Dan Beeck knows how expensive it is to get a DUI.

As the owner of one of Colorado's biggest private probation companies, Rocky Mountain Offender Management Systems, he contracts with six of the state's 22 judicial districts to monitor mostly first-time DUI offenders. In addition to fines, each one is slapped with a $50 monthly fee to cover the cost of probation and must also spend $100 to $140 per month on mandatory alcohol-education classes and therapy.

Repeat offenders and those who blow more than twice the legal limit can be on the hook for more than a year, spending thousands of dollars in the process.

As a result, some convicted drunk drivers don't complete their court-ordered treatment. Several years ago, as the recession began to gnaw at people's finances, Beeck says, "My staff came to me and said, 'Gosh, if there was a way that treatment was free, people would attend and people would complete successfully, and some of the problems we're having in society around these issues would begin to go away.'

"Well, obviously that can't happen," he continues. "It can't be free. But I did start thinking in the back of my mind, 'I wonder if that's really true?' If it was free for people who couldn't afford it, would they really attend?"

So Beeck, a sturdy man with a deep voice and a no-nonsense attitude, set up an experimental program in Jefferson and Larimer counties in which he paid addiction counselors to provide free alcohol classes to up to sixty indigent offenders at a time. It worked; their completion rates, he says, were higher than those of the general population.

"That was an eye-opener," Beeck says. Armed with that information, he approached some of the private counselors who provide alcohol treatment to drunk drivers and asked if they'd be willing to reduce their fees. "The first few we called, we were told, 'Absolutely not,'" he says. "And that was frustrating."

So in November 2008, he applied for a state license to open his own alcohol-treatment business, setting up shop in three locations where he was already providing private probation. And while he couldn't afford to treat everyone for free, he set cut-rate prices: $50 per month, with no intake fee and no penalty fee for missing a class.

"We've made treatment accessible to everyone," Beeck says.

Not surprisingly, some of the treatment providers who make their livings serving DUI offenders balked at Beeck's low prices and, more important, at what they saw as a serious conflict of interest when someone profits from serving as both the enforcer of the law and as a confidant to whom the offender is expected to divulge his secrets.

"As clinicians, we are trained to avoid conflict of interest or any appearance of it," says Kathleen DeHerrera, the owner of Creative Recovery Counseling in Aurora. "This just seems like such a blatant conflict of interest, or at least setting the stage for that to occur, that we were all taken aback and appalled by it."

At first the state agreed. After a probationary period, the Colorado Division of Behavioral Health, which licenses substance-abuse treatment providers, denied Beeck's treatment license, citing the exact conflict of interest the treatment providers feared.

But as soon as a group of those providers pooled their money, hired a lobbyist and took their fight to the State Capitol to make sure a similar situation could never happen again, the division changed its mind.

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When someone gets his first DUI, he usually ends up pleading guilty in exchange for no jail time and a reduced sentence. However, "reduced" can often mean the suspension of a driver's license as well as mandatory counseling, alcohol classes and urine tests.

All are monitored by probation officers or, more likely, private probation case managers. Private probation companies have existed in Colorado since 1996, when lawmakers decided to remedy the problem of too many cases and not enough probation officers by allowing private companies to handle the overflow.

Now judicial districts can contract with these providers to supervise low-risk offenders while state probation officers take on the middle- and high-risk ones. If you get a DUI in one of the seventeen districts with contracts, chances are good you'll be monitored by a private company like Rocky Mountain Offender Management Systems (RMOMS). And if you fail to complete the requirements of your probation, RMOMS can report you to state probation, which can ask the court to toughen your sentence.

Karen Moreau first heard that RMOMS was looking to provide DUI treatment — and for significantly lower prices — in April 2009. A psychologist who opened her practice, Addiction Treatment Outpatient Services, in 1992, it's her job to keep state probation officers and private case managers updated about whether their clients are attending classes and making progress. The news surprised her: She'd worked with RMOMS for years but had no inkling the company was interested in providing treatment. (Beeck says other treatment providers knew he'd been treating indigent offenders for free.) In fact, RMOMS clients sometimes came to Moreau to complete their court-ordered counseling.

That program usually consists of a twelve-week alcohol-education class plus anywhere from 42 to 86 hours of group therapy. The length and intensity of treatment is determined by a state probation officer who evaluates the offender after sentencing. Protocol dictates that offenders are given a list of treatment providers to choose from.

Moreau began calling other counselors, who eventually decided to meet and talk about the issue. "We said, 'This does not bode well,'" Moreau says. "What we became very keen to — and this is going to sound very crass — we understood very clearly that RMOMS was calling a price war on the provider community."

Less than a week later, 43 Front Range treatment providers met at Moreau's office in Cherry Creek. Competitors under normal circumstances, they realized they'd have to band together.

And their concerns involved more than just pricing. People convicted of DUI often aren't allowed to drive or drink alcohol, and the providers worried that offenders who violated those rules wouldn't feel safe admitting it to RMOMS treatment providers. Maybe they'd gone to a summer barbecue with the intention of staying sober but hadn't been able to resist. Or maybe their ride to work fell through and they'd gotten behind the wheel. These are the types of things therapists need to know so that they can help clients identify triggers and challenges in order to overcome them, the providers say. But they're also the types of things that could get a client in trouble with his case manager.

"Clients say, 'I'm not going to talk about my personal life or open up when I might get put in jail,'" says Tammy Lovejoy-Teixeira, a counselor and owner of Horizon Counseling and Education Center in Lakewood.

The group christened itself the Treatment Providers Alliance of Colorado and made two important decisions: to hire an attorney to assist it in communicating with the Division of Behavioral Health, and to begin collecting what members called "critical incident reports," which they hoped would illustrate the burgeoning conflict of interest.

"We began to hear from our clients coming into our groups saying, 'I had the oddest meeting with my case manager, and I felt really anxious and afraid,'" Moreau says. "They would talk about being there and the case manager telling them what a no-good agency [my agency] was and how they really should come to RMOMS."

Beeck denies that RMOMS case managers ever said such things. In fact, he says, his company's treatment clients sign an agreement acknowledging that they weren't forced or coerced to enroll. "We give them the knowledge they need to have," he says, "which is, you can go anywhere, anytime you want."

But the group's reports, which it sent to the Division of Behavioral Health, say otherwise. One from June 2009 relays a client's experience with an RMOMS case manager after he signed up for counseling at a treatment provider in Aurora. That treatment provider reported that the client said his RMOMS case manager "was very upset that he had enrolled with us and told him that we were not the agency she wanted him to attend. She told him that he needed to transfer. He refused to do so and stated that he had the right to select which agency he would attend. She accused him of being disrespectful to her. She then proceeded, according to client report, to tell him that if he stayed in our agency, he would get nothing out of treatment."

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In June 2009, the Division of Behavioral Health hosted a regional meeting with substance-abuse treatment and probation providers. What was supposed to be a routine gathering turned into a referendum on RMOMS. At that point, the company had had its provisional treatment license for seven months while, in accordance with state rules, the division evaluated whether RMOMS should be granted a full one. Lea Blumer, now the director of treatment services at Beeck's 1st Alliance Treatment Services, says the meeting devolved into a "bashing session," and Beeck says his staff was "verbally abused."

Moreau remembers that most of the pointed questions were directed at the Division of Behavioral Health. How, the providers asked, could you grant RMOMS a treatment license when it presents such a clear conflict?

A Denver Post story about the meeting says that then-DBH director Janet Wood "expressed her own misgivings about the agency's decision, saying the temporary license had been approved by a staff member without enough discussion about its implications." Reporter David Olinger quoted Wood as saying, "I don't want to vilify one of my staff, who is very deeply troubled by putting the agency in this situation. We recognize there's a problem, and we're working on it."

On June 30, 2009, the division denied RMOMS a full license. A letter written by DBH staffer Marc Condojani, who is now director of community treatment and recovery programs, says RMOMS was guilty of several violations. Among them: It did not produce documentation showing that its staff was credentialed or had passed background checks, it did not select an approved curriculum for its treatment program, and it failed to document that it was screening clients for HIV and infectious disease, as required by state rules. Nor, Condojani noted, was RMOMS properly creating individual treatment plans for clients or keeping acceptable treatment notes.

However, the biggest problem, Condojani wrote, was that RMOMS was "exercising undue influence" over clients, which is against Division of Behavioral Health rules. "By obtaining a license to provide treatment services in addition to probation supervision, RMOMS maintains a dual relationship with clients...thus creating an inherent conflict," he wrote. He cited "numerous complaints" to the division "related to recruiting clients for treatment away from other programs, intimidation of clients, delays in clients receiving services, and abuse and mismanagement of clients."

When RMOMS applied for a treatment license, Condojani wrote, the division thought it meant only to provide free services for indigent clients. Charging clients for treatment, he implied in his letter, was a different story. As is required, Condojani invited RMOMS to petition for a hearing "if you feel aggrieved by this decision."

That's exactly how Beeck felt. The Division of Behavioral Health "had been aware of our intention to start charging fees," he says. "So needless to say, it came as a surprise that the license was going to be revoked." Beeck hired a lawyer to fight the decision, a move that cost "six figures, out of my pocket," he says. He blamed the denial on the complaints from treatment providers, which he chalked up to worries about price, not quality of treatment.

Disputes over Division of Behavioral Health licensing decisions are rare — about one every two years. When they do happen, they're argued before an administrative-law judge. In the case of RMOMS, Beeck's lawyer faced off against the Colorado Attorney General's Office, which represented the Division of Behavioral Health. But the judge in the case never got a chance to rule. Instead, the two sides came to a settlement agreement in October 2009 that stipulated that RMOMS could no longer treat clients who were under its probation supervision. The division granted RMOMS a limited treatment license that allowed it to only treat DUI offenders being supervised by other entities. (DBH has since granted three other limited licenses, including two to private probation companies.)

Beeck agreed to the settlement because, he says, "I was spending a lot of money, and essentially, it was a huge distraction." He still wasn't convinced his license should have been denied, however, and he asked the division to come up with a single standard regarding offender supervision and treatment that would apply not only to private probation companies, but to places like halfway houses, which provide both.

"My question," he says, "was, 'If there's a conflict with us doing it, why isn't there a conflict with them doing it?'"

After the settlement agreement, the treatment providers who'd rallied against RMOMS were relieved. But the feeling didn't last long. Beeck soon expanded his treatment business — he now has thirteen locations — and the providers began to accuse him of violating the rule about not treating his own probationers.

According to Moreau, who was by then the president of the Treatment Providers Alliance of Colorado, RMOMS case managers "would call providers and they would say, 'I want you to discharge Mary Brown from your treatment because she's now going to come to RMOMS.' And we would say, 'Well, she can't come to RMOMS. There's a settlement agreement.' And they'd say, 'Well, she's not going to go to RMOMS Castle Rock; she's going to go to RMOMS Littleton.'"

The Division of Behavioral Health refused Westword's multiple requests for an interview, but Condojani agreed to answer written questions.

RMOMS did violate its limited license, he wrote: "Clients receiving treatment were also under RMOMS for probation supervision." The issue was resolved, he wrote, when RMOMS "submitted a plan of correction satisfactorily correcting the violation."

Asked about the violation, Beeck says Moreau's description is wrong. He says the issue involved a single indigent RMOMS client whom the company allowed to enroll in its free treatment program around the time the settlement agreement was reached. "The way we resolved it was to send him out...to an external treatment agency, for which I paid the bill," Beeck says. In fact, Beeck says he did the same for the sixty or seventy other indigent RMOMS offenders in the free program at the time. "These clients were being forced into this situation by the division, and it didn't feel fair to me...to just kick them out the door," Beeck says. "I wanted there to be continuity of care, and it was the right thing to do."

But a copy of the inspection report subsequently provided to Westword by the Colorado Department of Human Services reveals that RMOMS admitted a total of 22 of its indigent clients into free treatment after the settlement agreement went into effect. According to the report, when the state inspector asked RMOMS's clinical supervisor about the violation, she said "she was not aware of the final settlement agreement, and it was never communicated to her that RMOMS treatment programs could not admit RMOMS probation clients into the RMOMS indigent program." The inspection took place three months after the settlement agreement was reached.

Several treatment providers had had enough. "We just said, 'This has to get tidy. We can't keep running around like policemen,'" Moreau says. The providers in the alliance decided to attempt to pass a bill that would codify the settlement agreement. "Rather than regulations or an agreement, it would be law," Moreau explains.

One of their first steps was to hire a lobbyist: Jeff Thormodsgaard of Mendez Consulting, whose firm represents several therapy and counseling associations. Thormodsgaard found two very different lawmakers to sponsor the bill: Senator Suzanne Williams, a longtime politician and Aurora Democrat known for backing bills related to education and Native American issues, and Representative Brian DelGrosso, a relative newcomer and business-minded Loveland Republican who owns several Domino's Pizza franchises. DelGrosso did not return phone calls or e-mails for this story, but Williams says she signed on because she recognized a need to prevent the type of conflict of interest DBH cited.

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.

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.

Republican representative Libby Szabo of Arvada repeatedly asked if 1st Alliance addiction counselors would lose their licenses if they were indeed being unethical.

"Yes, that's true," said Joyce Smith, a counselor who owns a practice called Creative Treatment Options, "but someone would have to file a complaint. These people will not be filing complaints, because they don't know any better. These are first-time offenders who are frightened. They're vulnerable, so they won't complain."

Several lawmakers pointed out that since RMOMS case managers don't determine the length or location of an offender's therapy, there's no way RMOMS could manipulate the system to make more money for 1st Alliance by sentencing drunk drivers to unnecessarily long treatment. Their argument was helped by Eric Philp, the director of the state Division of Probation Services. The probation division itself didn't take a position on the bill; neither did the Division of Behavioral Health. But Philp testified that he saw no conflict of interest in what Beeck was doing. Asked by Representative Spencer Swalm, a Centennial Republican, what problem he thought the bill was trying to address, Philp said, "I'm quite unsure of that."

Speaking with Westword, Philp compared Beeck's model to a big-box store. "People say Walmart shouldn't be able to have a health clinic right next to its pharmacy," he says, "but based on my experience, as long as there's a physical separation, there's no confusion about the role. If it's co-located but separated — this side of the building is treatment and this side is case management — then I think it's okay."

But one offender who testified at the behest of the treatment providers' group said she doesn't feel that way. "I am angry when I go see my probation [case manager] because I have to pay $50 for them to check up on me," said the client, a senior at the University of Colorado who was convicted of a DUI. "My therapy, I like to go to. So to keep them separated, I see, is very important."

She testified that the state probation officer who first evaluated her didn't give her a choice of where to go for treatment. "The state probation officer said, 'I'll have you go to RMOMS. It's the cheapest,'" she said. After attending one class there, she said, she decided to switch to a more expensive agency, which she likes much better. "The cheapest isn't always the best, in my opinion," she said.

The treatment providers were frustrated that the House committee members seemed fixated on the business aspects of the bill, but a handout that the alliance gave to lawmakers didn't help. Representative David Balmer, a Centennial Republican, was so incensed by it that he read part of it aloud at the hearing: "'Don't mistake business people for clinicians,'" he read. "'Businesspeople have long been accused and jailed for unscrupulous behaviors. The unscrupulous ones don't always get jailed or run out of business. Some of them just get richer.'

"I don't know who wrote that, but that is a horrible thing to say about anybody that is in the business of helping people with horrible situations in their lives," Balmer said.

Thormodsgaard tried to explain that though their language was crude, what the treatment providers meant was that substance-abuse therapy is not business as usual. "We are talking about someone's mental health," he testified. "And if we as a state have an interest in state-ordering this sort of treatment, we should make sure it's as efficacious as possible. And if there's any appearance of a conflict, it should be mitigated."

Most committee members were unconvinced. They killed the bill in an eleven-to-one vote. However, several lawmakers said the issue was an important one that hadn't been resolved. "I believe that the bill addresses the issue of the corruption of the therapeutic relationship," said Representative Max Tyler, a Lakewood Democrat. "However, I think the discussion today had almost nothing to do with that...so my 'no' on this bill today will be a way of absolutely encouraging and saying this is an issue we've got to solve. If DBH doesn't solve it, we need to come back at it another year."

Representative Jonathan Singer, a Longmont Democrat who also voted against the bill, made an even bolder statement. "If [the Division of] Behavioral Health is doing an insufficient job," he said, "I will be the first person next year to co-sponsor this bill if it doesn't pass this year. That's a promise."

So what has the Division of Behavioral Health done in the five months since the bill died? For one, it dismissed a grievance filed by the Treatment Providers Alliance of Colorado alleging that in granting Beeck a treatment license, the division "eroded the overall quality of care in DUI treatment." The grievance included a meticulous file of everything that happened since Beeck was granted his first provisional license in 2009, including the division's first denial letter and a copy of the settlement agreement.

"Our grievance, simply put, is that we believe that DBH has failed to address or prevent the ongoing conflict of interest," they wrote. "We have exhausted our remedies to cure this problem. Therefore, we file this formal grievance."

On May 30, the division politely struck them down. In a letter, Lisa Clements, the director of the state Office of Behavioral Health, which includes DBH, wrote that the division "fully supports the separation of offender supervision responsibilities from...substance use disorder treatment," but that 1st Alliance's new provisional license is "clearly separate" from RMOMS. She promised the division would monitor 1st Alliance "to ensure that client safety and relationships are not compromised."

Meanwhile, Beeck is still waiting for the division to grant 1st Alliance a full license. According to Condojani, 1st Alliance is still operating under the provisional license DBH granted it in February. "DBH is still reviewing each site to verify compliance with DBH rules and that there is true separation in location and activities between the two businesses," he wrote. Condojani did not directly answer a question from Westword about how Beeck's creating a new treatment company would eliminate the "inherent conflict of interest" he cited when denying RMOMS a license in 2009.

Beeck doesn't seem worried, though. "We continue to expand," he says about 1st Alliance. "My goal is to get affordable treatment access to any offender who wants it, anywhere in the state." He's currently hunting for buildings in which to open more offices and is looking to further separate the co-located ones. He plans to expand into providing court-ordered domestic-violence counseling and has retained his lobbyist "so we don't get blindsided again."

"The business model for 1st Alliance is profitable, which further, to me, validates that the treatment community is overcharging for this," Beeck says. "The business model will support the fees being a lot lower. That's what [the treatment providers' alliance] is afraid of."