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Nepotism investigation finds state executive got her daughter a job, undermined audit

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A former California state government executive under investigation for alleged nepotism sought to undermine a state audit and helped her daughter win promotions that violated state civil service rules, according to a report released Tuesday.

The report from State Auditor Elaine Howle does not name the department or identify the director who got her daughter a job working for her. Margarita Fernandez, spokeswoman for the auditor’s office, said Howle declined to name the director and the department in the report because doing so could inadvertently disclose the identity of whistleblowers.

The timeline of events described in the audit coincides with publicly available information describing the retirement last year of former Department of Industrial Relations Director Christine Baker.

It also matches information disclosed in a lawsuit challenging the dismissal of a Department of Industrial Relations employee, and a state investigation into that worker’s firing.

“We are grateful that public disclosure of the independent findings of the California State Auditor has confirmed the caustic environment in which my client worked which was fraught with favoritism and retaliation,” said Kasey Clark, chief counsel for the California Statewide Law Enforcement Association, which filed a lawsuit in Alameda County Superior Court contesting the employee’s dismissal.

The Howle audit is broken into four chapters. The first one is titled “Nepotism: The Director Consistently Orchestrated Personnel Decisions That Favored Her Daughter and Violated Civil Service Employment Rules.”

It says the unnamed department director intervened to help her daughter get a job at her department in 2011 even though the daughter did not meet minimum qualifications for the position.

In 2012 the daughter faced potential discipline at work for being late and failing to complete tasks in a timely manner, the audit says. A senior supervisor intervened to protect her, telling the manager who wanted to discipline the daughter, “Are you trying to lose your job?”

In 2014, after three months in another new role, the daughter complained to her mother one weekend about a manager. On Monday, at the mother’s direction, the manager was told to move out of her office as part of a reassignment, according to the audit.

The daughter benefited again from her mother’s involvement in her career in 2015 when the daughter received a transfer to an information technology position, the audit says. That transfer was carried out in part with help from the director’s brother, who was the department’s chief information officer, the audit says.

In nearly two years on the IT job, where she was making a $102,000 salary, the daughter “failed to substantially engage in or complete the duties she agreed to” while submitting fraudulent timesheets, according to the audit.

Howle’s team read more than 1 million emails and interviewed dozens of witnesses, according to her summary. She reported “an alarming” 20 witnesses feared retaliation from the director.

The audit also details several other “bad faith” appointments the director made to help a favored candidate bypass state civil service protections to get hired and then rapidly move up department ranks.

In a meeting with auditors, the director repeatedly speculated about the identity of the whistleblower, which auditors advised her against, according to the audit. Afterward, the director ordered a staff member to review more than two years worth of emails to try to determine who the whistleblower was, according to the audit.

“We informed her several times that state law requires her to keep confidential all information she obtained from us. Nevertheless, when we interviewed other members of her staff, including the department’s chief information officer — who is also the director’s brother — they informed us that the director had warned them that we were conducting interviews and that we would request information from them regarding the whistleblower’s allegations and her daughter’s work in the department,” Howle’s audit says.

As nepotism allegations surfaced beginning in 2015, Howle referred complaints to the state agency that oversees the department. Within weeks, Howle learned that the agency secretary informed the department director about the looming investigation.

Agency secretaries are part of the governor’s cabinet and among the highest-ranking officials in state government. The state labor secretary at the time of the early investigation was David Lanier.

Howle completed the audit in May 2018 but did not release it to the public. She initially handed her findings to the Governor’s Office.

She wrote in a new letter that she chose to release the complete report because she does “not yet see evidence that the agency has acted with appropriate rigor to remediate the effects of the director’s behavior.”

After she published the audit, California Labor Secretary Julie Su released a statement that said Howle’s report “exposed a systemic breakdown.” Su’s agency oversees Baker’s former department.

“This report raised serious concerns. Among the many important roles that the Labor Agency plays in securing just working conditions for Californians, our job is to prevent retaliation against employees who exercise their rights in the workplace, which makes any retaliatory conduct within the agency all the more unacceptable,” Su said in a written statement.

Socorro Tongco, a former Department of Industrial Relations employee, in December sued the state in Alameda County Superior Court alleging she was pushed out of her job because she gave information to Howle’s auditors. The lawsuit says auditors’ questions involved Baker’s family members.

An attorney for the state representing the Department of Industrial Relations, Baker and other executives named in the lawsuit filed an answer to Tongco’s complaint earlier this month denying her lawsuit’s allegations.

Baker was unavailable for comment Tuesday afternoon. Brown in January appointed her to a position on the state’s Fraud Assessment Commission, which meets a few times a year to allocate funding for fraud prosecutions.

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