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The Case of the Missing License

Congress is putting on the squeeze, but Colorado's private investigators still can't agree how -- or if -- they should be regulated.

"It hurts us on a national level," says Armistead of the lack of licensing. "Colorado is considered the dumping ground of the industry. There are corporations that will send investigators here from other states because they don't want the liability of working with local, unlicensed people."

It isn't often that members of a close-mouthed profession beg the government for tighter regulation, but the PPIAC has been trying to get a licensing law for the past thirty years -- ever since the old one was thrown out on a technicality. The effort has been stymied by skepticism from lawmakers and opposition from other private eyes, who can tick off a long list of reasons why bureaucratic oversight of their business is a bad idea. But the campaign to regulate the state's P.I.s received a boost in recent months from the uproar over so-called data brokers who use "pretexting" -- impersonating a customer over the phone or online in dealings with banks, utilities and other companies -- in order to obtain cell-phone records and other personal information, which are then sold. Several of the firms under scrutiny are based in Colorado, including one owned by state legislator Jim Welker of Loveland. At congressional hearings on the practice in June, Representative Diana DeGette declared that Colorado "seems to be a hotbed of pretexting" and vowed to urge state lawmakers to license P.I.s.

Yet the situation may be more complicated than DeGette realizes. Although their techniques overlap, P.I.s and data brokers are different animals, and there's little agreement within the trade concerning what kind of training and educational requirements investigators should have. The push for licensing has other dimensions, too, well beyond issues of public safety -- including the P.I.s' worries over losing access to records when more and more information is being restricted to "licensed professionals." In a world of shadowy agendas, private inquiries and sneaky-Pete subterfuge, things aren't always what they seem.

Armistead sees licensing as part of being a responsible P.I. It would, he says, provide a way to protect the most sacred aspect of the business -- the P.I.'s vow not to disclose confidential information -- and to punish those who violate a client's trust.

"Most people never have to contact a private investigator," he says. "When they do, it's usually because they're in trouble. You'd be amazed at the kind of information we come across. We learn the deepest, darkest secrets of their lives."


"In here, mister, a dick license don't mean any more than a calling card. Now let's have your statement, verbal at first. We'll take it down later. Make it complete. Let's have, say, a full account of your movements since ten P.M. last night. I mean full. This office is investigating a murder and the prime suspect is missing.... You think any goddam private eye is going to quote law at me over this, mister, you got a hell of a tough time coming your way."

-- Raymond Chandler, The Long Goodbye

For nearly a century, Colorado licensed "detective businesses" in much the same way it now licenses accountants, kickboxers, cosmetologists and plumbers. In the late 1970s the state had 214 licensed P.I.s. No one knows how many are operating here today because there's no central registry.

One business database lists 241 agencies, but there may be another hundred operating under the radar. Many P.I.s do their snooping part-time while working a day job (tuckpointing, taxidermy -- you name it), and they have no business listing in the phone book or company registered with the secretary of state. Largely because of the struggling fly-by-nights, the average annual income in the profession is reported to be less than $30,000.

Ray Pezolt, now director of operations in six states for Pinkerton Consulting and Investigations, remembers what it was like in the old days. You'd fill out some paperwork, have a quick chat with some desk jockey at the secretary of state's office, then pick up your license. Pezolt's license was #283, making him the 283rd official P.I. in the history of the state. His required bond was $5,000. "They suspended a couple of people, but I don't think they ever pulled a license," he says.

In 1977, a court case out of Colorado Springs brought the whole system down. El Paso County had challenged a local security company's right to conduct investigations without a license. The Colorado Supreme Court declared the licensing law too vague because it didn't adequately define a "detective business." Pezolt and like-minded P.I.s responded by forming the PPIAC, in an effort to introduce a tougher licensing procedure, one that would add some educational requirements.

"We made a mistake," Pezolt says now. "We decided this was our opportunity to correct a lot of things in the law. What we should have done was just fix the language and define an investigator."

A bill supported by the PPIAC made it through the Colorado House before dying on the Senate floor. Subsequent efforts in the 1980s and 1990s didn't get nearly that far. "The legislature always asks, 'Why do you want to be licensed? Show us where the public's been hurt,'" Pezolt says.

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