Opponents of the for-profit adoption industry invariably single out Southwest Adoption Center, Inc., the largest for-profit agency in the state, for criticism. But the less-visible Birth Hope Adoption Agency, Inc., which last year sent 28 babies out of state for adoption, has the worst history of legal and regulatory problems among Arizona agencies, records show.
Birth Hope, based in Phoenix, is part of a network of adoption agencies operating throughout the United States under the ownership of Chicago lawyer Seymour Kurtz. During the 1980s Kurtz's agencies came under attack in several states for alleged tax and licensing violations, excessive fees and coercive adoption practices.
Birth Hope was among those targeted by state regulators for straining the limits of the law. In 1986 the Arizona Department of Economic Security denied Birth Hope an operating license after a lengthy probe of accusations that the agency had committed fraud and placed undue pressure on birth mothers and adoptive families. Robert S. Segelbaum, the assistant attorney general who investigated, called the agency's operations at the time "a grand baby-selling scheme."
However, Birth Hope appealed the denial and was issued a license by DES the following year after signing a settlement agreement. Under its terms, Birth Hope agreed to submit records on fees for audit by a third-party auditor and to reduce the fees if the auditor deemed them excessive; to submit records of any loans by the agency to birth mothers; and to comply with agency guidelines for counseling birth parents.
The settlement also said that if Birth Hope was found to be in violation of adoption laws in any other state stemming from adoptions arranged in Arizona, it would be considered a violation of DES regulations as well.
Officials at Birth Hope did not return repeated phone calls from New Times.
Segelbaum was on vacation and could not be reached for comment, but Paul Matte, an assistant attorney general who also represents DES, says the state agreed to settle the dispute because "in all probability DES would've been in litigation after litigation on this, if only because Birth Hope would've been eligible to apply for a new license by the time the first denial was settled."
"There's no doubt that within the adoption-agency community there were feelings that [the settlement] Birth Hope was able to get was not fair," Matte says.
"The feeling still exists," he acknowledges, "but they are operating within the law now."
For all the furor among adoption agencies over the ethics and practices of for-profit adoption, DES officials say they receive few complaints about the agencies from either birth parents or adoptive families. At least two complaints within the last year have named Birth Hope, however. Both are from birth mothers who accused the agency of providing inadequate grief counseling after they gave up their babies, says DES child-welfare official Belva Stipes.
Birth Hope, which is believed to operate solely as a placement service for out-of-state couples, was blasted by New York courts in three recent decisions stemming from adoptions that took place before the 1987 accord between the agency and DES.
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Judges in New York, Ulster, and Nassau Counties, all in the New York City vicinity, said they would not accept any more adoption petitions from Birth Hope--effectively putting it out of business in those areas--because it had charged excessive fees and failed to meet other requirements of New York state adoption law. Birth Hope was required to return $15,000 fees to several couples because it could not document that the fees reflected actual costs. In one of those cases, the agency stated in an affidavit that it spent $371.38 for the care of a birth mother, while collecting a fee of $15,000.
In another decision published in October 1988, Ulster County Family Court Judge Karen K. Peters said the birth mother's relinquishment did not contain enough documentation to be valid under New York law, and that other necessary documents also were not present. The adoption, which involved Birth Hope and another Kurtz-owned agency called Friends of Children, took place in 1985 but had never been finalized because the adoptive family couldn't meet New York requirements showing the birth mother relinquished her baby voluntarily.
"The court contacted both out-of-state adoption agencies, Friends of Children and Birth Hope, in order to obtain information concerning the circumstances surrounding the signing of the consent and possible authorization of monies paid and collected," Peters wrote. "Those organizations refused to cooperate or appear in this action."
Peters decided to finalize the adoption, despite her concern that it would be vulnerable to a legal challenge by the birth mother in years to come. "Neither the baby nor the [family]," she said, "should be punished for a situation not of their making.