Yesterday’s Denver Post carried a warning (in the consumer protection model) about Colorado adoption agencies entitled “Adoption agencies under fire.”

Nearly half the international adoption agencies in Colorado are losing money, five are at risk due to debt and one has generated so many complaints that state officials warned potential clients that they might want to look elsewhere for help with a foreign adoption.

Those findings, contained in a state audit of 22 licensed international adoption agencies, have prompted Human Services Department officials to propose new rules and policies they say are designed to protect prospective parents.

The recommendations come as the state attorney general’s office is investigating five unidentified international adoption agencies.

One of the first recommendations being made is that agencies be made to carry proper insurance:

• Requiring licensed agencies to be bonded and carry appropriate liability insurance.

I found this particularly interesting as several years ago I was sitting in the National Council for Adoption (NCFA’s) conference, listening to agencies being advised specifically NOT to carry liability insurance, as to do so might encourage lawsuits against the agency. By purposefully NOT carrying insurance, it was hoped the agencies would look like less of a target as there would be little to get, thus making it not worth the time and effort to sue them.

Not surprising, considering NCFA was created by the industry for the industry. They are no friend to Bastards. Clearly they understood the implications of what the spectrum of adoption related lawsuits could mean to their member agencies- thus the preemptive advising that agencies make themselves ‘not worth the effort’.

The article continues:

In addition, the department wants to expand its oversight so it can monitor the business practices and financial health of adoption agencies operating here.

This in theory at least strikes me a a damn good starting place, considering the (if you’ll pardon the phrase, particularly in relation to CO,) ‘wild wild west atmosphere’ that pervades to much of the adoption industry. Now admittedly, this is being done in the name of consumer protections for Prospective Adoptive Parents (PAPs), but clearly we’ve come to the point where even those with power and money in the adoption structure have been screwed so deeply and so often that states like CO are considering stepping in.

The department initiated the review after it received complaints about agencies that arrange international adoptions and after the arrest of Lisa Novak, director of the Claar Foundation, based in Boulder County.

Since June 2006, four international adoption agencies have closed in the state. In addition, the state temporarily suspended the license of one agency, Charitable St. Philomena, in March because it improperly completed adoptions, didn’t have a qualified director and refused to allow the state to conduct inspections of its business operations. That agency has since corrected the problems and is again licensed, according to the audit.

McDonough said she did not know the exact number of complaints that sparked the investigation.

“It was not massive, but it was large enough to be concerning” and involved multiple agencies, she said.

Complaints against one agency were serious enough that in February, the state sent letters to five families it knew to be working with that agency.

The state wrote, in part: “This letter is to advise you that this department has received several complaints concerning Adopt a Miracle.”

The letter, signed by Beye, included a list of other licensed international adoption agencies.

Adopt A Miracle, based in Lakewood, did not respond to a request for comment Monday.

Several other agencies likewise did not return calls seeking comment.

CO has been unable to even review the salaries at 8 of the 22 agencies:

The state had hoped to include a review of agency salaries in the audit, but eight of the 22 agencies did not disclose salary information.

Clearly more details on the existing situation are yet to come out, as the preliminary hearing for the director of the Claar Foundation, Lisa Novak, is set to begin later on this month.

Of the 14 agencies that did, the Claar Foundation reported paying the highest annual salary: $169,350.

Claar’s director, Novak, has been charged with two counts of theft and one count of fraud, and the agency has closed. She was accused of taking thousands of dollars from prospective parents but never completing adoptions. A preliminary hearing is scheduled May 19 in Boulder.

Bottom line is PAPs, who drive the market need to understand that adoption, and yes even their own adoption processes is not all sweetness and light. There are scoundrels operating in the field, many states do little oversight and regulation, and particularly in international adoptions that ‘orphan’ being marketed to you may be anything but.

More to the point, the adoption industry itself recognizes that it has real problems, after all, why else would agencies go to the NCFA conference to receive advice on the importance of not carrying insurance?