The Public Eye

‘We were forced to hire people.’ Investigation focuses on state tax agency’s hiring.

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The largest budget in California to date covers everything from education to marijuana regulation.
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The largest budget in California to date covers everything from education to marijuana regulation.

John Calzada wishes he’d never taken the job that placed him directly in between a California tax agency and one of the politicians who was elected to lead it.

Calzada left that job last year when a state investigation found that he’d swayed the agency’s hiring process to favor candidates connected to Board of Equalization member George Runner.

The report said Calzada pressured managers to interview the sons of someone who worked for Runner, inappropriately involved Runner’s staff in selecting candidates for entry-level civil service jobs and helped hire one job candidate on a rushed timeline that secured him a better pension than he would have received had he started work a day later.

Calzada resigned before the state completed the investigation. He told investigators he had no real influence over hiring, but they didn’t believe him.

“Your influence over which candidates were selected for interview was not only inappropriate but also provided at least strong influence of suggestion as to who would eventually be selected for the positions,” the report said.

A year later, Calzada insists investigators and his former colleagues misinterpreted his assignment as a liaison between Runner’s staff and the Board of Equalization’s tax collectors and auditors. He said he merely passed along recommendations for the agency to consider and did not direct hires.

“Nobody was under any pressure to hire anyone,” said Calzada, who worked at the Board of Equalization for 27 years. “The reality is the people doing the hiring at those offices were at my level or above me. They didn’t need to listen to me.”

Neither Runner nor members of Runner’s staff were interviewed for the personnel investigation. Runner, too, contends the investigators misinterpreted his role in recommending job candidates.

“I recommended plenty of people for state jobs, for military promotions,” he said, “Anybody should be glad to recommend somebody if he has confidence in terms of someone doing a job. That applies equally to my position at the BOE, where I was elected to be involved and engaged in the effective operation of the organization.”

The largest budget in California to date covers everything from education to marijuana regulation.

On its own, the investigation that ended Calzada’s state career charges that a well-placed manager circumvented hiring rules that aim to prevent favoritism and nepotism from taking root in the state’s workforce.

But the investigation also opens a ground-level window on more damaging trends at the Board of Equalization, the 124-year-old tax agency that lawmakers gutted this summer.

The Board of Equalization was a unique agency that collected $60 billion a year in taxes and fees. It was the only state tax department in the country overseen by elected officials who also served as arbiters of tax disputes.

Two audits since 2015 found that the agency could not properly allocate tax revenue.

One concluded its leaders bent to the whims of elected leaders, allowing elected members to reassign tax collectors for pet projects.

One more soon-to-be-released audit found that 1-in-5 of the agency’s employees worked with a relative, according to sources who received updates on it.

“It’s situation after situation where it was all about hiring your relatives or your political loyalists over someone who wanted to do the job,” said Assemblyman Phil Ting, D-San Francisco, who held hearings on the Board of Equalization last spring and advanced the proposal to break it apart.

State government has general anti-nepotism guidance that it delivers to hiring managers. It allows state departments to reject candidates if hiring relatives of other employees would hurt morale or create a perception of unfairness.

The state also has a merit-based hiring system that is designed to prevent nepotism by rigidly requiring job candidates to take exams, place themselves on lists for open jobs and pursue interviews.

The Board of Equalization last year was developing its own anti-nepotism policy after its elected leaders learned about conflicts of interest in one of its departments.

But before the board could vote on the policy, the Legislature stripped it of its power and staff. Nearly all of its 4,200 employees now work for a new tax-collecting department controlled by Gov. Jerry Brown.

Calzada in his last assignment at the agency held a position as an assistant chief of field operations in between the Board of Equalization’s civil servants and the staff for the elected members who set policy and settled tax disputes. He took the job in 2011, viewing it as a big promotion that would help him and his family.

Assistant chiefs of field operations are required to stay in touch with the offices of elected members to share information about events, staff changes and taxpayer complaints. Calzada’s assignment aligned him with Runner’s district, which includes the Central Valley and some of Southern California.

Calzada in September 2012 wrote to managers in field offices that he wanted a say on hiring decisions. Investigators found several messages in which he recommended candidates for interviews.

“I will review recommendations and provide final approval on hires,” he wrote in an e-mail cited by Board of Equalization investigators.

He said an interview that he was following direction from Runner’s staff in requesting information about job candidates, and he wanted to make sure that job candidates did not have conflicts in which they worked directly with relatives.

“Almost everyone there has someone they’re related to, and that didn’t seem odd,” said Calzada, whose wife also worked there. “That’s just the culture you grew up in.”

He caught the attention of then-Board of Equalization Executive Director Cynthia Bridges in September 2015 when an anonymous state worker wrote to her complaining that Calzada had “pre-selected” job candidates, according to the investigative report.

Bridges opened an internal investigation that focused first on an allegation that Calzada skewed the agency’s hiring process to find jobs for the sons of one of Runner’s staff members, according to the report.

In November 2012, Calzada acknowledges that he passed along an unmarked envelope to a hiring manager. He wrote an email to the manager saying, “I have an envelope for you,” according to the investigative report.

In subsequent messages, Calzada wrote that Runner’s staff member “was very adamant that you get it today,” the report shows. The envelope contained an application from the son of Runner’s staff member.

Calzada said he did not know what was in the envelope when he gave it to the hiring manager, and learned about its contents later that day.

Other emails showed that Calzada kept the father of the job candidate apprised of the application’s progress.

That son did not make the cut when he took a mandatory exam to apply for a state job. He finished a rank below the cutoff. The investigation said someone made phone calls to get a waiver for the son to be considered for the job. Calzada was not involved in the waiver, the investigation said.

The son of Runner’s staff member began a job at the Board of Equalization on Dec. 31, 2012, a day before a law took effect restricting pension benefits for state workers hired after Jan. 1, 2013.

Investigators linked Calzada to the hiring of another son of the same Runner staff member in 2014.

In that case, Calzada removed from interviews a supervisor who was outspoken in his opposition to hiring relatives of people who worked on the political staffs of Board of Equalization members, according to the investigation.

As a result, the supervisor who wanted to avoid conflicts of interest between civil servants and the agency’s political staff did not get to participate in that job candidate’s interview panel, according to the investigation.

Calzada said in an interview that he noticed other leaders at the agency nudged their kids into careers at the Board of Equalization. He did not want the children of the board’s political staff members to be excluded from opportunities that were offered to the children of civil servants.

“Well I’m going to say this, if somebody tells me they have a predisposition to not hiring somebody, I’ve got to alleviate that problem and not create a problem down the road,” he told Board of Equalization investigators.

Board of Equalization investigators turned up two more instances in which Calzada pushed recommendations for job candidates from Runner’s staff.

“We were forced to hire people,” Siobhan Guiney, a Board of Equalization employee who worked for Calzada, told investigators. She lost her job because of her own role in rushing the hiring of a son of Runner’s staff member. She told investigators she was pressured to sign a name on a document to make sure that the son would start work before Jan. 1, 2013.

One was a young woman who was recommended for a position by Runner’s chief of staff in 2012. The report said she did not make the cut when she was given an interview at Calzada’s direction. She got a job with the agency anyway.

“What, we have 3,000 damn positions at the BOE and you can’t get like one person hired to help out?” Calzada reportedly told a manager as he pressed for her hire.

In 2015, Calzada passed along a recommendation from Runner’s staff to hire one of Runner’s temporary employees.

“Get him on as soon as possible. We can loan him back to the member,” Calzada wrote in an email obtained by the investigators.

Looking back, Calzada said the agency in recent years was at war with itself, with some employees favoring civil servants and others siding with elected members. His job as an assistant chief of field operations put him in the middle of it.

“I had no power. I didn’t influence anybody,” he said. “If you believe board members exerted pressure, they wouldn’t need a little guy like me to do it.”

Adam Ashton: 916-321-1063, @Adam_Ashton. Sign up for state worker news alerts at sacbee.com/newsletters.

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