The first draft of the bill, known as Senate Bill 122, prohibited any agency that oversees an offender from having a financial interest in a company that provides treatment to that same offender. But that version came with a hefty cost: $8.6 million a year. As written, the bill would have applied to entities such as community corrections, which includes halfway houses. Offenders living at halfway houses — as Beeck points out — are treated by in-house staff, and legislative number-crunchers figured that contracting those services out to private providers would cost the state millions per year.
Backers of the bill knew it would never pass with such a high price tag. So the group arranged a last-minute stakeholders' meeting and decided to remove community corrections from the bill; Thormodsgaard says his rationale for agreeing was that the state has no financial incentive to make money on offenders in community corrections the way that private probation companies do. Beeck wasn't invited to the meeting but says he should have been: The change reduced the cost to zero and narrowed the focus of the bill to prohibit only private probation companies from having a financial interest in a treatment company. The only such company with such an interest was his, he says.
Anthony Camera
Karen Moreau helped organize fellow treatment providers against RMOMS's plan to offer alcohol counseling.
Senator Suzanne Williams and Representative Brian DelGrosso sponsored a bill to prohibit private probation companies from treating offenders under their supervision.
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The bill sailed through its first committee, but it hit a snag when it reached the Senate floor. All of a sudden, several supportive Republicans, including two who had signed on as co-sponsors, changed their minds. They questioned whether the conflict really existed; if it did, they asked, shouldn't community corrections be included? Some wondered aloud if the real purpose of the bill was to snuff out a low-cost competitor.
"What I understand, really, is that there's a company that has been successful in being more convenient for defendants...and the rest of the monolithic industry doesn't like that competition," Senator Shawn Mitchell, a Broomfield Republican, said during the debate on the Senate floor. "What I thought yesterday was a good-government bill today seems to be a turf-protection bill."
In the end, the bill passed the Senate with 22 votes in favor and 13 opposed. Williams credits at least some of those no votes to Beeck's hiring his own lobbyist, which he did after that first hearing. The reason he waited so long, Beeck says, is because he didn't even know about the bill until the night before. He says he was tipped off by a lobbyist who offered to represent him. (He would end up hiring someone else.)
"I'm a deer in the headlights," Beeck says, describing his appearance at that first hearing. "I've never testified in front of a committee before, especially with a room full of people telling the committee what an evil person I am for doing bad things in treatment, none of which was true."
But Beeck wasn't the only one caught off guard. Unbeknownst to the treatment providers' group, Beeck had recently returned to the Division of Behavioral Health to ask if it would come up with a guideline for if or when private corrections companies could provide substance-abuse treatment. "It was our way of coming back on the scene and saying, 'It's time we do something here. We've waited; we've been patient,'" Beeck says. RMOMS had data to show that its rate of offenders completing treatment was slightly higher than the overall state rate — 3 percent higher, according to data the company gave to Westword. (The state does not track the completion rates of individual companies.) Given their success, Beeck says he felt it was appropriate to ask the division to lift the restriction on RMOMS's license and allow the company to treat its own clients.
"Their suggestion was to split into a separate company just to make it as clean as possible," says Blumer, director of treatment services.
Condojani denies that the division advised Beeck to do so — "DBH does not provide business advice," he wrote — but he acknowledges that staff met with Beeck about his plans. In February, Beeck applied for an entirely new treatment license under a new company name, 1st Alliance Treatment Services.
"We essentially agreed to not only spend all this money and go through all this internal pain of setting up a separate company," Beeck says, "but we also agreed to take the chance that we wouldn't get re-licensed."
He adds, "We took a hell of a risk at that time. And again, the theme is, we believe in what in the hell we're doing. And we put our money where our mouth is."
The treatment providers' group didn't find out that Beeck had applied for a new license until he said so during testimony.
"Dan Beeck didn't know we were running legislation, and we didn't know he'd applied for a new license," Moreau says. "It was like the perfect storm."
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Even though the bill passed the Senate, lobbyist Thormodsgaard wasn't optimistic about its chances in the House — especially since it was assigned to the Economic and Business Development Committee, a group many figured would be more likely to defend the free market than the special relationship between an addiction counselor and his patient. The hearing, which took place on March 20, was a four-hour inquisition, with many of the most skeptical questions aimed at the nine treatment providers who testified in favor of the bill.
