Bureau works to reunite self with money

0 Comments | Oakland Tribune, May 22, 2007 | by Steve Geissinger

SACRAMENTO -- The state Bureau of Unclaimed Property says vaults are overflowing with $5 billion in lost funds and property it hopes to return to owners, but it couldn't even find itself -- the Bureau of Unclaimed Property -- to reclaim its own money, an audit found.

"I don't know why we wouldn't have notified ourselves," said Hallye Jordan, a spokeswoman for the state Controller's Office, which oversees the bureau.

The California Taxpayers' Association reported Monday that the bureau had listed itself as the owner of $6,703.50 on its unclaimed property rolls on the Internet. The state quickly scratched the entry from the bureau's Web site.

"We helped them find themselves," said David Kline, a spokesman for the taxpayers' group.

The bureau, long a center of controversy, maintains an unclaimed property list that includes items such as savings accounts, stocks, court settlements and safety-deposit box contents. Banks, insurers and other firms are required to turn over unclaimed assets after certain periods of time when the owners can't be located.

Critics, such as the taxpayers' group, insist the unit is inefficient and that even after private individuals file a claim for property, it is a long, difficult process to obtain it.

The Board of Equalization and Franchise Tax Board -- agencies taxpayers know well -- are owed nearly $1 million on the bureau's rolls, Kline said.

Local and state agencies such as the Governor's Office -- along with businesses like Disneyland -- appear on the list, as well. Celebrities, such as former actor Arnold Schwarzenegger, appeared on the rolls before he became governor.

But the bureau is hamstrung by law, Jordan said.

Controller John Chiang, a statewide elected officer whose agency oversees the unit as part of his overall duties, is owed $249 on the list from a business with which he had political dealings, Jordan said.

Outdated, complex legalities prevent the bureau from even notifying Chiang, Jordan said. Instead, businesses that are the original holders of the property are supposed to make good-faith efforts to find the owners before reverting the property to the state.

Courts in recent weeks ordered the bureau to cease disposing of unclaimed property because its insufficient efforts to notify owners before selling off assets violated constitutional rights, the taxpayers' group said.

The state's outreach efforts to make the public aware of unclaimed property in its possession is limited to $50,000 annually in legal ads in mostly small newspapers of limited readership, she said.

Chiang has been unable to find an author to sponsor a legislative overhaul of the system, however. Funds from some of the unclaimed property eventually go to the state general fund in cash-strapped California.

"It's unbelievable that the bureaucracy in charge of finding the owners of unclaimed property can't even manage to find itself," Teresa Casazza, acting president of the California Taxpayers' Association, said in a statement. "It would be hard to find a more obvious sign that serious reforms are needed to improve the notification process."

Contact Steve Geissinger at sgeissinger@angnewspapers.comor (916) 447-9302.