News Column

Complaints of Nepotism Dog California Senate

June 29, 2014

By Laurel Rosenhall, The Sacramento Bee

California Senate, Nepotism

June 29--The anonymous letter sent to multiple California state senators last month ended with a sharp question: "Why is it that the Senate is not listing open positions, for other staff to apply for?"

Concerns about personnel practices and allegations of nepotism are swirling in the Capitol as an investigation proceeds into claims that friends and family of key administrators get special access to taxpayer-funded jobs.

The issue surfaced publicly last month when The Sacramento Bee reported that court records showed one of the Senate's in-house law-enforcement officers had cocaine and marijuana in his system the night he was involved in a fatal off-duty shooting outside his Greenhaven-area home.

The officer is the son of the Senate's longtime head of human resources. Gerardo Lopez worked for the Senate for 15 years despite brushes with the law that include a citation for petty theft and charges of drunken driving.

Lopez was fired over the drug-use revelations, but he is not the only one with family ties to key Senate administrators.

The two people with the most power to address personnel matters have long had friends and family on the payroll: Dina Hidalgo, who as head of human resources for the Senate plays a major role in hiring; and her supervisor, Greg Schmidt, who as the Senate's top administrator oversees a staff of roughly 150 people who handle personnel, accounting and other duties.

Analysis of payroll data and other documents obtained through public records requests, as well as interviews with current and former legislative staff, found multiple Senate staff members with personal ties to Hidalgo and Schmidt:

--Schmidt's son Jeffrey has worked for the Senate since February 2010, during which time his salary increased nearly 63 percent as he changed jobs.

--Schmidt's daughter-in-law Beth Schmidt worked part time for the Assembly for nine years until last year. During most of her employment in the California Capitol, Beth Schmidt was allowed to work remotely from her home near Salem, Ore.

--Schmidt's nephew Kevin worked for the Senate for three years and now works for Lt. Gov. Gavin Newsom.

--At least five of Hidalgo's family members work in the Capitol. And at least three of her softball teammates got Senate jobs after playing on her team. Most of those with connections to her have jobs in security, facilities or other duties removed from the direct supervision of politicians.

Hidalgo is on medical leave from the Senate and did not respond to emails or phone calls from The Bee. Schmidt provided information only by email. Both have worked for the Senate since the 1980s.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he did not want to comment until he sees the results of the independent investigation he has commissioned to review nepotism allegations. That action came after The Bee report and in the wake of an anonymous letter to a senator last fall that was critical of Senate hiring practices. A second anonymous letter sent to senators last month contained similar allegations.

Patronage long has been an accepted part of the culture at the Capitol, and family members and friends who are hired may be well qualified for their jobs. But anger over the practice has come to a boil now, in large part because some employees say they have nowhere to turn with their concerns, given the power held by Hidalgo and Schmidt.

Allegations that top administrators are using their positions inappropriately are troubling, said Sen. Mark DeSaulnier, D-Concord, who found an anonymous letter on the subject on the seat of his car last fall.

"Is this the proper management for a public institution? ... Is this the right way to hire people? I would say no. There is clearly a management problem," he said.

"I think most people think you apply for a job in the Senate as a staff person and you get hired based on your qualifications and your talent, not on who you're related to or who you're friends with."

'An infiltration of family'

Hiring family members is not forbidden in the Legislature. The practice is addressed in the first chapter of the Senate's employee handbook: "There is no bar to employment of relatives in Senate positions," it says, except in cases where one family member is supervising another or where conflicts of interest could arise.

Hiring in the Legislature also isn't subject to the same rules that govern hiring in other parts of state government. Under the Capitol dome, there is no requirement to advertise open positions, interview a minimum number of people or demonstrate that new hires have relevant work experience. The Legislature can pick and choose which positions it advertises, and where it does its recruiting. The Assembly, for example, posts some open positions on its website. The Senate website doesn't include a jobs page.

"It certainly does have the potential to allow favoritism and nepotism to creep into the process," said Timothy Yeung, a Sacramento attorney with expertise in public-sector labor law.

Other branches of state government are subject to the civil service system, operating from the standpoint that everyone should have equal access to taxpayer-funded jobs. The state maintains a website that lists hundreds of open positions and procedures for applying. These jobs generally require applicants to take a test, get on a ranked list, wait for openings to be announced and interview with panels of bureaucrats.

The system dates to 1934, when Californians grew so tired of political patronage in state hiring that voters passed a ballot measure to eliminate the "spoils system," Yeung said. The measure enshrined the civil service system in the California Constitution and created a personnel board to enforce it.

Yet from the beginning, the Legislature was not included in the civil service system. Politicians, who often take staff members with them as they move from office to office, like the flexibility. Multiple generations of some families hold Capitol positions.

Jon Waldie, who until recently was the Assembly's longtime chief administrator, is the son of a former legislator. Tony Beard, who was the chief sergeant-at-arms for the Senate until last month, was the third generation of his family with a prominent post in Capitol law enforcement.

The vagaries of legislative hiring played a part in a corruption scandal that has engulfed the Capitol over the past year. As part of the FBI's sting of Democratic Sen. Ron Calderon of Montebello, an affidavit says an undercover agent offered him a bribe if he would get the agent's supposed girlfriend a job in the Senate. She, too, was an undercover FBI agent, who posed as someone whose last three jobs were in modeling, film and fashion.

She got the job anyway, a low-level position in Calderon's district office. She failed to show up for work, and the Senate later sought reimbursement of the $684.77 she had been paid.

The roughly 2,100 people who work for the Legislature can land their jobs through word of mouth, and lose them just as easily. Unlike state workers, legislative staff do not have the protections of civil service regulations or labor unions.

The Bee spoke with or received letters from more than a dozen Senate employees who contend nepotism is hurting the institution but said they were too afraid to speak openly. Those who still have their jobs say they fear losing them. Some who have retired fear retribution against their friends. These allegations mirror assertions in the anonymous letters to senators.

One willing to speak is Lynn Rasberry, who retired in 2010 after 28 years working for the Senate. Rasberry was a supervisor in the special services division, overseeing the staff who move offices and drive lawmakers to appointments. He said he felt he could not approach Hidalgo with workplace concerns because so many of his colleagues had personal relationships with her.

"(We were) getting a nephew being hired. Friends. Softball acquaintances of hers. Husbands and wives of softball acquaintances of hers. Cousins. It just mushroomed," Rasberry said.

"We were wondering, 'What's going on here?' But we had to deal with it. It was an infiltration of family members and friends."

Other employees complimented Hidalgo's work. Kirk Hutson, a Republican Senate staff member, defended Hidalgo and Schmidt in a letter to Steinberg in response to last month's anonymous letter, which specifically criticized her hiring practices.

"I consider Dina one of the most compassionate staff members in this building and I am deeply upset that anyone would claim that she is unapproachable," he wrote. "She always took my calls, day or night."

The anonymous letter left in DeSaulnier's car last fall said "the majority of Dina's hires are good people." But it said staff members have nowhere to turn when problems arise with workers she knows personally.

"...What are Senate employees to do if we have an HR issue involving any of these employees?" it asked.

An unusual perk

A human resources expert contacted by The Bee said that while hiring friends and family may not violate an organization's nepotism policy, the practice can create workplace conflicts and a potentially distrusting environment for other workers.

Personnel managers, in particular, should avoid hiring people they have personal connections to, given their role in responding to employee concerns in the workplace, said Jon Decoteau, West Coast divisional director for the Society of Human Resource Management.

"Although it is not illegal, it is not something I would encourage and is something I would actually frown upon," Decoteau said. "Especially in human resources -- you have the responsibility not only to represent the best interest of the organization, but you also have a responsibility to assist the employees."

Both the anonymous letters to senators and several current and former legislative employees complained that Hidalgo favors friends from her softball team in filling Senate positions.

The Bee reviewed a decade of rosters from Hidalgo's "Lady Legendz" softball team posted on the United States Specialty Sports Association website and found that at least three people hired into the Senate's administrative wing in recent years had played with Hidalgo before getting their jobs. The husbands of at least two other teammates got Senate jobs after their wives had played on Hidalgo's team.

Schmidt said he knows of five Hidalgo relatives who work in the Capitol.

Hidalgo's daughter-in-law Jennifer Delao is a secretary in Steinberg's policy unit; her nephews Ronaldo Gayton and Brandon Jimenez, and another relative, Joaquin Velarde, are Capitol security guards; her nephew Carlos Jimenez is a sergeant-at-arms. Security guards, Schmidt said, are employed by the state Department of General Services -- so are not Senate staff -- and are hired by a panel that includes representatives from the CHP.

"That's out of a total of some 950 Senate employees. None of these is under the supervision of Dina Hidalgo, and all were hired 10 to 16 years ago," Schmidt wrote in an email.

Schmidt said his son's job as a principal consultant in the facilities department does not violate the Senate's nepotism rule, because he doesn't directly supervise him.

Jeffrey Schmidt did not respond to an interview request. His father said he was shifted into his current position.

"There was not an open job," Greg Schmidt wrote in an email. "He and his position were taken out of another office and transferred for purposes of supplementing the Facilities operation as we face an intensive amount of (reconstruction and grounds) work."

Jeffrey Schmidt earns $108,792, in the top third of Senate employees holding the same job title of principal consultant. That's up from the $66,768 he earned when he was hired in 2010.

His salary increases over the last four years are the result of being promoted to different positions within the Senate, his father said. Jeffrey Schmidt started out in an entry-level position on the staff of then-Sen. Denise Ducheny and worked on redistricting for the Democratic Caucus before being assigned to the staff of Sen. Richard Roth, D-Riverside.

"He had six years' experience as a lobbyist before entering state service, and was thoroughly knowledgeable (regarding) the legislative process," Schmidt wrote of his son.

Roth, who chairs the Senate's ethics committee and has a background in employment law, said he doesn't know much about the process that Senate administrators use for hiring staff. When Roth arrived in the Capitol in 2012, Jeffrey Schmidt had been assigned to work in his office, and Roth said he did a good job helping open a new district office and managing other office operations.

Schmidt's daughter-in-law Beth Schmidt, who is married to another of his sons, worked for the Senate for nearly three years before moving to a job in the Assembly in 2004. She enjoyed an unusual perk during most of her time on the Assembly payroll. For about seven years, Beth Schmidt worked remotely from her home in Oregon, coming to Sacramento for meetings just four times a year.

Jon Waldie, the Assembly's top administrator during Beth Schmidt's tenure there, said she had proved herself while working in the Senate, where she made lawmakers' travel arrangements and worked as a legislative aide. When she announced she'd be moving to Oregon in 2004, Waldie said, the Assembly offered her a part-time position she could do from there: writing reports about West Coast fisheries.

"She was a good employee when she was here. We wanted to see if we could assist her in some way," he said.

Waldie acknowledged that legislative employees rarely telecommute from out of state, but said Beth Schmidt earned the privilege because she was a good worker. She returned to Sacramento in 2011 and a job in Waldie's office, he said. She left the Capitol in 2013. Her ending salary was $35,064 a year for a 60 percent-time position, according to information the Assembly provided.

"Who you know can help you get in the door in the Legislature, but it's your work product that keeps you around," Waldie said.

'A day of reckoning'

Hidalgo's son, Lopez, was first hired by the Assembly in 1998 to work in an office responsible for driving lawmakers to engagements. Shortly after he began the job, Sacramento police cited him for petty theft of an item worth less than $20, according to information from the police and District Attorney's Office. His employment with the Assembly ended two days later. He had the job just two weeks.

In 1999, shortly before his 20th birthday, Lopez went to work for the Senate. Schmidt said he was hired based on his information-technology experience and worked for about five years in that capacity before moving to the Senate sergeant-at-arms office.

In 2008, Lopez pleaded no-contest to misdemeanor charges of drunken driving, court filings show.

In the 2012 case that led to his firing, prosecutors consider Lopez the victim of a home invasion that occurred after an acquaintance who had been at his home earlier that evening discovered he was missing a $100 bill. They have charged three people with robbing Lopez's house before a gunfight broke out in the early morning hours on the street outside.

Lopez was among four people exchanging fire in the gunbattle that left three people injured and one man dead, according to prosecutors. A subsequent toxicology report referenced in the court file showed Lopez had ingested both marijuana and cocaine the night of the shooting. Beard, his supervisor, resigned from his position as chief sergeant after acknowledging he failed to tell Steinberg about the report. The case is scheduled for trial next month in Sacramento Superior Court.

Steinberg has commissioned two separate investigations by outside lawyers as a result of the case: one to look at whether Lopez posed a safety threat to Capitol employees; the other to examine whether Senate administrators are violating the nepotism policy.

The first report was completed in March and determined that Lopez was not a workplace threat, said Steinberg's spokesman Mark Hedlund. But Senate administrators did not read the full report upon receiving it, Hedlund said, so Steinberg didn't know Lopez had used drugs the night of the shooting until The Bee asked about it in late April. Hours after The Bee's inquiry, he fired Lopez, saying the drug use falls "well below the standards expected of a law enforcement officer in the Senate."

The Senate denied The Bee's request to review the threat-assessment report by attorney Sue Ann Van Dermyden and expert James Cawood, saying it is a confidential personnel matter. The investigators have billed the Senate more than $41,000 for their work.

The Legislature also denied The Bee's request to review the contracts commissioning both investigations. The nepotism investigation is being conducted by Heather Irwin of the Gordon & Rees law firm, Hedlund said, at an hourly rate of $325.

Earlier this year, the Senate approved new regulations in response to a spate of scandals, including three senators who were suspended while they fight criminal charges in separate cases alleging bribery, perjury and conspiracy to traffic weapons. None of the new rules directly addresses hiring practices, but they will create whistleblower protection for staff who report problems, and establish a telephone hotline and an in-house ombudsman for staff to report ethical concerns.

Roth, the senator who chairs the ethics committee and helped develop the new rules, said he hopes the investigation into the nepotism allegations will focus on whether the positions held by administrators' friends and family members are legitimate and how well the people holding them are doing their jobs.

"The question is, is someone holding you accountable?" Roth said.

"It's our obligation to make sure that people who are employed here in the state Senate are employed to do real jobs, that we know what those jobs are, that there are job descriptions, and that we hold people accountable for doing their jobs. And that for those that don't do their jobs, that there is a day of reckoning."

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Source: Sacramento Bee (CA)


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