Audit Renews Calls for Shelley to Quit

Pressure mounted for Secretary of State Kevin Shelley to resign as auditors announced Tuesday that they had requested a criminal investigation into his hiring practices and handling of employees’ complaints.

The financing of his 2002 campaign is already being investigated by state authorities and a federal grand jury, and legislators are examining his office’s alleged mismanagement of $46 million in federal voting funds.

So a highly critical, 50-page audit by the state Personnel Board deepened the political and legal problems that have dogged Shelley for six months. The audit accused Shelley, a demanding boss known for outbursts of temper, of maintaining a hostile work environment during the 18 months ending June 30.

The report prompted calls by at least one fellow Democrat for Shelley -- one of the party’s highest-ranking statewide figures who is responsible for ensuring that California elections are fair -- to step aside.

“I think he should resign,” said Sen. Richard Alarcon (D-Sun Valley), who is a candidate for Los Angeles mayor. “It is better for all involved given the level of trust we place in the secretary of state’s office.”

Calling Shelley’s office a throwback to the corrupt political spoils system of last century, Personnel Board Executive Director Floyd Shimomura said he had asked the state attorney general to investigate the handling of two sexual harassment complaints against Shelley that seemed to disappear from office files. Shimomura said he also wants state prosecutors to examine whether Shelley’s office rigged the hiring of the son of a political ally already at the center of a federal grand jury investigation.

“It is a violation of criminal law to tamper with the Civil Service system,” Shimomura said.

The state Personnel Board is responsible for making sure that state departments follow Civil Service rules adopted in the 1930s to stem widespread cronyism in the hiring of government workers.

The agency has conducted six audits of state departments in the last four years -- but officials say none of the others involved departments headed by one of California’s eight officers elected statewide, such as Shelley.

Shelley spokeswoman Caren Daniels-Meade disputed charges that the secretary of state’s work environment was hostile, saying that the personnel board based its conclusions on contact with a relatively small number of present and former employees.

In a statement, a representative described Shelley as “a longtime advocate of safe and respectful workplace environments” who has fought for legislation protecting workers’ rights.

Though the statement defended the legality of the office’s hiring practices, it said the office has put in place new policies and procedures “to eliminate any real or perceived improprieties.”

Auditors found that Shelley hired Andrew Lee -- son of campaign fundraiser and San Francisco activist Julie Lee -- in December 2003, then promoted him to a permanent Civil Service job under questionable circumstances. The job of associate small business officer -- a new position -- was posted for only six hours the day before Thanksgiving, and applicants had to apply in person at Shelley’s San Francisco branch office. Lee was working in that office as a community liaison and became the only candidate.

In addition, auditors found that the scores on Lee’s eligibility examination had been changed -- raising questions about whether he had passed.

Lee’s mother is head of a community center that received $500,000 in state construction-related grants that Shelley had helped arrange as a state assemblyman in 2001. A federal grand jury is investigating circumstances surrounding more than $100,000 in donations to Shelley’s campaign by several companies and individuals paid from the grant funds.

The Lees have denied any wrongdoing. Their attorney, John Burris, said that Andrew Lee was more than qualified as a community organizer when he applied for his job with Shelley and that he followed the procedures for promotion and was selected. “Unfortunately, he has become a collateral victim in the Kevin Shelley investigation,” Burris said.

Shelley spokeswoman Daniels-Meade said it is “disturbing for the state Personnel Board ... to accuse this office of doctoring scores.” She said the board does not understand the scoring process used.

Lee’s salary increased from $4,584 per month to $4,813 when he was promoted. Lee later went out on disability for a back injury from lifting boxes.

California Atty. Gen. Bill Lockyer’s office was already conducting investigations into Shelley’s affairs when the Personnel Board allegations arrived Tuesday.

“We’ve received them and are reviewing them,” said spokesman Nathan Barankin.

Though other Democratic officials stopped short of asking that Shelley quit, several speculated that his resignation could come any day.

Sen. Gloria Romero (D-Los Angeles) said she believes Shelley mismanaged his office but has seen no evidence of criminal wrongdoing. “Yes, I do believe Kevin will resign,” she said. “It is a matter of time.”

Assembly Speaker Fabian Nunez (D-Los Angeles) said: “The personnel report presents some very disturbing questions ... about the leadership of that office.”

Shelley received a vote of confidence from California Democratic Party Chairman Art Torres.

“The bottom line is I don’t think he should resign,” said Torres, a former state senator from Los Angeles. Torres said he believes Shelley should testify next week before the Joint Legislative Audit Committee and “begin the process of clearing his name, which I know is what he wants.”

Republicans, meanwhile, also were mixed in their reactions.

“It is time for Kevin Shelley to make the right decision and resign,” said Assemblyman Keith Richman (R-Northridge). “It is important for the good of the state.”

Sen. Tom McClintock (R-Thousand Oaks) called the personnel allegations disgraceful, but added that any mismanagement probably did not constitute an impeachable act.

Whenever a constitutional officer leaves before completion of his or her elected term, the governor has the right to nominate a successor. Any nominee would need to be confirmed or rejected by the Assembly and Senate within 90 days. If either house declined to act within that period, the nominee would automatically take office.

Gov. Arnold Schwarzenegger is a Republican and the Legislature is controlled by Democrats, suggesting a possible confirmation fight if Schwarzenegger were to appoint anyone other than a caretaker.

Legislators and people close to Shelley say that if he were to resign, it probably would be before his scheduled testimony next week before the legislative committee examining a state auditor’s report on Shelley’s spending under the Help America Vote Act.

That audit said some voter outreach consultants that Shelley hired with federal funds had attended partisan political events. One of the most serious findings in the personnel audit announced Tuesday revolved around Shelley’s handling of employee complaints

In June 2003, a longtime state employee who trained the staff in computer use complained that her health was being harmed by Shelley’s screaming at her over minor matters.

In October 2003, one of Shelley’s press officers alleged in a complaint that Shelley’s questions about his appearance on ABC’s “World News Tonight” lapsed into shouting and profanity that brought her to tears.

Both women were reassigned at their request.

A third employee, former Shelley executive assistant Marisol Garcia, made three complaints in late 2003.

She alleged that Shelley yelled profanely at her and violently slammed the door over a scheduling matter.

Another complaint alleged that Shelley engaged in locker room vulgarity.

She said her boss made obscene hand gestures during a conference call. She alleged that he asked about her sexuality and made jokes about her ex-husband’s sexual organs.

Shelley aides have said they could find no record that the last two complaints were officially filed with the office.

Shimomura said he found it suspicious that Shelley’s office was missing a sexual harassment complaint that could result in legal action.

Garcia’s attorney, Frank Moore, said she is exhausting her administrative remedies before deciding whether to sue.