About 17.5 percent of employees at the former Board of Equalization were related to someone else in the organization, according to a State Personnel Board audit. Rich Pedroncelli AP
About 17.5 percent of employees at the former Board of Equalization were related to someone else in the organization, according to a State Personnel Board audit. Rich Pedroncelli AP

The State Worker

Chronicling civil-service life for California state workers

The State Worker

State workers should lose jobs over nepotism findings, board says

By Adam Ashton

aashton@sacbee.com

November 15, 2017 01:41 PM

UPDATED November 17, 2017 11:31 AM

Three state workers, including the daughter of a Sacramento-area assemblyman, could lose their jobs because a personnel audit found that they were hired under questionable circumstances at an agency riddled by nepotism.

The targeted employees include the daughter of Assemblyman Jim Cooper, D-Elk Grove, and the son of a former staff member to Board of Equalization member George Runner.

They were identified by their initials in a new audit that detailed nepotism in the Board of Equalization, the tax agency that lawmakers gutted in June after a series of audits showed that it failed to allocate taxes properly and that its leaders had allowed elected board members to intervene inappropriately in its daily operations.

The audit by the State Personnel Board showed that 17.5 percent of the agency’s employees appeared to have a relative on staff in the organization.

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The audit also found that the agency disregarded its own anti-nepotism policy, which discouraged managers from hiring people who might have close relationships with their colleagues.

It calls for tough sanctions on both the Board of Equalization and its successor department, the California Department of Tax and Fee Administration. Lawmakers created the tax department when they stripped the Board of Equalization of most of its authority. The tax department inherited almost all of the Board of Equalization’s 4,700 employees.

The Personnel Board said the Board of Equalization will not be permitted to make hiring decisions without approval from the state human resources department, Cal HR. The tax department also will need approval from Cal HR for hiring over the next year.

And, the audit asks both departments to create a full roster of employee relationships within 60 days. The audit’s finding that almost a fifth of the organization’s employees had a relative in the Board of Equalization was based on a survey that the State Personnel Board found to be inadequate.

The Board of Equalization was a unique agency governed by an elected board that both collected taxes and settled tax disputes. Two years ago, it collected about $60 billion in taxes and fees.

The State Personnel Board launched its audit last year after Board of Equalization members began receiving anonymous complaints about nepotism in certain offices.

The audit detailed several situations in which job applicants benefited from favoritism. They were:

▪  Cooper’s daughter was allowed to apply for a job as an information officer in 2015 after its application period closed and an executive dismissed the recommendations of managers who preferred other candidates. The audit said Board of Equalization member Jerome Horton lobbied for Cooper’s daughter. Her mother also worked for the Board of Equalization.

Horton’s lobbying reached former Board of Equalization Chief Deputy Director David Gau. Gau now is the Board of Equalization’s chief executive.

“There was influence and involvement by the highest levels of the organization” to hire Cooper’s daughter, the audit said.

The audit recommends dismissing her.

Cooper has not yet responded to a request for comment from The Bee.

Horton in an email denied that he recommended that the agency hire Cooper’s daughter. Rather, he said, he raised concerns about whether Cooper’s daughter was treated fairly.

“We simply notified the agency of our concerns of discrimination and inequity in the process and were not privy to the selection criteria/process or test results and learned of the hire after the fact,” Horton wrote.

▪  A senior tax consultant working for Runner “used his position of influence to encourage the hiring of his son.” His son started work as a tax technician on Dec. 31, 2012, the day before a pension reform law took effect that limited benefits for state employees who began their jobs after Jan. 1, 2013.The tax consultant and his son no longer work for the state. The audit recommends taking action to deny them reinstatement rights to civil service.

▪  A legislative aide to Board of Equalization member Diane Harkey was allowed to work from the agency’s New York office. Harkey’s staff “used their positions of authority to improperly influence, and arguably pressure, BOE executives to ensure placement” of the aide to a permanent civil service position there. The audit recommends dismissing the employee.

▪  The report recommends dismissing a public information officer who took a civil service exam too quickly. Applicants can take the exams every six months. He qualified for a job after taking an exam twice in two months. His spouse also works for the Board of Equalization.

▪  The report calls attention to flurry of hiring that took place just before Gov. Jerry Brown’s pension reform law took hold. It found that the Board of Equalization hired 27 people in the weeks before the pension formula changed for new state workers. In 23 cases, the hiring was “unlawful” because of various application deficiencies.

Ten of them were hired to staff a new call center in Culver City, a facility in Horton’s district that he advanced when he was the chairman of the board. The California Department of Tax and Fee Administration closed the call center last month.

Board members Runner and Fiona Ma released statements that supported the audit’s findings.

“This investigation demonstrates the mismanagement, flagrant nepotism, and abuse of authority I discovered upon my election and have spent my tenure on the board trying to uproot,” Ma said. She was the board’s chairwoman when the elected members began receiving anonymous complaints about nepotism.

“The personnel board’s investigation was thorough and professional,” Runner said. “Its findings will help BOE address inconsistencies and maintain compliance with state law,” Runner said.

Tax board boss says his job was threatened

David Gau, executive director of the California Board of Equalization on April 20, 2017 told a Senate budget subcommittee that his job had been threatened, presumably by an elected official. Video courtesy of the California Senate.

Adam Ashton Courtesy of California Senate

Adam Ashton: 916-321-1063, @Adam_Ashton. Sign up for state worker news alerts at sacbee.com/newsletters.