More dominoes have fallen in the matter concerning former Department of Industrial Relations director Christine Baker.

Julius Young

The California State Personnel Board has issued a special investigation report involving alleged nepotism by Baker during her tenure at DIR. This report fleshes out additional details regarding many of the matters outlined in the recent report by the California State Auditor.

Several things are striking about the SPB report.

Baker’s brother James Culbeaux and a number of other current and former DIR employees  (identified in the report by their initials) are now ensnared in this matter and may face disciplinary action. The report notes that:

“The director, with the assistance of high-level DIR employees, accomplished numerous appointments and transactions of highly questionable legitimacy. She received material assistance from HH, RA, JY, LC, SC, JC and JC2 in accomplishing these transactions. DIR is directed to review whether their actions warrant discipline under former California Code of Regulations, title 2, sections 8 and 249 , and Government Code sections 19680 and 19682. Additionally, DIR must review whether discipline is appropriate for: (a) fraud in securing appointment; (b) inexcusable neglect of duty; (c) dishonesty; (d) violation of the Government Code or board rule; (e) violation of the prohibitions set forth in accordance with Government Code section 19990; and (f) other failure of good behavior. (Gov. Code, §§ 19572, subds. (a), (d), (f), (q), (r) and (t), 19590.) Their actions were fraudulent and involved falsification of records. The actions discredit the state civil service system and breach the trust that the public places in all state employees.”

Stunningly, the SPB has now revoked the authority of the DIR to hold career executive assignment exams and to process civil service appointments. For at least a year DIR will have to work under the supervision of the California Department of Human Resources in hiring matters.

Moreover, the SPB report seems to acknowledge that there may be other misconduct that needs to be addressed:

“The unlawful and unethical actions addressed in this report, as well as the additional concerns raised in the report by the CSA, are significant. It is not sufficient for DIR to commit to working with CalHR and the SPB to address the issues that have been discovered by external agencies. DIR must fully investigate unlawful hiring practices by DIR during the last five years. It is DIR and its employees that are most knowledgeable regarding the scope of misconduct under the former director. DIR must not wait to be directed to take appropriate corrective action, as there remains a significant risk that other unlawful actions will fail to be remedied.”

This whole affair was not created by the Gov. Gavin Newsom administration, but is essentially a stink bomb that landed on its plate.

According to a Los Angeles Times story, current Newsom Cabinet member Julie Su, secretary of the California Labor and Workforce Development Agency, was said to have been notified by Baker of some of the efforts on behalf of her daughter, though Su was not identified in the SPB report as having done anything wrong while she served as labor commissioner under Gov. Jerry Brown.

In any event, Su issued a nine-page April 18 response to the SPB, vowing to take the findings seriously and take corrective action.

Given that a number of DIR current and former employees are now involved in this, things could get messy. Notably, the position of DIR director is vacant.

As I noted in a recent blog post, it has been reported in some of the workers’ comp press that Baker has remained defiant, claiming that these matters are a hit job on her because of her involvement in workers’ comp reforms. No evidence to support that has been forthcoming.

The level of detail in the SPB report makes any assertion that she was railroaded quite incredible.

It is hard to see how Baker can remain on the Fraud Assessment Commission. That will be an ongoing thorn in the side of the Newsom administration. If she is not willing to fall on her sword and resign from the FAC, it remains for Insurance Commissioner Ricardo Lara and the governor’s office to give her a push.

Julius Young is a claimants' attorney for the Boxer & Gerson law firm in Oakland. This column was reprinted with his permission from his blog, www.workerscompzone.com.