Personal relationships influenced high-level hiring decisions at the state agency that regulates PG&E and other utilities when its executive director appeared to her favor former colleagues over other qualified candidates, according to a report conducted by the State Personnel Board.

The report found that California Public Utilities Commission Executive Director Alice Stebbins, named in the report by her initials, used her influence to advance past associates from her previous jobs at two California state environmental departments.

Stebbins has been placed on administrative leave while the commission conducts its own review. The personnel board wrote that some of her hiring decisions had “highly questionable legitimacy.”

She’s led the commission since 2018 during a period in which it has faced pressure to toughen its oversight of PG&E after the company’s equipment sparked deadly fires in Northern California in 2017 and 2018. The commission also regulates Southern California Edison and San Diego Gas and Electric.

Stebbins and her attorney, Karl Olson, dispute the report’s findings. She characterized the report as “retaliation” for her efforts to recover $200 million in fees the commission failed to collect over time.

Olson said that Stebbins was responsible for hiring 800 people since she became executive director, and with a career in state service extending more than three decades, it’s unsurprising that she knew some of the employees who were hired.

“There’s absolutely no bad faith, there’s absolutely nothing wrong with hiring people that you worked with before if they’re doing a good job,” Olson said.

The investigation focuses on California’s merit-based civil service hiring rules, which are intended to prevent favoritism and nepotism for influencing hiring decisions.

Overall, the report said Stebbins hired 17 employees with whom she had previously worked.

Two of her six hires for deputy executive director positions worked with her previously, as did seven of the 24 people hired as administrative services division managers.

The investigation called attention to an executive Stebbins hired in March 2019 to lead the commission’s administrative services division. Stebbins had previously worked with the executive at the California Air Resources Board and the State Water Resources Control Board, according to the report.

The job description called for a candidate who would present the commission’s budget requests to the Legislature and exercise some policy-making decisions. The candidate Stebbins chose had a background in accounting, but not budgeting. .

State investigators found that another manager who interviewed the 12 candidates for that job “felt pressured” to rank the executive Stebbins chose above other applicants with more relevant work experience.

Investigators also obtained interviewing scoring sheets that showed some more competitive applicants had their scores “lowered” to “mirror” Stebbins’ rankings.

The report also cited irregularities with the administrative executive’s salary, which when he was hired was set at $10,010 a month. Just four months later, several entities were placed under his authority, resulting in his salary jumping 49% to $14,922 a month. He retained this salary despite losing some of the additional responsibilities two months later.

The report argued that Stebbins and the administrative executive were “misleading and deceptive” in crafting the justification for his higher salary to the California Department of Human Resources.

The report does not call for the termination of any of the employees whose hiring it questioned. Instead, it calls on the commission to review the administrative executive’s appointment “for any and all appropriate corrective action,” including possible termination.

Commission President Marybel Batjer in a response to the investigation said the agency took the findings seriously and notified employees identified in the report that an internal review is underway.

Gov. Gavin Newsom appointed her to lead the commission in July 2019. Prior to that role, Batjer led the California government agency that oversees hiring practices.

One of her highest-profile assignments as government operations secretary under former Gov. Jerry Brown centered on modernizing and standardizing civil service hiring rules.

The “findings and recommendations have raised serious concerns to the commissioners regarding certain hiring practices at the CPUC and which necessitate the consideration of corrective actions which are unfortunate, but appropriate,” Batjer wrote.

The report notes that the California Public Utilities Commission does not have a nepotism policy, nor does it track personal relationships between employees and supervisors.

The State Personnel Board recommended that that the commission conduct a comprehensive review to identify personal relationships among employees and to implement an anti-nepotism policy.

This story was originally published August 11, 2020 at 11:31 AM.