The administration of Gov. Gavin Newsom has expanded a nepotism probe of the state Department of Industrial Relations after new evidence emerged that half a dozen managers may have helped the director's daughter and another favored job applicant bypass civil service procedures, records show.
The state Labor and Workforce Development Agency, which oversees the industrial relations office, will investigate "any additional unlawful hiring practices by DIR during the last five years," according to a letter by Agency Secretary Julie Su to the State Personnel Board.
Su, who was appointed by Newsom in January, also said in the April 18 letter that she has revoked the industrial relations office's power to hire employees for a year, saying all positions will be filled by the state Department of Human Resources.
Su's actions were in response to a report by State Auditor Elaine Howle in March and a new investigative report sent to her earlier this month by the State Personnel Board.
"I take the findings and conclusions in the [personnel board] special investigation report seriously," Su wrote, adding she "will fully investigate these personnel transactions to determine whether and what disciplinary action against employees identified in the SPB report is warranted."
Howle's report had alleged that an unidentified director had "pre-selected her daughter for a role in her own department, precluding consideration of and competition from other potential applicants," and that the daughter did not have the requisite qualifications for the job and did not follow the application rules that are required of all candidates.
Su’s office later identified the industrial relations director as Christine Baker, who retired in March 2018 and has denied wrongdoing. She was appointed in January by former Gov. Jerry Brown to the state Fraud Assessment Commission.
Baker said Thursday evening that the personnel board report closely followed the findings of the state audit. “I am hopeful that the truth will come out,” Baker said in an email. "There are factual errors" in the new report, she added, maintaining her department’s hiring of her daughter was a “permissive reinstatement” that was allowable because she had worked for the state Employment Development Department.
“This is being put together by a band of folks that wanted to take me down,” Baker added.
The new personnel board report only identifies state officials allegedly involved by their initials, but alleges the director had help from six subordinate managers in getting her daughter, identified as "JB," hired and promoted.
“The director, with assistance of high-level DIR employees, accomplished numerous appointments and transactions of highly questionable legitimacy,” the personnel report said. “Rather than hold an open competition for the position, DIR repeatedly manipulated the system in JB's favor.”
The report called the hiring and promotion of the director's daughter and an associate of the director “illegal.” It directed that a review be made on whether to discipline other managers for dishonesty, "inexcusable neglect of duty" and fraud.
“The actions discredit the state civil service system and breach the trust that the public places in all state employees.” the personnel board report said.
The review said the director emailed a subordinate hiring manager in 2011 that her daughter was seeking a job and said, "You need to be her angel on her shoulder helping her."
The manager, referred to by the initials "JY," wrote an email back to the director saying, “Like old times CB. I will do my VERY best to get her on board," the report said.
The report also said the director notified a labor official with the initials JS that her daughter was applying for a job through a transfer process she said was the "easiest way to move her in."
Baker said in an interview that she had notified Su that her daughter was applying for a job .
When asked Friday if Su is the “JS” referred to in the report and whether she knew about Baker’s efforts, spokesman Garin Casaleggio noted that Su was a labor commissioner at the time. He added “she was not aware that civil service rules were being broken.”
The report does not list "JS" as one of the officials who participated in irregular activities. It says Baker emailed JS a second time in 2011 to outline why she thought her daughter was qualified for the job, saying she “wanted to make sure her work at EDD could count” toward the qualifications.
The daughter was aware of the "extreme lengths the director was taking to effectuate her appointment," the report said.
It cited an email from the daughter to JY: "I know you have really gone out of your way for me. I know it has been a challenge—even (sic) without my mom interfering."
JY responded, "As I said to your mom, I'll take care of you as she did with me over the years,” the report said.
The daughter, who the report alleges misrepresented her qualifications, left state employment in 2014.
Su said in a statement Friday that she has brought in a team of experts to put proper safeguards into the system.
"We are grateful for the expertise provided by the SPB in conducting this review and we accept its recommendations,” Su said. “As I previously stated, the State Auditor's report exposed a systemic breakdown and I am committed to ensuring that appropriate action is taken and the proper infrastructure is in place to prevent any such violations from occurring again.”