucher to a custodial parent to take to any member of the bar, and that voucher will be worth 75 percent of what it costs me to work the case. The private attorney can apply that voucher to his or her fee and move forward with the case. The other part is that the penalties imposed for non-payment are paid to the government agency or private attorney who brought the person to justice.

Q: Would the attorneys under the voucher system be paid only if they collect something?

A: Absolutely.

Q: You read a lot of federal and state reports that talk about the literally billions of dollars in uncollected support out there. Of course, a lot may be that paternity isn't established or there aren't court orders. But the industry seems to be ripe for operators who think there's a gold mine for the taking. How does the industry shake the image of being sleazy debt collectors?

A: I think two things have to happen. You have to have a registration process.

Q: Which we don't have now?

A: Which we don't have now, but which is in legislation recommended by the interim Joint Committee on the Family Code. I think that's the first step. Clearly there should be a place for a consumer to go.

The other thing that happens and will continue to happen is that whenever a problem arises, the press will expose it. They have exposed abuses in every industry. In Houston, two companies were essentially taken out by the press because of the public exposure (last year).

Q: A lot of firms seem to make their money charging an application fee.

A: We don't charge one. I think the distinction between our company and others is that we're lawyer-led. Others use straight debt-collecting and don't have the legal tools. We don't hesitate to use family lawyers who can be much more effective once a person says, "I'm not paying you no matter how many calls or letters you send."

Q: Is there a minimum amount in arrears before you'll take the case?

A: Right now it's $5,000; we won't take the case unless there's $5,000 owed or in that neighborhood.

Q: You ran Jim Mattox's child support division for five years (1986-90). He's a big-government type, and a progressive, and a Democrat. When I think of these privatizing issues, I think of private prisons, and the public policy considerations when an inmate wakes up and the first thing he sees is a guard in an "Acme Prisons" uniform. This whole privatization is new, and you've made the shift from private family lawyer to public sector, and through the revolving door to the private sector. Do you ever have any qualms about this approach? You headed the state program, which you now malign.

A: First off, what I malign is the federal system that created the mandates that the states have to operate the programs under. I don't think I've ever maligned any state program; they're just not getting the tools to do the job.

Q: You're toeing the Republican line in a lot of this. Privatization, vouchers, criticizing unfunded mandates. You're a Democrat, right?

A: I've been a Democrat from day one. When you read my testimony before Congress, it sounds like I've been a Republican from day one. Reality sets in when you try to manage a (child-support) program that was designed in hell to catch mortals who thought they were good managers. Given that I was on the Governor's Child-Support Commission and the President of the State Bar Association (both in Massachusetts) when I began to work on this issue, I felt that the government program could solve the problem. I honestly believed that. When I was asked to run the state program in Texas, I didn't give a thought to doing anything but succeeding as a government program. I got so frustrated over the five years with the red tape that I became convinced the private sector had to complement the government if we were going to solve the problem.

We were a program that Congress said was the most improved program for the last two years we ran it (1989-90); the National Child Support Enforcement Association gave me an award for being outstanding manager, and you could probably have patted yourself on the back. But the truth was we never collected on more than 15 percent of the cases. So there was no reveling in our accomplishments.

Politics aside, it doesn't matter whether you're a Democrat or Republican, you weren't going to get that program to collect on more than one in five cases. If I hadn't been a practicing lawyer who specialized in family law and been the son of a family law judge, and had the bar association experience and then the government experience, I wouldn't have had a clue as to what changes needed to take place. I'm not saying I know the answers... I just know there has to be a better way when one out of five cases are paying in the country and it's getting less every year. There has to be a better way.

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