Alleged hiring favoritism at California agency leads to firing of executive director

The agency that regulates California’s privately owned utilities fired its executive director on Monday, finding that she inappropriately used her influence to hire or promote under-qualified job candidates and then showed insubordination when the state investigated her decisions.

The removal of Alice Stebbins as executive director of the California Public Utilities Commission comes in the midst of the state’s wildfire season and as the agency focuses on challenges that range from monitoring PG&E’s bankruptcy to decommissioning the Diablo Canyon nuclear plant in San Luis Obispo County.

Her removal will be effective Friday, Commission President Marybel Batjer said. Stebbins joined the commission in 2018 after working for decades in California environmental agencies.

In dismissing Stebbins, the board cited both a report from the State Personnel Board that said that she made several “highly questionable” hirings in her capacity as executive director, as well as her conduct after the draft of that report was made available.

The conflict turns on California’s so-called civil service rules, which are intended to prevent nepotism and favoritism from influencing personnel decisions.

“You took a series of actions over the course of several years that calls into question your integrity,” said Batjer, who led a multiyear project revising California state hiring and disciplinary codes when served as government operations secretary in former Gov. Jerry Brown’s administration.

Stebbins is fighting her dismissal. In response to the firing, Stebbins, through her attorney’s office, announced that she is filing a claim of whistleblower retaliation, a precursor a lawsuit. Stebbins seeks lost wages and damages, the recovery of her attorneys’ fees and to be reinstated to her position.

Stebbins at the hearing also alleged the commission held clandestine meetings over text message, in violation of the state’s open meetings law, to discuss removing dismissing her.

“They asked for my resignation, and said that I would be fired if I did not resign,” Stebbins said.

The State Personnel Board report found that Stebbins used her influence to help candidates with whom she had previously worked at other agencies. In total, the commission hired 17 of Stebbins’ former colleagues during her two-year tenure as its director.

In at least one instance, she reportedly pushed for one of her hires to have higher pay, placing several entities under his authority to jump his pay by 49 percent. His rate of pay remained the same even after several of those duties were later removed, according to the report.

In the weeks leading up to the hearing, and then again during Monday’s hearing, Stebbins accused the board of retaliating against her for blowing the whistle on the commission for failing to collect $200 million in accounts receivable.

“The firing of Ms. Stebbins would be a clear case of retaliation against a whistleblower,” said Karl Olson, Stebbins’ attorney, at Monday’s hearing.

He previously said Stebbins acted in good faith on hiring panels, and that the department had hired hundreds of people under her leadership. “There’s absolutely nothing wrong with hiring people that you worked with before if they’re doing a good job,” Olson said,” Olson told The Sacramento Bee last month.

The commission, through the law firm Liebert Cassidy Whitmore, has disputed Stebbins’ claims.

The firm said that rather than working to address the findings of the audit, Stebbins was “defensive, hostile and insubordinate,” and that “she repeatedly asked for the report to be suppressed and failed to take responsibility for her conduct cited in the report.”

“(Stebbins’) intentional actions as revealed in the SPB investigation undermined the integrity of the hiring process, and her conduct in reaction to the findings has undermined confidence in her leadership. Any action the commission decides to take regarding her employment will be based on her conduct and not on any alleged protected activity,” the firm concluded in its letter.

Among the documents provided by Liebert Cassidy Whitmore were letters from two former state workers who previously worked for Stebbins when she was at the California Air Resources Board. The letters alleged that Stebbins engaged in similar activity to that which the State Personnel Board alleged.

The two former employees, Cathy Chapin and Socorro Watkins, spoke during the public comment portion of Monday’s meeting.

Many people also spoke in Stebbins’ favor during the public comment portion of the meeting. Disability advocates argued against changing the Public Utilities Commission leadership in a time of crisis.

This story was originally published September 1, 2020 at 5:00 AM.