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Investigation of Improper Activities by a State Agency and Its Employees
A Director Committed Gross Misconduct When She Repeatedly Violated Merit-Based Employment Principles and Attempted to Retaliate Against Suspected Whistleblowers

Report Number: I2019-1


Results in Brief

A department director consistently engaged in misconduct by using the influence of her position to circumvent California’s long‑held civil service hiring process when she orchestrated personnel decisions that benefited her daughter. The director exhibited this same disregard when she preselected another employee for several positions during the course of only 13 months. The merit‑based employment principles that the director sidestepped time and again exist to promote fair selection practices from among the best qualified job candidates available and are in place specifically to safeguard against such forms of nepotism and favoritism.

The director’s established pattern of repeatedly violating civil service employment rules, in its totality, constitutes gross misconduct. Our investigation revealed numerous circumstances from 2011 through 2018 in which the director deliberately and willfully disregarded the standards of behavior that a department can rightfully expect from its managers and executives. In doing so, she demonstrated gross indifference toward the procedures and protocols that underpin fairness and transparency, and she did not fulfill her obligation to ensure that the most qualified applicants hold the jobs that serve California’s taxpayers.

This report describes multiple specific circumstances in which the director improperly swayed personnel decisions and actions to benefit her daughter’s employment status. While California law does not specifically prohibit nepotism—the act of appointing relatives to positions in one’s organization without regard for potentially better qualified candidates—the California Constitution requires employment practices to be based on the principle of merit, not familial relationships. In this case, the director preselected her daughter for a role in her own department, precluding consideration of and competition from other potential applicants. The daughter did not have the requisite qualifications for the job, nor did she follow the application rules to which all candidates must be held equally.

The director’s daughter also acted in bad faith during the application process for several positions and in dishonestly reporting her time and duties performed. For example, when the director’s daughter began working from home full time, she falsely claimed to have performed duties that records clearly show she did not do. Similarly, when she submitted her application for a promotion, she falsely claimed to have gained the necessary experience to meet the minimum qualifications.

As further evidence of the director’s pattern of misconduct, this report describes another situation in which her repeated improper actions benefited one particular employee who now holds an executive position in the department. In each of the circumstances, the director involved her subordinates in helping her bypass established rules. Evidence collected in this investigation demonstrates that many staff members in her department expressed concern about the propriety of these personnel actions, but they carried out the director’s wishes to avoid retaliation.

Once our investigation began, the director continued to disregard procedure and law when she divulged confidential information. Specifically, during an interview we conducted of her, 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 (CIO)—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.

Similarly, the director repeatedly speculated during that interview about the identity of the whistleblower. Because the California Whistleblower Protection Act (whistleblower act) specifically prohibits retaliation against those who file complaints, we counseled the director against speculating about the whistleblower’s identity; yet in spite of our warning, she continued to do so. A few weeks after the interview, she instructed a member of her staff to review more than two years of email messages exchanged between the individual she suspected of being the whistleblower and department employees.

Based on the whistleblower’s allegations and the verified evidence we analyzed in the course of this investigation, we conclude that the director clearly and willfully disregarded laws and protocol by misusing the authority of her position to achieve her own interests. Her ongoing practice of influencing personnel actions neglected her duty to the State, and her documented reputation for retaliating against those whose behavior she perceived as disloyal, constitute gross misconduct.

Overview of Relevant Rules and Laws

Until the 20th century, most people who worked in state government secured their jobs as part of the spoils system—a way for those in political power to reward their personal friends and partisan supporters. However, since the Legislature established merit‑based hiring with the passage of the first Civil Service Act in 1913, state law has mandated that appointments to state jobs must consider only candidates’ knowledge, skills, and abilities to effectively complete the duties of the specific positions. State lawmakers cemented this cornerstone of California’s merit‑based employment principles with the passage of the Civil Service Act of 1934, which amended the California State Constitution and requires that state jobs be open to competition among all qualified candidates.

The State entrusts the State Personnel Board (SPB) and the California Department of Human Resources (CalHR) with enforcing civil service employment laws. The SPB ensures that departments comply with the decentralized merit‑based selection system, which authorizes individual state departments and agencies to conduct competitive exams and make good faith hiring decisions—decisions arrived at honestly, without bias, and with diligent effort to abide by all prevailing rules and policies. Figure 1 describes some elements of a good faith appointment.

Figure 1
Both the Employer and Employee Must Act in Good Faith to Achieve a Valid Appointment

Source: California Code of Regulations, title 2, section 249.

Note: In April 2018, the State Personnel Board adopted regulations pertaining to good faith appointments. Nonetheless, the regulations cited in this report were those in effect at the time the events occurred.

By contrast, a bad faith appointment may be one for which the successful candidate is preselected—that is, when the hiring decision makers have chosen the individual they intend to employ before, or in lieu of, conducting a fair and open competitive selection process. Other types of bad faith appointments may include the following:

Under the provisions of the whistleblower act, the California State Auditor’s Office investigates complaints of improper governmental activities (IGAs) by state agencies and employees. IGAs include, but are not limited to, actions by an employee, including an officer, that:

For the purposes of this report, gross misconduct is interpreted to mean glaringly noticeable mismanagement of governmental responsibilities, usually because of inexcusably bad or objectionable behavior.

Other relevant laws, regulations, and policies are identified in each chapter of this report.

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